Updated 29th May 2024
When is a classic car not a classic? What’s more, who even decides this anyway? Let’s face it you could always ask the experts on this matter, but then of course you would have to decide who they are too! In this blog, we take a closer look into what defines a car as a ‘classic car’.
Defining what a ‘classic’ car is
Classic car enthusiasts and specialists will have different interpretations of what a classic car is, but there are ‘official’ classes for different purposes. The DVLA and HMRC each have their own criteria and guidance around how they would declare a car a collectible. As well as this, insurance providers may have their own take when it comes to covering your car too.
DVLA’s classic car definition
According to the DVLA (for vehicle tax purposes), a car is a classic and hence exempt from tax and MOTs when:
- Built 40 years prior e.g. built before 1 January 1983 (working backwards from 2024).
- First registered for car tax 40 years prior e.g. before 8 January 1983 (to be used if you don’t know when your vehicle was made).
There are limitations though. If you meet the age requirements but use your classic car for trade and/or business purposes (hire and rewards for example), it will not be exempt from tax.
HMRC’s classic car definition
HMRC (when calculating tax if selling) define a car as a classic where it’s:
- Aged over 15 years
- Worth £15,000 or more
Typically, when you come to sell your classic car, it will be exempt from capital gains tax (CGT). As the same with the DVLA, there are limitations. If you’re buying and selling classic cars with the intention of making money (profit), then this would be classed as classic car trading. This means having to pay corporation tax, the amount dependent on the level of profits. This could be 19% or 25%.
When does a car become a classic for insurance?
Heritage Insurance’s definition and thoughts
Many of us recognise a classic car as being a vehicle of a certain age with perhaps a degree of reputable history or indeed provenance which to all intents and purposes is true. However, even this definition is clearly open to interpretation from the individual. And then of course there is the insurance underwriters who supply criteria from a risk perspective, they will have their own views of what is considered a classic. You could even get into the debate of vintage, classic and modern classic – but then we’ll be going down a rabbit hole!
A good example of this would be the Morgan Motor Company who have been hand crafting their cars since 1909. We believe every car that comes out of the workshop is indeed a classic even though they may have just been built.
The word “classic” can have many meanings depending on its context, for example a good definition that portrays the classic car is “a very good example of its kind” as per the Oxford Dictionary no less. At Heritage Classic Car Insurance we feel some of the factors considered are not only about the car but also about the owner and their lifestyle. A classic car club member using his pride and joy on weekends only, with a main car being used to go to work in the week is an ideal example of a classic car owner.
Classic car insurance vs ‘typical’ car insurance
Classic car insurance can widely differentiate from ‘typical’ car insurance. There are various reasons to explore, but in a nutshell – a specialist provider (like Heritage) will be able to tailor the options to your specific vehicle and can take vehicle condition into account.
For instance, there could be special cover that suits your frequency of driving (typically lower mileage for classics). Furthermore, if your classic car is damaged on the road, parts could be harder to find than more modern parts.
Often when insuring your classic car, insurers agree a valuation with you – whereas ‘typical’ car insurance generally covers market value as of the date of an insurance claim. With us, you’ll get Free Agreed Value as standard! If you know someone with a classic car, they may refer to having one as a lifestyle. Classic car insurance more often than not will have European cover, this means being covered in a European country as standard.
Why it’s important to seek specialist insurance for your classic car
If you’re still not sure if your car is a classic or not why not call Heritage Classic Car Insurance on 0121 248 9229 for a friendly conversation. Our knowledgeable team can help you find out whether your car is eligible for classic car insurance, too, and can introduce you to our highly flexible multi car cover, for classic and modern cars together.