State of The Market – August 2020
Ahead of the Silverstone Auctions sale two weeks ago the media was filled with stories of an impending economic downturn, a possible car scrappage scheme in order to support flagging new car sales, and the death of the High Street. Therefore, we were expecting the sale to be a white wash as buyers panicked, as were some of our clients. We put into place car finance for some customers so that they were able to take advantage of the situation, but the bargains never came and we’ve been left scratching our heads since the sale which delivered Silverstone Auctions their biggest sale to date.
We don’t want to be accused of talking up the classic car markets, and in fact we anticipated that this article was going to be the complete opposite, but at the moment we’re not seeing a downturn in the specialist car market. There have been so many signs to indicate that the market should be on its knees but we could almost be back to the heady days of 2014, such is the demand.
Our classic and specialist car Dealer Partners are busy, we are fielding an increasing amount of new enquiries and both the traditional auction houses and the new online platforms are flying – Collecting Cars has recently announced that it has transacted £20m of sales since launch and The Market has sold £3.5m worth of lots in 2020 at a sale rate of 90%.
There are some industries that have been hugely affected in light of COVID-19 and we’ve been helping those clients as much as we can buy requesting payment holidays and, where possible, seeking preferential terms for existing agreements. However, for the most part the classic car market is buzzing along and we’re not entirely sure why, given the current state of affairs.
We think they could be a few reasons; there is some pent up demand after a few months not being able to fully access the market which is now playing out, buyers acting on that desire to obtain an individual halo car to complete a car collection, or those just buying something to enjoy the rest of summer in now that lockdown has eased. We also know of one classic car buyer who was in the process of moving house only to find out that he is now going to be £15,000 better off in light of the stamp duty holiday which he is using to part finance a classic car, and he can’t be the only one.
In terms of trends we believe that we are continuing to see millennials make their mark as 90s cars command strong prices; at the Silverstone Auction we saw a Subaru Impreza 22B sell for £130,500 and a Mercedes-Benz Evo II DTM homologation achieve £180,000 – over 2.5 times the price that the following lot, a Ferrari 308 GTS QV. The discussion in the office as to whether one would rather own a 90s DTM legend, or two and a half Magnum P.I. Ferraris marked out the difference in buying preferences between Generation X and millennials.
On the most part we think that speculators aren’t being too active in the market, although as we’ve seen both a Jaguar XJ220 change hands at just over £200,000 and a Ferrari 512 BB go for just under we don’t think that we’re far from the stage that people will take a medium-to-long term punt on some items.
As ever, we would welcome any feedback as to your thought on the market and if you are looking for that new addition to your collection we would be delighted to provide classic car finance for you to make it a reality if we can.