It’s been an up and down year for classic car owners. The start of 2023 saw values peak as the post-Covid boom in collecting, restoring and investing come to a sudden halt. Why? Well the cost of living rocketed over the winter and all used car values began to fall, modern and classic. Since then, it’s been interesting watching some marques and models stay in favour, whilst others have become a little bit niche. Much of the market is driven by the memories of first cars, or dream cars from owners’ youth, which is partly why 80s classics like the Sierra and Escort Cosworths, Golf GTi or Audi Coupe models are much in demand now.
Whatever era your classic car is from, it needs insuring. Sometimes for summer driving, transport to shows, or just as part of a collection – with an agreed value of course.
IE went along to the Classic Motor Show to meet Richard Morley, (below) Broking Director at Lancaster Insurance. Part of the Markerstudy group, Lancaster are both the headline sponsor of the event and major players in this sector of the insurance world. Not many insurance brands can achieve a score of 4.8 out 5 on Trustpilot, so it’s worth finding out why customers rate this classic specialist so highly, plus get some deeper insights into the classic market in the UK.
IE; It’s been quite a volatile year on classic car values, but this is still a market driven by enthusiasm from collectors isn’t it?
RM; It really is a full time job keeping up with what’s going up, or down, but one of the things that has really helped Lancaster over the last year is the two year Agreed Value feature (at an additional cost – Ed). People really appreciate it and it’s easy to do. All online, you upload photos and video and we use an independent expert – no conflict of interest – and it avoids the possibility of over-insuring something, or under-insuring. Either way, you don’t want to get it wrong with your cherished classic and that’s where the Agreed Value reassures owners.
IE; It’s important to someone who has perhaps spent years restoring a car, or just looking after a classic, that they feel the correct replacement value is there, because it isn’t like a modern vehicle where you can order a new one if it’s wiritten off is it?
RM; Exactly. Plus, if there are say 50 examples of a particular make and model of a car left in the UK, how do you value that car/ You can’t just choose an average price from a few Autotrader ads. That’s why Lancaster uses the independent valaution service, you have to get that right with some expert opinion, you can’t just take a guess on these things.
IE; Claims inflation has really bumped up premiums in the mainstream motor sector this year, how has it affected the classic market?
RM; To be fair, it’s a similar upward trajectory. Whether you are repairing a classic or modern, the cost of labour is much the same. Parts supply challenges are similar too, in that some parts are hard to obtain – classic or modern. Over the last four years we have seen the average claim cost double, but for Lancaster the challenge has been keeping premiums at much the same level. Things like frequency of claims, or liability, are also much the same as they were four years ago.
Interestingly on classic cars about 70% of claims are non-fault, which reflects the slightly older, perhaps more careful drivers – plus less mileage of course. Mostly there are not everyday cars you commute in.
IE; Are you seen more demand this year for flexible cover on say show transport, or any driver features, so that a friend can have a test drive for example?
RM; One of the benefits we offer is Member Cover. So if you’re a member of a classic club then another member can have a drive, if you are on the same scheme with us. We’ve seen some rivals jump on and copy that feature, which is flattering. The reason we pioneered that feature is that classic cars are very social, the owners like to club together, share knowledge, go to events etc.
IE; That social scene is an integral part of this insurance market isn’t it, classic cars or motorcycles? The owners are so enthusiastic.
RM; Yes they are and when you explain that you’re taking that risk, some people see that as a very high risk type of cover. But in reality, it isn’t because owners really take care of their vehicles and likewise club members and friends respect that. They aren’t going to jump in and see how fast a classic car make it from nought to sixty. The perceived risk is much higher than the actual risk.
Classics are great fun and we understand that. For example at the Classic Motor Show this year we have Sporting Bears charity, which is a great way to raise money by offering classic rides. People can make a donation and enjoy being a passenger in a great old car. Again, that’s a risk we are happy to cover because people love it, they want to experience what it’s like to be in a classic Lamborghini, Jabguar etc.
IE; In the modern car market, AI is making an impact in pricing and claims, are you seeing a similar use of tech in classics?
RM; There is a lot of overlap, although the classic sector is slightly behind the mainstream car market for obvious reasons. As AI develops I think we will see more use of it in pricing values, admin and of course claims.
IE; Rich thanks for the insights.
Watch some video highlights from the show on the IE You Tube channel here;