24/11/2021

Classic cars: pleasure, investment or a bit of both?

Vehicle

Do you collect classic cars? If so, you’d be one of an enormous 1,593,827 British people who partake in the collectors’ circle: a number which has risen by 50% since 2016. ‘

There are plenty of reasons for investing in a classic. From the tight-knit car club community to the feeling of owning something with historic significance, it’s certainly nice to have an Aston Martin DB5 tucked away in the garage ready for sunny road trips along country lanes. However, with the price of collectible cars rising by around 1.5-2% each passing year, many collectors are choosing to buy classics as an investment opportunity rather than simply out of their own passion for cars.

25% of drivers who intend to buy a classic car in the next 12 months will be buying for pleasure, according to a survey by Chubb, with a larger 30% stating they’d choose to buy one as an investment opportunity. This might not be surprising considering the classic car collectors’ market is worth an enormous £7.2 billion each year[1].

In their survey, Chubb split up collectible items up into categories, including classic cars, art, jewellery, gemstones, wine, watches, spirits, designer accessories and sports memorabilia.

There were 1,212 participants in total, all of whom had purchased a collectible item over the past 12 months. The results showed that the most popular collectible items were wine, jewellery and watches. Classic cars, on the other hand, came last on the list, with only 24% of those surveyed having bought a classic in the past year. This may not be surprising, however, especially when considering their specific storage requirements and often expensive price tags that can come with owning a classic.

Information taken from survey conducted by Chubb Insurers

How do classic cars compare to other collectibles when it comes to investing?

Despite their low popularity compared with other categories in the survey, classic cars can be one of the best buying options for those who want to see a return on their money. In fact, the Chubb survey showed that art and classic cars were the only two categories in which ‘profit outpaced passion.’

The classic car market has boomed throughout the pandemic according to classic car auctioneers and dealers – and it doesn’t seem as though it will drop anytime soon. According to the Federation of British Historic Vehicles Clubs (FBHVC), 9% of adults in Britain would like to own a classic car; that’s around 5.2 million people. Alongside statistics showing the appreciating value of classics, it’s easy to see why money-savvy drivers are choosing to put their money – and trust – in the growing value of classic cars.

That’s not to say that each classic car owner only buys the car solely for pleasure, or solely to make some money. Often, it can be somewhere in the middle. You’ll find plenty of classic owners in the community who buy classic cars for the lifestyle it brings: going to car club events, driving around on sunny days and the feeling of owning something with historic significance. However, many of the same owners will also look at the financial aspect of their classic before buying it, and estimate whether they’ll be able to make some money off of it when it’s time to sell. Ultimately, if you’re going to invest in something worthwhile, at least a classic car can give you some fantastic memories along the way!

 

To speak with an advisor about your classic vehicle insurance needs, please contact your personal client manager or, if you’re not already a customer, give our team a call on 0121 248 9440.

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    [1] According to data from the Federation of British Historic Vehicles Clubs (FBHVC)