Despite a slow start to the 2020 classic car season due to a fairly flat economy and the onslaught of COVID, the market eventually picked up, as enthusiasts and collectors embraced the upswing in online auction activity. The Government’s financial assistance packages benefitted many car-buying budgets, not to mention the extra spare time some people had on their hands due to furlough schemes.
These factors and a lower supply of high-quality vehicles helped to support market conditions through 2020, as buyers looked for classics that could help tick some bucket lists and investors sought other ways to beat dire economic forecasts.
Auction houses had already reported a modest uplift in classic car prices over recent months and this was encouraged by better trading through the second half of 2020, mainly due to low supply. My early forecast for 2021 envisaged more of the same.
Supply remains tight for some older and air-cooled models. As ever, higher volume cars are more available, though low owner and low mileage is still hard to find. With returns still low in traditional investment schemes, classic car investors who do not face economic stress in 2021 will leave their favourites in storage and this will keep the best opportunities to buy in low supply.
One new factor I am watching this year is the effect of Brexit: how might cross-border purchases be affected by the new rules and will fewer European buyers in the UK markets (due to potential changes in currency rates and access constraints) affect selling prices? Will more challenging EU market access for UK classic car buyers – so used to bringing cars across the Channel with little or no paperwork to complete and no tax to pay – compel them to buy at home? There is some potential impact here.
As of Spring 2021, trends include:
- Slower sales for cars that have gone from just-about-affordable to expensive
- The desire for original unmodified cars remains strong
- Low supply of unmodified, original cars continues to support prices
- The “modern classic” sector appears to be maintaining its 2020 momentum
- Classics in the very best condition should have a good year, but high restoration costs and a shortage of skilled classic car workshops could mean that older cars and vintage models needing work may find the market increasingly tricky
- The proliferation of online auction portals makes this arena splintered, crowded and confusing to buyers. This may translate to lower buyer confidence with lower prices for online auction sales