How will a recession affect classic car prices?
Discussion
RATATTAK said:
Canon_Fodder said:
Proper classics - not at all.
The super rich are immune to recessions which only impact normal people.
I'm really thinking about classics costing around £30K.The super rich are immune to recessions which only impact normal people.
I'd like to think that when the s
t really hits the fan I'll be able to pick up a Ferrari Testarossa for an early 2,000s price. In reality, this particular crisis appears to be very profitable for the rich, so I suspect collectible cars will be untouched, unlike in the '80s crash when Ferrari F40s - which had ballooned to £1million from their sub-£200k list price - slumped back to sub-£200k. Also, everyone who loves cars of that era remembers what happened to the Jaguar XJ-220!
t really hits the fan I'll be able to pick up a Ferrari Testarossa for an early 2,000s price. In reality, this particular crisis appears to be very profitable for the rich, so I suspect collectible cars will be untouched, unlike in the '80s crash when Ferrari F40s - which had ballooned to £1million from their sub-£200k list price - slumped back to sub-£200k. Also, everyone who loves cars of that era remembers what happened to the Jaguar XJ-220!fido said:
They tanked in the 2008/9 credit crunch so expect similar IF there is a recession.
A LOT of cars have gained serious value over the past decade and a LOT of people have missed out on their chance of ever buying their dream car - and I’m not talking about million pound supercars, its the £20k+ market.What I mean by that is I’m sure there are a whole line of people wanting in, even discounting a number that will have to tighten their belts and make sacrifices, I still think these prices will stay firm. Not for the landfill that is being brought out at the end; I saw a Rover 200 up for £9k for example. but think about the cars that not that long ago where attainable that aren’t now, there’s too many to list.
They aren’t making these cars anymore and with the onset of EV I don’t think it can be compared so easily to previous recessions.
Jon556 said:
A LOT of cars have gained serious value over the past decade and a LOT of people have missed out on their chance of ever buying their dream car - and I’m not talking about million pound supercars, its the £20k+ market.
What I mean by that is I’m sure there are a whole line of people wanting in, even discounting a number that will have to tighten their belts and make sacrifices, I still think these prices will stay firm. Not for the landfill that is being brought out at the end; I saw a Rover 200 up for £9k for example. but think about the cars that not that long ago where attainable that aren’t now, there’s too many to list.
They aren’t making these cars anymore and with the onset of EV I don’t think it can be compared so easily to previous recessions.
That's the opinion I was looking for, I do hope you're right.What I mean by that is I’m sure there are a whole line of people wanting in, even discounting a number that will have to tighten their belts and make sacrifices, I still think these prices will stay firm. Not for the landfill that is being brought out at the end; I saw a Rover 200 up for £9k for example. but think about the cars that not that long ago where attainable that aren’t now, there’s too many to list.
They aren’t making these cars anymore and with the onset of EV I don’t think it can be compared so easily to previous recessions.
Affordable classics : no reason to expect anything other than reduced demand and increased supply as people tighten their belts. Certainly there may be some who see an opportunity to buy, but it's only driven by enthusiasts in this part of the market. I.e. not an investment proposition.
At the high end, it is really a speculation/showing wealth proposition. Those with vast wealth and a tru love of these exclusive collectors' items wil not care about the economy, but the speculators will vue a topping of the market as an signal to sell and not buy.
If this happens and people see their paper profits shrink and can't wait 5 to 10 years for a recovery may offload quickly.
This happened in the 90s, so don't discount this possibility. Such cars are like works or art. Scarce but essentially useless. The value is due to perceived value and the potential to grow.
At the high end, it is really a speculation/showing wealth proposition. Those with vast wealth and a tru love of these exclusive collectors' items wil not care about the economy, but the speculators will vue a topping of the market as an signal to sell and not buy.
If this happens and people see their paper profits shrink and can't wait 5 to 10 years for a recovery may offload quickly.
This happened in the 90s, so don't discount this possibility. Such cars are like works or art. Scarce but essentially useless. The value is due to perceived value and the potential to grow.
Like every other recession affects classic car prices. Find a classic car mag from 1986/87 and another one from 1991. Do the same from 2007 and another from 2012.
