Classic car bursting...??

[Welshbeef]

http://www.evo.co.uk/news/17345/comedian-jerry-sei...

Plus Chris Evans sold all his cars off
Plus Rowan Atkinson selling his F1

Are these along with the incredibly toppy Ferrari race car that sold last week the indicators the game of musical chairs is starting to slow and you want to ensure you grab a seat quickly else you'll be carrying the can

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Hamish Finn said:

Porsche 944.

- none in his list as far as I can see.

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HustleRussell said:

No.

So what are the signs of a classic car market at or very near its peak?
Surely you'd agree the risk of that being the case has increased notably

[Welshbeef]

Is the Mk1 Clio 172 RenSport a future classic?

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swisstoni said:

Does the market have to burst? Can't is just cool down?
Or can't, for instance, the speculator market burst but the enthusiast old car sector survive?

Should the classic car market be viewed as one amorphous lump when the people at the top may as well be buying cases of wine or empty flats in London?
Is, in fact, the only thing connecting the two groups just that they have an interest in old things on wheels?

It's a domino effect

Demand vanishes
Supply starts to increase
People really need to sell as say they over leveraged and need to keep a roof over their heads
Sell at prices they can people get worried thinking heck it's going bad I'm getting out now.
Repeat and suddenly lots of supply being sold quickly.

Even people who don't need to sell get concerned as their assets value is getting decimated - there are those owners who say bought their car with say dad or granted no longer with us and it would need hell to freeze over for them to sell.

[Welshbeef]

The Surveyor said:

Nobody wants to go back to a situation where values drop below the restoration costs of most 'affordable' classics. The market is over-inflated and it is certainly due a levelling off, a reduction in growth, but certainly not a plummet in value. Classics that are relatively worthless quickly become abused and neglected so be careful what you wish for.

Those of us old enough to remember the last dip will remember the market flooded with £20k worth of filler and chrome being peddled as Mk2 Jaguars....

But they are not worth the money they are being sold at.
It's intrinsic economic value is far lower. I recall going to many classic car events (which I love) but the prevailing memory at every event was the prices are only going one way you need to buy now. Or take Ferraris the dino that's gone now X now y etc so put your money into X Ferrari as that will follow he same suit.

That is where it's dangerous and house of cards.

Or worse still you see a massive spread in the press Telegraph E46 M3 CSL guaranteed future classic with strong capital appreciation. Criminal that people do this to stoke a market - it can lull naive investors in believing the honey pot is at the end of every rainbow - it isn't prices go up and down and could go down for a long time before going up again.


Also everyone kind of sweeps the possibility of Capital gains tax on these under the carpet - while it's clearly a risk George Oz has few options to close budget gaps there is no rhyme or reason why they and other asset classes are capital gains tax free and really it's wealthier people who have these as such it would ring true for those with broadest shoulders. It's a risk and if it happened how would it change the market dynamic?

[Welshbeef]

DonkeyApple said:

True but there is a lot of elasticity in the cost of restoration. For example, NOS parts become much cheaper and restorers slash their labour costs. At present labour costs are huge having risen almost non stop for some time and same with parts, people are asking and the desire is there to pay.

But even if prices plummet 30-50% on the stuff that's really been bid up and all the junk is revealed for what it is and repriced at zero, we've come so far that there is still plenty left to justify the costs of restoration for many.

I think a key factor in the UK is that very few 'investors' have actually ever seen a real crash as most recent major market corrections in various asset classes have been bailed out by governments. No one is going to bail out this particular market and as it is totally unregulated there is huge amounts of fraud to be uncovered. Any crash will be a proper one.

Criminals use classic cars and other art forms to rinse dirty cash too and move high value items between tax jurisdictations.

Remember all those tv shows on location location location etc well that got people into thinking they were property developers, well countless sit car shows are on tele too wheeler dealers diy sos, gas monkey, overhauling, chasing classic cars etc.


Is anyone here bully big balls now and willing to stump up £1m+ for a F40? Would they leverage to the hilt to buy it, if not and the assumption is prices would continue to raise its illogical you would clearly do so otherwise you don't really believe what your saying.

[Welshbeef]

NJH said:

I mentioned it in another thread but I always regretted not buying that 911 2.4S I fell in love with at £17k about 12 to 13 years ago. It was mint unrestored import from Italy. Seen similar up for sale at a well known Porsche specialist dealer for £250k. That is a terrifyingly long way to fall if we do indeed have a proper crash, as I feel such a car is worth maybe 40 to 50 tops IMHO, much as they were in fact a few years back when people were already saying the prices were crazy and it was a bubble that was about to burst. Anyone saying back then that a 2.4S was going to become a 1/4 million pound car would have been laughed at but here we are.

Id guess those who are in are they tempted to offload now at what would be a great price or are they holding on for further gains? Or do they simply put fingers in ears "lalala I can't hear you" prices will never fall.
If they don't fall and continue to rise clearly they will be LOL at such ideas but it's a big gamble.



Take this year I wish I'd sold my bank stocks instead 26% down in a month great

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hot66 said:

Well I'm fked then ... 2.4s, csl and a 964c2

Looks like I should just stick with my heavily depreciating 5 series ....

Surely the question is when did you get in - if it was early days it's value now is lovely but you've huge % falls which you could take without impacting your in price. Clearly ideally you'd want to exit at top of the market and then get back in near the bottom. Just holding when there are big gains to be crystallised must mean they have other value to you sentimental or another?

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hot66 said:

Bought my cars for driving and because I love them.... 13 years with the 2.4s , 3 years with the csl and only 18 months with 964

Depreciation proof is the only defence I have with the wife when another large bill for one of them rolls in

At least I don't need to face the depreciation my mate is looking at on his new range rover autobiography

Edited by hot66 on Tuesday 9th February 21:38

So at what point would you get the jitters and exit the market cash in sit back wait and then get back in when at the bottom/or are you an owner who would simply hold regardless of any drops?

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DonkeyApple said:

An impending boost to the domestic classic car asset class is that investors in both pensions and property are about to get fked again in April and make sticking spare money into something that's tax free and fun to store possibly more attractive?

Fair point But you can only pay in £40k a year and realistically not many fulfill that quota as such the tax rebate is eager on average might be between £2-10k a year


I simply don't see what vehicle they would procure for such low £ values unless they leveraged up so you have interest costs to consider. Or you might simply not have the space to buy a new sub £10k classic car year on year.


Rare wine is easier

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HustleRussell said:

Welshbeef said:

Clearly ideally you'd want to exit at top of the market and then get back in near the bottom. Just holding when there are big gains to be crystallised must mean they have other value to you sentimental or another?

...or you could just buy cars you want and sell them if or when you don't want them anymore?

Complicated concept, I realise.

But the point was you'd have that spare pension contribution every year and unless every classic car buyer is acquiring more and more every year then where is that money going?

You'll not get much of an investment classic car for £10k - you might but might not, so let's say you wait 4 years to build a war chest to buy said car - you then have the problem the market has moved on significantly.