Hagerty’s British division reports that the collector car market in England grew by 9.4 percent in May, though it adds that exchange rate fluctuations had a “dramatic impact” on vehicle values.
Hagerty also reports that recent online auctions delivered strong sales results.
However, the company added, “In many ways, the most recent update to the UK Hagerty Price Guide is misleading. Overall, the average value of models on the guide is up 9.4 percent since the last update in November 2019, and at first glance it would appear the classic car market is bouncing back to full health. The reality, however, is slightly more nuanced.”
For example, within the overall database is the Hagerty Classic Index that monitors the 50 most-popular classic models in the UK, analysis shows that 34 percent of those vehicles increased in value in May while 44 percent decreased. Among the winners was the Volvo P1800S, up 10.4 percent. Losers included the Ferrari Testarossa, down 10.2 percent. Meanwhile, the value of a Jaguar E-type SIII roadster remained static.
“Of the 44 percent that fell in value, the majority were enthusiast models such as the MGB GT (down 3.81 percent) and the Citroën DS21 (down 7.32 percent),” Hagerty UK said.
“The constraints of lockdown meant that most buyers were unable to view potential purchases which had an undeniable effect on the market. Those that did manage to sell, tended to be sold for less than they would have prior to lockdown.
“What explains the 9.4% overall market rise already mentioned? One element is exchange rates. Some of our models – around 8 percent of those in the guide – are classed as ‘global’ cars. These are models that collectors would travel the globe to buy and, by their nature tend to be rare and often the most expensive models listed within the database.”
Hagerty UK offers this example: In November 2019, when the U.S. dollar was worth 78 pence, “the most expensive car in our guide was the Ferrari 250 GTO, valued at £52 million ($66.7 million). With exchange rate differences, the same car would be worth £54.6 million today (nearly $70 million). But the increase in value comes only from the updated exchange rate.
“Another factor to be considered is that expensive cars tend to be perceived as investments,” Hagerty UK said. “In turbulent times, tangible assets like cars can be attractive propositions and we’ve seen very high quality, very expensive cars change hands for very strong prices, even during global lockdown.”
So, what does this all mean to a car owner?
“Don’t worry about it too much,” said John Mayhead, Hagerty UK head of valuations. “If you’re an enthusiast, just enjoy your car. Unless you absolutely have to sell, the current value is not very important except for insurance purposes. I’d recommend people wait for our next Price Guide update in September when, we hope, some semblance of normality has returned.”
Regarding the online auctions, Hagerty UK said “an uplift in online auction searches was apparent during lockdown and now, with some constraints being relaxed, a flurry of purchasing seems to be taking place.”
However, it added, “This is likely to calm down again and we forecast a temporary spike.”