People are buying classic cars as tax free investments will drop them like hot potatoes the moment the market drops and everybody else will be holding on to their money so they won't find buyers unless they go cheap. In 2009, classic cars started falling from the sky here in the US and I ended up buying a bunch of cars that I never thought I would ever own.
I don't expect prices to ever go back to 2012 but maybe 2017 levels.
People are buying classic cars as tax free investments will drop them like hot potatoes the moment the market drops and everybody else will be holding on to their money so they won't find buyers unless they go cheap. In 2009, classic cars started falling from the sky here in the US and I ended up buying a bunch of cars that I never thought I would ever own.
I don't expect prices to ever go back to 2012 but maybe 2017 levels.
Not looking good, it hasn't stopped me from adding a restored Triumph Vitesse MK2 to my garage but at some point soon it's fuel prices that will affect residuals as EV's are further phased in, you can't stop/slow progress! A Silver Shadow won't get the chance to be the classic high end value it deserves,like the e'type had as fuel and EV's will prevent that, unprecedented times for motoring, I'm going to enjoy fosil while it's still here after that I will only be able to youtube and read about it.
I work in the public sector so fortunately have a 'safe' recession proof job.
I am not immune for cost of living costs so decided to sell my classic 911 to build back up some savings should energy / food costs continue to increase as we are all being warned.
I did however buy a cheaper Cayman, it is probably near the bottom of it's natural depreciation curve and even if it does drop off XX percent it won't keep me up at night.
Another variable / factor compared to previous recessions is that now many of the classic / modern classics are end of era so can't be replaced easily once sold?
I would be surprised if the bubble burst but would expect to see some correction however new cars are so expensive what metric can you base 'reasonable' when valuing a classic car?
I am not immune for cost of living costs so decided to sell my classic 911 to build back up some savings should energy / food costs continue to increase as we are all being warned.
I did however buy a cheaper Cayman, it is probably near the bottom of it's natural depreciation curve and even if it does drop off XX percent it won't keep me up at night.
Another variable / factor compared to previous recessions is that now many of the classic / modern classics are end of era so can't be replaced easily once sold?
I would be surprised if the bubble burst but would expect to see some correction however new cars are so expensive what metric can you base 'reasonable' when valuing a classic car?
Classics are expensive as yields were low and they are tax free investments for some….plus some people had free cash through Covid.
Other more mundane classics dragged up as well, plus lending is cheap and if you the think the value will go up…why not?
Now interest rates higher and opportunities are more diverse.
If energy costs are not reduced by Govt intervention and inflation continues to rise, coupled with increased interest rates for mortgages and lending, then some people will reduce none essential spending and liquidate ‘nice to have’ assets.
So could that be a reset from ‘classics’ to ‘old cars’….
But counter to that is that new cars on finance at top whack pricing is a bubble that is ready to blow….so cheaper available old cars may still be in demand.
One thing I learned from working in banking for over 20 years is no-one really knows how things are going to pan out.
Other more mundane classics dragged up as well, plus lending is cheap and if you the think the value will go up…why not?
Now interest rates higher and opportunities are more diverse.
If energy costs are not reduced by Govt intervention and inflation continues to rise, coupled with increased interest rates for mortgages and lending, then some people will reduce none essential spending and liquidate ‘nice to have’ assets.
So could that be a reset from ‘classics’ to ‘old cars’….
But counter to that is that new cars on finance at top whack pricing is a bubble that is ready to blow….so cheaper available old cars may still be in demand.
One thing I learned from working in banking for over 20 years is no-one really knows how things are going to pan out.
jon-yprpe said:
One thing I learned from working in banking for over 20 years is no-one really knows how things are going to pan out.
You hit the nail on the head there. I have had many people say to me recently "interest rates are only going to go up now and they will continue to do so for the next 2 yrs". It is the unqualified nonsense people spout as fact. I wouldn’t mind if they said that they have a feeling rates may go up or a worry, or if they added a caveat. Gassing Station | Classic Cars and Yesterday's Heroes | Top of Page | What's New | My Stuff