The best word to describe the current state of the UK classic car market is turbulent.
In this article, we’ll explore exactly that; the history of the market, factors that influence classic car values, the state of the current market and how to navigate it.
In addition to knowing the classic car market well, we’re also experts in providing classic car insurance that is tailored to the needs of classic car owners around the UK.
We’ve also just published our very own Classic Car Report which gives exclusive insights into the classic car market, with key statistics on classic car insurance, ownership, values and much more – using our own data and from our survey involving 845 classic car owners. Feel free to have a read if that interests you too.
What is an asset bubble?
An asset bubble refers to a situation in a financial market where the prices of assets become significantly inflated beyond their intrinsic value.
This typically occurs due to a surge in an asset’s price driven by exuberant market behaviour, where investors continuously buy assets in anticipation of further price increases, rather than appreciating an asset’s true economic value.
For collectors, well-chosen classics can offer portfolio diversification and a hedge against inflation making it lucrative for them.
Is the classic car market fine, has the bubble burst, or is it starting to? Let’s take a look.
A brief history of the classic car market in the UK
Classic cars have historically been a popular investment for collectors and motoring enthusiasts for many years, and in some cases, their value has increased significantly in the UK.
The world of classic cars has always been fascinating. Back in the 1970s and 1980s, classic cars became lucrative assets for investors, as the prices of vintage and classic cars were surging thanks to speculative buying.
By the early 1990s, the classic car market reached its peak. Prices were at an all-time high, with some iconic models fetching astronomical sums at auctions and private sales.
Like all good things, this didn’t last forever. The early 1990s saw a global economic recession which impacted various investment markets, including classic cars. The recession led to a decrease in disposable income and a more cautious approach to investments.
This is when the market crashed significantly – it came swiftly and severely catching many investors off guard. The bubble had burst and people were selling their vehicles at levels far below their peak values resulting in substantial losses.
Following the crash, the classic car market stabilised. Prices bottomed out, and the market began to recover slowly. Speculative investors largely exited the market, leaving more genuine enthusiasts.
The 2000s saw technological advancements such as online auctions and forums which made it easier for collectors worldwide to discuss and buy classic cars, helping to grow the market. The market witnessed diversification with a broader range of cars becoming collectible too.
In the 2010s, high-profile and record-breaking auction sales attracted significant media attention, indicating a robust market and drawing new enthusiasts. Modern classics gained, and are continuing to gain, popularity from a younger demographic entering the market too. Will history ever repeat itself?
The varied trends in UK classic vehicle valuations
The classic car market is showing a contrast in supercar values. While some prestige, high-end models are seeing a decline in values and selling below market value, others are achieving record-breaking sales.
One notable trend is the rising value of cars with a strong or unique historical narrative. Vehicles with a rich history or limited production runs are fetching premium prices, as collectors seek to own a piece of automotive history.
For example, multiple record-breaking sales have been made over recent years:
