Classic car bubble?

[MichalPH]

While looking through classifieds recently, I noticed that most of the cars that I planned to own one day have become extremely expensive. And I don't mean cars like Lamborghini Miura or even Lancia Delta. Cars that were made in tens, and sometimes hundreds of thousands are coming up in value. When I was in position to buy my first car, I briefly cosidered E30 325i - they're like 5 times more expensive now! Even Honda S2000's started to raise - I know they have great engine, but they made more than 100 000 of them... Will the bubble eventually burst? Who will be buying all those cars when the current owners will be to old to drive? Current teenagers doesn't seem to care about cars that much.

Michal

[Slow]

Most e30 bmws seem to be turned into drift slags so there cant be a huge amount of standard ones about now - hence price rising.

[markmullen]

I sell high end sports cars for a living.

My take on this is as long as interest rates remain low (the forseeable future) and there is no capital gains tax on cars, if the cars you're looking at are no longer produced (eg E30 M3s, Delta Integrales etc) then they will continue to rise.

[rev-erend]

Not much money to be made in stocks shares banks. Houses are ok but there are costs. Cars can at least be enjoyed.

[Leins]

A lot of the current owners of E30s are in their 30s or 40s, so you've a while to wait

[mikey k]

markmullen said:

I sell high end sports cars for a living.

My take on this is as long as interest rates remain low (the forseeable future) and there is no capital gains tax on cars, if the cars you're looking at are no longer produced (eg E30 M3s, Delta Integrales etc) then they will continue to rise.

really kicking myself I didn't buy the Ferrari 16M or BMW Z8 I was looking at a few years ago

[mikey k]

MichalPH said:

Even Honda S2000's started to raise - I know they have great engine, but they made more than 100 000 of them... Will the bubble eventually burst?
Michal

S2000's were always going to get collectable
There are less of them left in the UK than there are Aston Martins in the UK!
I'm also wondering IF the bubble will burst, I can't see it whilst interest rates are so low, but you never know!

[derin100]

I've owned E30 M3 plus other E30s, E46 CSL ( http://www.bmwclassics.co.uk/gallery/index.php?spg... etc etc... All of which have gone up massively in value.

And yet everyone still seems to be missing the very biggest "lurker" of them all:

http://www.bmwclassics.co.uk/gallery/index.php?spg...


At one of the several times that I just owned too many cars I was faced with the choice of selling my E30 M3 ( http://www.bmwclassics.co.uk/gallery/index.php?spg... ) or my E31 840Ci Sport (above). Yet, when it came to making the decision between the two, it was actually a "no contest"!

[muffy]

The people with real money didn't spend it for a few years after the crash in 08, so prices fell of the big ticket classic cars. From 2011 or so the big money came back in the market. Now there is a bit more prosperity in the middle income, a lot of people look at the top segment and think there is money to be made in "modern classics". The bubble will burst but it will take a few years. Maybe 2017 when the UK votes to leave the EU (or not) or when the Scots finally have a go on there own, roughly about the same time I reckon.

The bubble has 2 to 4 years to run on modern classics, as thats the area of the market where the temporary money resides. The top end will still be strong as the real money never goes away, it just stops being spent for a while when things get sticky.

Sorry for being negative but hey, thats life!

[Studio117]

I think its generally a waste of time for most 'classics', unless your buying vintage ferraris or speculating on new limited editions the money needed to keep the cars in decent condition will be roughly the same as their increase in value over the same period imo.

How much does a engine rebuild on an F40 cost for example?

[bqf]

Yes, it appears there is a bubble, unless you look at other assets. The FTSE is at record levels, interest rates are practcially zero....folks are looking for something else.

Buy a classic now....you wont regret it

[Welshbeef]

bqf said:

Yes, it appears there is a bubble, unless you look at other assets. The FTSE is at record levels, interest rates are practcially zero....folks are looking for something else.

Buy a classic now....you wont regret it

Firstly buy a car you have always liked and wanted
Secondly only do so if you can afford it and have the space
Third enjoy the car don't expect any value increase instead assume it will depreciate like any normal car
Fourth realise that the cost to maintain store and actually putting on the miles all cost £ which may well cost a fortune and negate any value increase

[DukeDickson]

bqf said:

Yes, it appears there is a bubble, unless you look at other assets. The FTSE is at record levels, interest rates are practcially zero....folks are looking for something else.

Buy a classic now....you wont regret it

30 year itch, the devolping STD kind? Boom and bust has gone - all hail ZIRP, or Gordon, one of the two.


Do it wisely or go long and you'll be fine. Adopt the all in & what could possibly go wrong, the road may be somewhat rockier.

[Welshbeef]

DukeDickson said:

30 year itch, the devolping STD kind? Boom and bust has gone - all hail ZIRP, or Gordon, one of the two.


Do it wisely or go long and you'll be fine. Adopt the all in & what could possibly go wrong, the road may be somewhat rockier.

I've an uncle who has a very nice Daimler from the 1980's he's had it years probably but it's utterly immaculate - thing is even if it's worth whatever it's utterly irrelevant to him he loves it always wanted it and will never sell it.

In fact I'm highly confident it's in his will to go to my cousin - who isn't really into cars but given its his dad's car he would treasure it and would never sell.



I'd wager many classic buyers do it for the love of the car and never sell.




Personally I've always wanted a Cerbera 4.5 V8 red rose and a 928 GTS and DB7 Masserati 3200 GT something of that ilk. Modern ish classics which I grew up with as poster cars they are still attainable and will never go down in value of they did I wouldn't sell.

[DukeDickson]

Welshbeef said:

DukeDickson said:

30 year itch, the devolping STD kind? Boom and bust has gone - all hail ZIRP, or Gordon, one of the two.


