Everything Must Go
For our third instalment of this series, we take a break from our commissioned research to address some of the comments raised in previous posts – after all, these are the same sort of comments that raised the issues we are discussing in the first place.
From the feedback we’ve had about our blog series, we’ve taken three key areas to tackle and broken them down into three blog posts:
1. Why is no one in the industry talking about a potential cliff edge of future car ownership?
2. Is it detrimental for Classic & Sports Finance to be discussing these issues?
3. Will there be a flash sale as owners rush to dump iconic classics onto the market fearing declining demand from future generations?
The Sub Text – Shall I put my E Type on eBay with a Buy It Now or Best Offer?
Well, no. The changes taking place in the industry are more of a slow burn than an overnight change. What an Escort RS Cosworth has gained in value over the last 10 years hasn’t been taken from the asking price of older classics. Supply and demand will always dictate the price paid, and with so much attention on the classic car world, we don’t anticipate a seismic shift.
The stable of classic cars that we know and love will change and develop as the industry moves through time and space, but some cars will remain iconic regardless. The ‘canon’ of classic cars, the cars that have multi generational appeal, will always be desired, but others will come and go in popularity – that is the natural ebb and flow of classic car supply and demand. Remember when a Jaguar XJ220 was just £120,000, an Escort RS Cosworth was £12,000? These days an XJ220 is closer to half a million and good Ford Escort Cosworths are heading towards three figures… Where exceptional Sierra Cosworths already sit.
This progression through time is fuelling the rise in prices of genuinely usable cars that are stylish, old and iconic whilst being modern and reliable enough to live with. We’re talking about desirable cars with acceptable levels of fuel economy, a few mod cons, working air conditioning and good heaters… Cars that are just as comfortable gleaming in the grounds of your local Rotary Club Classic Car Show or sitting at 80mph on the way down to Le Mans.
The next generation of classic car enthusiasts will think not on what financial gain can be made with a car, but what gain a car can bring to a life and lifestyle.
The next generation of classic car enthusiasts will think not on what financial gain can be made with a car, but what gain a car can bring to a life and lifestyle. The next generation might not fancy a trip to Le Mans in a 1950s car with points, carburettors, no heaters and no roof, when something like a BMW E28, Bentley Continental or Porsche 993 is a much more appealing proposition with most (if not all) of the classic car kudos… However you’d be hard pressed to find any enthusiast of those three cars who didn’t in some way appreciate or lust after a BMW 507, Bentley 3 ½ Litre or Porsche 356.
Heritage has a lot of sway and influence, and therefore appeal, demand and value.
When all is said and done, in the choking smog of gridlocked modern traffic an E Type will always be more laborious and stressful than a Prius, Corsa, Qashqai or an Uber, but before we trigger a flash sale of 1950s and 60s cars, let’s not forget that on a sunny day, on a sunny stretch of open road, the E Type, Healey, Stag and TR6 will always have the final say… and even the Instagram generation know that.
In essence, times are changing.
The future custodians are changing.
The cars we finance are changing.
It’s not as simple as ‘out with the old, in with the new’, it’s just that the stable is getting bigger.
Previous Post:
Is it detrimental for Classic & Sports Finance to be discussing these issues?
Written by Mark Tofts and Joe Briley
