Depreciating Classics
Discussion
Obviously, anyone who reads car adverts, watches Wheeler Dealers, or whatever, is familiar with/ rolls their eyes at the term "appreciating classic". I was musing earlier, about whether the "appreciating" part is basically redundant. Assuming you look after them and don't put gazillions of miles on them, once they've hit the bottom of the value curve, all cars you'd call classic only become older and rarer, so theoretically more valuable.
But, are there any examples of depreciating classics, where something has actually caused a specific car to lose value, or cars where the value curve looks more like an S than the usual U? Are there any cars where a significant problem has only come to light after they were already appreciating? What about external factors - something like the end of leaded petrol presumably hit values of cars which couldn't run on it, for example.
But, are there any examples of depreciating classics, where something has actually caused a specific car to lose value, or cars where the value curve looks more like an S than the usual U? Are there any cars where a significant problem has only come to light after they were already appreciating? What about external factors - something like the end of leaded petrol presumably hit values of cars which couldn't run on it, for example.
E63eeeeee... said:
Obviously, anyone who reads car adverts, watches Wheeler Dealers, or whatever, is familiar with/ rolls their eyes at the term "appreciating classic". I was musing earlier, about whether the "appreciating" part is basically redundant. Assuming you look after them and don't put gazillions of miles on them, once they've hit the bottom of the value curve, all cars you'd call classic only become older and rarer, so theoretically more valuable.
But, are there any examples of depreciating classics, where something has actually caused a specific car to lose value, or cars where the value curve looks more like an S than the usual U? Are there any cars where a significant problem has only come to light after they were already appreciating? What about external factors - something like the end of leaded petrol presumably hit values of cars which couldn't run on it, for example.
But, are there any examples of depreciating classics, where something has actually caused a specific car to lose value, or cars where the value curve looks more like an S than the usual U? Are there any cars where a significant problem has only come to light after they were already appreciating? What about external factors - something like the end of leaded petrol presumably hit values of cars which couldn't run on it, for example.
E63eeeeee... said:
- something like the end of leaded petrol presumably hit values of cars which couldn't run on it, for example.
Didn't affect the value of cars originally designed to run on leaded fuel at all. Quite straightforward: you got an unleaded conversion, you used a fuel additive, or (if you did limited mileage), you didn't bother and just ran on unleaded. So no effect on value.The only effect that could lead to depreciation of a classic car would be deterioration, ie, since purchase the car's condition has dropped: rusted away, not serviced or maintained, etc, etc.
You can have the "bubble bursts" effect of course, as in the early 1990s, where (almost overnight) classic car values fell across the board.
Edited by Sebring440 on Saturday 8th January 21:16
I reckon you might get these in future….
If you take a car like E30 M3, E46 M3 they’re simple enough to be worked on but usable if needed…. E92 still simple enough…. But in future if you have hybrid M4s etc you’ll end up with knackered batteries, computers that are hard to replace etc…
I think in time…. You could have stuff depreciating after it’s appreciated through classic status
Also looking at the demographic of goodwood revival you may have a fair few classics hit the market in not too distant future that next generations aren’t interested in!
If you take a car like E30 M3, E46 M3 they’re simple enough to be worked on but usable if needed…. E92 still simple enough…. But in future if you have hybrid M4s etc you’ll end up with knackered batteries, computers that are hard to replace etc…
I think in time…. You could have stuff depreciating after it’s appreciated through classic status
Also looking at the demographic of goodwood revival you may have a fair few classics hit the market in not too distant future that next generations aren’t interested in!
Sebring440 said:
Didn't affect the value of cars originally designed to run on leaded fuel at all. Quite straightforward: you got an unleaded conversion, you used a fuel additive, or (if you did limited mileage), you didn't bother and just ran on unleaded. So no effect on value.
The only effect that could lead to depreciation of a classic car would be deterioration, ie, since purchase the car's condition has dropped: rusted away, not serviced or maintained, etc, etc.
You can have the "bubble bursts" effect of course, as in the early 1990s, where (almost overnight) classic car values fell across the board.
