Classic Car Values Continue to Accelerate: A Look at the Thriving Collector Car Market

In the ever-evolving world of luxury investments, classic cars have firmly established themselves as more than just modes of transportation. They have become coveted assets in the portfolios of high-net-worth individuals, combining passion with profit potential. The latest insights from Hagerty’s Price Guide UK reveal that classic car values are on a remarkable upward trajectory.

A Resurgence of Million-Dollar Classics

Over the past five years, the classic car market has witnessed a resurgence of million-dollar classics. According to data tracked by Hagerty, the number of £1 million+ open-market cars has more than doubled during this period. What’s even more remarkable is that this growth rate is even higher based on Hagerty’s global insurance data, reflecting the escalating interest in these automotive gems.

A mere few years ago, the concept of online-only auction sales for million-dollar classics was virtually unheard of. Fast forward to today, and such sales have become a regular occurrence, not only in the United Kingdom but also in the United States.

The trend began with the groundbreaking online sale of a 1956 Mercedes-Benz ‘Gullwing’ 300SL on Bring A Trailer in 2018, marking the first-ever online-only US$1 million+ car sale in the US. Thereafter, The Market facilitated the first UK £1 million+ sale, featuring a legendary blue Ferrari F40 in 2021.

Decades of Distinction

A closer look at the data reveals that the surge in £1 million+ classic car sales is primarily concentrated in two decades: the 1990s and the 2000s. The 1990s, in particular, witnessed the most significant increase, accounting for nearly 7% of the growth. In contrast, sales of 1950s classics experienced a slight decrease of just over 5%.

Interestingly, the median value of these classics increased only marginally, indicating that the predominant surge occurred in modern classics positioned at the more conservative end of the price spectrum.

Collectable Classics on the Rise

Defining the term ‘collectability’ in the classic car world is a challenging task, but many cars have surged in value. Topping this list is the iconic McLaren F1, which witnessed a staggering 86% surge in value over the last year. Both F1 LM and ‘standard’ F1 models experienced remarkable value increases due to soaring demand.

Hagerty also analyzed the volume of cars sold at public auctions, listing total sales of cars worth in excess of £100,000. Predictably, the podium places were occupied by prestigious names, with Chevrolet unexpectedly securing the fourth position, demonstrating that quantity often brings its own quality.

An unexpected entrant on this list was Land Rover, ranking at number 25. Land Rover’s climb was fueled by sales of North American Specification (NAS) Defenders, James Bond ‘Spectre’ vehicles, and early Range Rovers that have crossed into the £100k+ category.

Top Performers and Outliers

The classic car market has witnessed trends similar to those in the overall collector car market. Values experienced growth until the end of 2019, followed by a dip caused by the initial response to the Covid-19 pandemic, and then a robust recovery. However, there are some notable outliers.

Jaguar, for instance, has seen a weakening trend in values. This is due to the Jaguar market having already reached record prices during the mid-2010s for rare examples like the E-Type S1 OTS and the alloy-bodied XK120. A correction in these values was already underway before the pandemic.

In contrast, Lamborghini values have continued to rise sharply in percentage terms post-pandemic. This can be attributed to the brand producing fewer models, thus having a smaller pool of cars that significantly affect its average values. Models like the Countach and Miura have experienced substantial price gains.

Shifting Demographics of Classic Car Buyers

Another noteworthy shift in the classic car market is the changing demographics of buyers. Generation X, with its peak earning potential, is now entering the fray. As their children leave home and they pursue their automotive dreams, Gen Xers are becoming a prominent force in the market. While boomers still own 52% of all classic cars covered by Hagerty, Generation X and younger individuals accounted for 63% of insurance quotes in 2023. Additionally, the younger millennial and Gen Z generations are witnessing rapid growth in quotes and may soon comprise the largest group of buyers.

In conclusion, classic cars continue to be a dynamic and thriving segment of the luxury investments landscape. With values on the rise, a diverse range of collectible classics, and evolving buyer demographics, the world of classic cars remains an exciting and rewarding arena for passionate collectors and investors alike.