Author: John Mayhead
Recently, Hagerty analysts in the US noticed that the gap between the top and bottom values of $1M+ cars that had grown by nine percent in the previous 12 months. Buyers of the most expensive cars, especially at auction, prize the very best presented cars much more than their tattier siblings. It makes sense; a superbly restored car will probably be ready to drive and enjoy, will look great and may hide fewer surprises for a new owner than something with a lot of age to it.
What’s interesting is that this is a common trend, not just for those cars right at the top of the market. The UK Hagerty Price Guide tracks nearly 3000 model generations, from sublime fifties and sixties Ferraris and Maseratis through to the more mundane Cortinas and Cavaliers of the eighties. Over the thirteen years of the guide’s history, 2024 marks the biggest average gap between values, our lowest ‘fair’ value now just 33 percent of the mean ‘concours’ price. Back in 2016, it was a very different story. Then, on average, people were happy to pay a shade under 40 percent of a very top car’s value for one that would only just pass an MOT.
So, what’s happened? 2016 was the year of the Brexit referendum, of historically low 0.25 percent interest rates, and a sense that every example of special classic cars – from early E-Types and Aston Martin DB5s all the way through to Land Rover SVR ‘Spectre’ Defenders – would continue to soar in price. Speculators saw an opportunity and started buying.
The market, and the world have changed a huge amount since then. Covid, Brexit, various wars and other domestic challenges have pushed up the cost of living. When prices fell after the Covid boom, a few people had their fingers burnt and realised that ‘investing’ in classic cars wasn’t quite the cash cow they thought it might be. Buyers, thanks to resources like the Hagerty Price Guide and huge numbers of online groups, are also much better informed than they once were.
This value gap between the best and the rest is, I believe, a Good Thing. It encourages investment through restoration, refurbishment and maintenance, and allows buyers to purchase at different price points. Plus, it makes us a more thoughtful market.
What are your thoughts on the above article? We would love to hear from you at hdc@hagerty.co.uk.