Are Classic Car Values Keeping Up With Inflation?

If you work in the classic car insurance broker sector, you will understand how hard it can be to accurately price a vintage vehicle. First, the owner wants an agreed value that reflects the cost of restoration, which may not be the true retail or replacement value. Then there’s the variables of model features and specs, period accessories, previous owners service receipts and more. So you need all the info you can get when sorting out a baseline average value for an tatty Triumph 2500 or a mint Maserati Ghibli.

Literature for the office shelf? You could start with the UK Hagerty Price Guide, which has undergone it’s 29th update since being launched ten-years ago. Every quarter, Hagerty analysts monitor insured values, sale prices and auction results to gauge market trends and influences. UK Hagerty Price Guide Editor, John Mayhead, shares the headlines.

Everyman classics have seen a slight increase:

Hagerty’s Classic Index tracks 50 classic cars that are representative of the enthusiast market, cars that are more affordable and numerous than some of the other rarer models tracked. In the past 12 months, the Classic Index has risen by 3% overall, and while some cars have seen values increase sharply, and others similarly down, 30 of the 50 cars tracked moved less than 3% in either direction.

Those moving down include the Jaguar E-Type SIII roadster, which fell by an average of 9% and the Audi Quattro Ur (RR) which fell by 5%. Both of these cars had previously risen steeply in value, and this was likely a market correction. Similarly, Volkswagen Type 2 (Splitscreen) values fell by 18% in the year, having risen post-Covid.

classic E-Type jaguar restoration

Those that increased most include the ever-popular MGB GT (up 16%), the Mazda MX5 (up 11%) and the Rover SD1 3500 Vanden Plas, up a huge 23%.

These are seemingly big rises, but they must be placed in context. According to the Office for National Statistics, inflation rose 8.8% in the year to July 2022 and only eight of the 50 cars in the Classic Index increased more than this, the remainder effectively losing value in real terms.

Top of the market cars continue to sell well:
Hagerty’s list of 30 most exclusive classics is known as the Gold Index. Including such cars as the Ferrari 250 GTO, the BMW 507 and the Ford GT40, the Gold Index has risen by an average of 17% over the year.

1970s cars have also done extremely well: Dino 246 GTS values have risen by an astonishing 89% in the year, Porsche 911 2.7RS up by 37% and Lamborghini Miura P400SV values by 29%.

Modern classic ‘Halo’ cars are outperforming everything:

The most significant group of rising stars are the modern classic supercars. The McLaren F1 is up 20% year-on-year, with an average value now a huge £15,225,000. In percentage terms though, it’s the Ferraris that lead: F40 average values have almost doubled in 12 months (97.6% increase), 288 GTO values are up by 71.4% and F50 up by 46.7%.

Summary:

It is clear that there is a lot of money being put into collectable, younger iconic cars. These are a combination of the traditional big hitters – Gullwing, Miura, 2.7RS – and the new elite – F1 and post-1980 Ferrari ‘halo’ models. Cars of this type are attracting younger buyers, and Hagerty noted the average age of an F40 owner is now younger than a LaFerrari owner.

There may be two key reasons for these market changes. The Pound/Dollar exchange rate has changed significantly in the last 12 months. In September 2021, it was $1.38 to the GBP, today that’s $1.17. With more expensive cars that are traded globally, this can have a major impact.

The other reason is inflation. With most forecasts placing inflation at around 10% in the next 12 months and all predictions pointing towards rising interest rates, there’s a huge incentive for people with money or the ability to borrow at relatively low fixed rates to buy assets.

 

About alastair walker 9633 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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