Do it wisely or go long and you'll be fine. Adopt the all in & what could possibly go wrong, the road may be somewhat rockier.

I've an uncle who has a very nice Daimler from the 1980's he's had it years probably but it's utterly immaculate - thing is even if it's worth whatever it's utterly irrelevant to him he loves it always wanted it and will never sell it.

In fact I'm highly confident it's in his will to go to my cousin - who isn't really into cars but given its his dad's car he would treasure it and would never sell.



I'd wager many classic buyers do it for the love of the car and never sell.




Personally I've always wanted a Cerbera 4.5 V8 red rose and a 928 GTS and DB7 Masserati 3200 GT something of that ilk. Modern ish classics which I grew up with as poster cars they are still attainable and will never go down in value of they did I wouldn't sell.

Which is all good. I'm of the same ilk, but wouldn't chuck daft money at what is sometimes less than wonderful stuff. Just think that there are equally many people doing exactly the same as last time around & those that don't buy wisely, or out of genuine desire, will at some point get toasted. No idea exactly when, but can't be that far off at current rates of sillyness.

[Welshbeef]

DukeDickson said:

Which is all good. I'm of the same ilk, but wouldn't chuck daft money at what is sometimes less than wonderful stuff. Just think that there are equally many people doing exactly the same as last time around & those that don't buy wisely, or out of genuine desire, will at some point get toasted. No idea exactly when, but can't be that far off at current rates of sillyness.

Every asset class has cycles the last crash in the late 1980's was eye watering - well for those who bought in and were leveraged/had to sell. Those who were fine just held the asset no need to sell just wait to avoid any losses.


It's an investment/purchase and if you cannot afford it yet go ahead knowing your gambling on prices rising to justify it then if and when they fall and you need to sell - well you knew it before and if you didn't / didn't understand then hard luck really.



When everyone with a vested interest keeps telling you you have to get in its madness not to you cannot lose ... Time to walk away worst case they were right though if that was the situation they would be buying more and more to maximise profits themselves why share be greedy.

[derin100]

Studio117 said:

I think its generally a waste of time for most 'classics', unless your buying vintage ferraris or speculating on new limited editions the money needed to keep the cars in decent condition will be roughly the same as their increase in value over the same period imo.

How much does a engine rebuild on an F40 cost for example?

This is very true and often not highlighted by the dealers with a vested interest in telling you what a great "investment" buying your "classic" car is going to be.

For example, I think I sold my CSL about 4 years ago for £28K. In fact, it took an age to sell! What's it REALLY worth now? (Not what some dealers are hyping it to be worth) Maybe £40K?

Now that car was costing circa £2K per annum just to own without even turning a wheel by the time one considers Insurance, Road Tax and a service...initially I even had it under BMW Warranty at nearly a £Grand/per year.

So, shave those annual costs off the notional value today and suddenly that "investment" doesn't look quite so astute coupled with the fact that one has two Swords of Damocles constantly hanging over one. These are in the forms of either something going bang on the car requiring an expensive repair and thus wiping out any gains or the risk of the whole market going bang on you (or that particular model peaking and the hype moving on to something else), leaving you high and dry!

[Axionknight]

mikey k said:

S2000's were always going to get collectable
There are less of them left in the UK than there are Aston Martins in the UK!
I'm also wondering IF the bubble will burst, I can't see it whilst interest rates are so low, but you never know!

That's probably because tons of 'em were crashed and written off, mine included!

[Welshbeef]

derin100 said:

This is very true and often not highlighted by the dealers with a vested interest in telling you what a great "investment" buying your "classic" car is going to be.

For example, I think I sold my CSL about 4 years ago for £28K. In fact, it took an age to sell! What's it REALLY worth now? (Not what some dealers are hyping it to be worth) Maybe £40K?

Now that car was costing circa £2K per annum just to own without even turning a wheel by the time one considers Insurance, Road Tax and a service...initially I even had it under BMW Warranty at nearly a £Grand/per year.

So, shave those annual costs off the notional value today and suddenly that "investment" doesn't look quite so astute coupled with the fact that one has two Swords of Damocles constantly hanging over one. These are in the forms of either something going bang on the car requiring an expensive repair and thus wiping out any gains or the risk of the whole market going bang on you (or that particular model peaking and the hype moving on to something else), leaving you high and dry!

Though if you are running it as your only form of transport then some of those £2k per year costs you'd be incurring anyway with another vehicle.

That said using it as a daily driver will wipe out any value it has - imagine a 300k mile F40 how much less than a 4km vehicle is it worth? Id say firstly it's no longer a collectors car so your looking at a different set of buyers clearly at a lower value due to less demand. I'm sure the owner who would do 300k miles would really enjoy his F40 though the seats are bloody cramped and knees right to the dash etc .



The other point is very long term ownership means preventative servicing and part replacement which most have never done on modern cars IE
Engine mounts
Steering wheel
Reupholstered interior
Detailed engine bay
New brake pipes
Brake servo
Gearbox oil change
OEM parts only - wonder if it's worth buying a car with lots of pattern parts then as they wear change back to OEM thus adding value?
Exhaust OEM on say M3's are thousands
New bushes
New drop links
New springs
New shocks
New underseal
New door seals
Wheel bearings
Radiators
Condensers
Etc.
where a normal car you may elect to just run it worn out/not fix air con properly not change engine mountings not properly repaint and scratches


How much is a full engine bay detail? £700?

[Bebee]

The scrappage scheme must have helped in terms of making a high volume production car rare.
I never thought the MK1 Escort would be a residual riser, crazy prices now!