Is the classic car market stalling? Prices up just 1% this year and a quarter of collectible cars fall in value, with Aston Martins and 80’s Ferrari’s hit
Classic cars have been the top-ranking alternative investment assets in recent years with values soaring in the last decade
· A report reviewing classic car prices says the market has slowed in 2018
· Of 50 collectible models that are popular in the UK, just half went up in value
· A quarter depreciated during the 8 months - the rest were unchanged
The classic car market has boomed in recent years, but there are now signs that it could be slowing.
That's according to a new report, which has tracked the sale values of popular collectible models in the UK and found that overall sold and insurance valuation prices grew by just one per cent between April and December - the slowest rise in almost four years.
Of the cars analysed, just 52 per cent had increased in value in the last eight months and a quarter had depreciated, with classic Aston Martins, Jaguar E-Types and 1980’s Ferrari’s named among the stragglers.
Classic cars have been deemed the top-ranking alternative investment assets in recent years, with values soaring for even the modern classic examples from the '80s and '90s.
A report released last year by insurance specialist AXA Art said that prices have grown 192 per cent in a decade, putting it way ahead of other asset classes including fine art and wine.
Transaction data reviewed showed that the sector peaked in 2015, and there was evidence to show that year-on-year growth had slowed by the end of 2017.
This latest report from Hagerty Price Guide - a classic car index managed by the classic car insurer and valuations experts - suggests growth in the sector has almost ground to a halt during the last few months.
Since April 2018, values of 50 popular collectible models it logged had increased by just 1.07 per cent - the slowest periodic rise since the insurance firm started tracking prices in 2012.
This was calculated after reviewing over 40,000 individual values of more than 2,000 classic cars based on auction sales, insured values and private sale prices.
The report says the most significant declines in value were for models that were relatively cheap for a long time, then rose rapidly and have since started to shrink again.
This includes cars like the Aston Martin Lagonda Series I, which posted an average value decline of 11.9 per cent.
It was also a difficult period for a couple of iconic Ferraris, with the 308 GTB Standard down 10.7 per cent and the Testarossa shedding 7.6 per cent of its value between April and December 2018.
Hagerty also found that some cars that had risen steeply over the last few years have now started to hit a ceiling, with values for models including the MKIII Ford Capri, Mini Cooper 1275S and Porsche 911 (930) Turbo all tapering off.
Of the cars that did increase in value - which were 26 of the 50 models reviewed - the most significant riser was an unlikely classic car choice.
The MkI Mazda MX-5 saw the biggest value increase from 1989 to 1994 up by 8.5 per cent over the last eight months - more than any other collectible motor.
Mazda MX-5 1.6i: +8.5%
Lancia Fulvia Sport Zagato 1.6: +5%
Fiat 500 F: +4.3%
Aston Martin Lagonda Series I: -11.9%
Ferrari 308 GTB Standard: -10.7%
Willys MB Jeep: -8.6%
Ford Capri Mk III 2.8i: no change
Mini Cooper 1275S: no change
Porsche 911 (930) Turbo: no change
Source: Hagerty Price Guide (value changes from April 2018-December 2018)
Angus Forsyth, MD of Hagerty International, said it was clear the market is 'in a state of flux' but said prices were 'correcting rather than anything else' after years of rising values.
The biggest percentage drops are in those cars that rose rapidly in value over the last few years: early Jaguar E-Types, Aston Martins and 1980s Ferraris
Angus Forsyth, Hagerty International
For example, the Aston Martin DB4 Saloon has dropped by around 3.5 per cent (average value now £385,500 from £399,500).
'We’ve also seen some of these models struggle at auction. For example, we’ve noted six no-sales at auction since August of early ‘flat floor’ Jaguar E-Types - including two desirable ‘outside bonnet lock’ cars.'
The classic vehicle insurer said it had noted a disparity between sold values and advertised prices, especially for those cars that had taken a downturn.
For example, the average price of a Ferrari Testarossa sold at a major European auction this year was £87,800 and the most expensive was sold for £111,886 including commission by Artcurial.
In the US, these figures are similar with an average of £85,300 and a top value of £120,710 (RM Sotheby’s).
We believe that some sellers’ expectations are still higher than the market will bear
However, when we looked at advertised values the average is £116,000 and the top priced private car for sale is priced at £199,950.
'We believe that some sellers’ expectations are still higher than the market will bear, and we caution against using advertised values as a guide to valuing your car for insurance purposes or otherwise,' Mr Forsyth added.
'That said, this autumn, we have seen many of the UK auction houses setting realistic guide prices which their customers seem to be accepting; this is good for the market in the long run.'
Information supplied by Rob Hull.