Examine the inner workings of the vintage automobile industry

Chris Carter claims that the market for vintage cars has lost momentum due to lower prices

To say that the wheels on vintage cars have been removed from the market might be going too far. However, prices have unquestionably plateaued. For instance, consider the Blue Chip index that is created by specialized insurer Hagerty. It monitors the costs of 25 of the most sought-after post-war collectible automobiles. The index increased by 5.5 percent in the ten years ending in January 2025. However, the index jumped 118 percent in the six years prior to 2015, or from the beginning of the ultra-low interest rate era. Therefore, we can reasonably assume what caused prices to start and, consequently, what caused the brakes to be applied again.

The index has only managed a 2.6 percent increase since January 2022, which roughly corresponds to when the Bank of England lifted interest rates off the floor (0.1 percent). This is in contrast to the annual rate of consumer-price inflation, which averaged 6.3 percent during that three-year period. Therefore, it should not be shocking that the index shrank by 2% in the 12 months leading up to the beginning of 2025. There is still a significant amount of froth being removed from the market.

However, that would be like using a very wide brush to paint a picture. Due to the fact that no two Ferrari 250 GTOs are alike, collectibles markets are notoriously difficult to monitor. For example, the Blue Chip index limits itself to 25 because there are so many distinct makes and models of collectible cars that it would be impossible to keep up with them all.

The sample size, or the total number of sales in a given year, is probably going to be small, and there will undoubtedly be a fairly wide range of performances among the index's constituent parts. Even if one model performs exceptionally well, the other 24 may overshadow it.

The market for vintage cars caters to picky collectors.

Under the hood of the Hagertys Blue Chip index, we can observe that the value of a 1958 Bentley S1 Continental DHC in "excellent condition" (all cars ranked in the indices are rated "excellent," the second highest of four categories) decreased by 19 percent during 2024. One could sell for about £850,000 today. A 1970 Plymouth Hemi Cuda convertible in January could have been expected to cost £2.06 million, which is 15% less than the price from the previous year.

However, you would have paid £4 million for a 1971 Lamborghini Miura SV, which is a third more than it was in January 2024. Thus, collectors who are investing in a classic car must be extremely selective about the model they purchase, even before accounting for storage, upkeep, and insurance expenses.

During the year ending in January, a few car indices have managed to make some progress. The Hagertys Supercar index increased by 2%, with the 1994 - 1998 McLaren F1 leading the way with a 5% increase in value to £25.4 million. A 1979 Porsche 911 Turbo Carrera coupe's price increased by 19% to £185,000, and post-war German collectible cars were worth 1% more than they were a year earlier. However, seven of Hagerty's eleven indices fell, and one was flat. The Ferrari index fell 9%, and American muscle cars lost 10% of their value over the course of the year.

However, when a 1962 Ferrari 250 GTO Berlinetta (which is not part of the Ferrari index) sold for £38.1 million with Bonhams last August, it became the most expensive car ever to be sold at auction in 2024. Actually, starting in 2014, seven out of the ten most costly vehicles ever sold at auction are Ferraris. Even though these are extremely uncommon and extreme examples, it is evident that Ferraris are still in high demand. A pinch of salt is required because the prancing horse's own index rather emphasizes the point.

The most expensive vehicles still command exorbitant prices. When it sold for 51.2 million dollars in February, a 1954 Mercedes-Benz W 196 R Streamliner came in at number two on that top ten list. However, as is often the case with other collectible assets, like blue-chip artwork, this is the rarefied area of the market that is generally unaware of other economic developments.

According to Brian Rabold of Hagerty, the "collector car" market as a whole "has been uneven for the past several years, with auctions recording lower average prices and private sales activity slowing." Decide carefully what you want to buy, and buy it primarily because you like it.

According to David Stedman, a classic car specialist at the law firm Clarke Willmott LLP, private sales of classic cars in Britain are typically "sold as seen" with "little legal protection for any purchaser." Your legal rights are outlined in the Consumer Rights Act if you purchase from a dealer. Tell the seller that you plan to drive your vintage vehicle frequently on public roads because cars that were first registered more than 40 years ago are exempt from MOT tests.

It is unrealistic to expect a vintage car to be road-ready if it is marketed as a "collector's piece." According to Stedman, courts will also take into account the car's purchase price, with the understanding that "a purchaser paying less for a restoration project cannot have expected the vehicle to live up to concours standard." Therefore, let the seller know how you plan to use the vintage vehicle and have it inspected "with your mechanic present" before purchasing it.