Lessons from Abroad: The Classic Car Market in the UK

Although the U. S. is the undisputed center of the classic car market as more vintage vehicles find new owners here each year than anywhere else on the planet, a healthy market for classic, collectible and historic vehicles outside of the USA does exist today, with a large part of that activity taking place in Great Britain. Granted, the classic car scene in the UK sees a lot more Jaguars and Ferraris and far fewer U.S. muscle cars crossing the block, but trends in both markets have been similar with values and activity recently rising to the point that just like here in the U.S., many are beginning to wonder if the super-heated market in the UK is sustainable and whether or not the bubble will soon burst.

The market for classic cars in the UK is currently strong and the prices at auction have continued to rise and show no signs of slowing. And, just like here in the U.S., as long as we have low interest rates, values will still probably continue to rise. A recent article in the UK Telegraph newspaper titled “Banking on Success in the Classic Car Market” stated that “…classic cars can make you far more money than any bank account.” As far as rising values in the UK, the independent investment research house, Historic Automobile Group International, said the values of “exceptional historic” cars have gone up by 12 percent this year alone and when compared with values at the end of 2008, they had climbed a staggering 163 percent.

Even with rising values, some observers and enthusiasts point out that upward growth cannot continue forever, but so far, no one has identified anything on the financial horizon that would cause the market to experience a big correction. The UK market is primarily enthusiast-driven with the majority of people buying due to their interest and emotional attachment to particular cars. Investors seem to have less of an impact, and fewer buyers of any type are financing their acquisitions these days. When a research firm (Classic and Sports Finance) analyzed three recent large UK auctions, it said the market would be best served by keeping things sensible, as optimism due to continually rising values has led to a slight emerging trend where some sellers have too high an expectation of their cars’ value and pre-auction estimates are not being met.

The UK classic car market may slow down a bit in the future as some types of cars stop increasing in value, but the general consensus is that the overall market isn’t likely to come crashing down anytime soon. Much like the market here in the USA, the high end of the market is very stable. The values of the top cars will probably continue to appreciate, while the prices for lesser cars will probably stabilize a bit too. As long as the best cars enjoy a high-demand profile, it will always help the lower value enthusiast market. Barring any unforeseen international financial shake-ups, the classic car market in the UK as well as the marketplace here both look like they will be stable for some time to come.