Yeah, I'd definitely exclude cars falling apart from the consideration, unless there are examples where they all do it regardless of how well you look after them. I just find it unlikely you can have such a blanket rule with no exceptions at all. The only effect that could lead to depreciation of a classic car would be deterioration, ie, since purchase the car's condition has dropped: rusted away, not serviced or maintained, etc, etc.
You can have the "bubble bursts" effect of course, as in the early 1990s, where (almost overnight) classic car values fell across the board.
Edited by Sebring440 on Saturday 8th January 21:16
whp1983 said:
I reckon you might get these in future….
If you take a car like E30 M3, E46 M3 they’re simple enough to be worked on but usable if needed…. E92 still simple enough…. But in future if you have hybrid M4s etc you’ll end up with knackered batteries, computers that are hard to replace etc…
I think in time…. You could have stuff depreciating after it’s appreciated through classic status
Also looking at the demographic of goodwood revival you may have a fair few classics hit the market in not too distant future that next generations aren’t interested in!
I'm sure people of every generation have said this and been wrong, but I find it hard to imagine most modern or even fairly recent cars becoming classics at all, even before you take into account the potential difficulties of keeping really complicated hybrids working for long enough for them to start being seen with enough affection to appreciate. If you take a car like E30 M3, E46 M3 they’re simple enough to be worked on but usable if needed…. E92 still simple enough…. But in future if you have hybrid M4s etc you’ll end up with knackered batteries, computers that are hard to replace etc…
I think in time…. You could have stuff depreciating after it’s appreciated through classic status
Also looking at the demographic of goodwood revival you may have a fair few classics hit the market in not too distant future that next generations aren’t interested in!
I think theres certainly a possibility as each generation moves on. Previously desirable classics are no longer as attractive to the new wave of buyers, who may be more interested in cars of their youth than those of their parents youth, therefore having an impact on the price of those older cars.
Scenario 1:
This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
Stick Legs said:
Scenario 1:
This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
Unfortunately I think this is a pretty good best guess as to the future of classic cars. The only point I would add is how important technology will become to the next generations as against what I consider to be the joy of driving cars without driver aids. We are also on the verge of self driving cars being introduced, how many existing classics will be retrofitted with this kind of technology?This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
I own a Peugeot 304 cabriolet and a 1984 Mercedes W123 coupe. I thought the 304 might have gone up in value in the last 8 years but is worth pretty much what I paid for it.
The W123 is similar, worth about what I paid for it 5 years ago, despite certain experts saying they will skyrocket in value.
Both of these cars are not mint, but good clean, useable cars and I paid about the going rate when I bought them. There are other classic cars like Triumph Dolomites or other FWD Triumphs that don't seem to go up in price.
The W123 is similar, worth about what I paid for it 5 years ago, despite certain experts saying they will skyrocket in value.
Both of these cars are not mint, but good clean, useable cars and I paid about the going rate when I bought them. There are other classic cars like Triumph Dolomites or other FWD Triumphs that don't seem to go up in price.
Stick Legs said:
Scenario 1:
This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
I’d guess that there are a lot more hot air balloons around now than at any point in history. Steam cars were never much of a thing, but traction engines / steam rollers will set you back a serious amount of cash and there are very few people left who can remember them as an everyday sight on the roads. And you can’t use a traction engine for very much, in the same way as you can an old car. This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
Your general points might be correct, but IMO you’re overly pessimistic. Hope so anyway.
Yertis said:
I’d guess that there are a lot more hot air balloons around now than at any point in history. Steam cars were never much of a thing, but traction engines / steam rollers will set you back a serious amount of cash and there are very few people left who can remember them as an everyday sight on the roads. And you can’t use a traction engine for very much, in the same way as you can an old car.
Your general points might be correct, but IMO you’re overly pessimistic. Hope so anyway.
I agree, there is a lot of people at the moment thinking that petrol will cease to be made soon so we will all have to jump into an EV and our classics and anything petrol will be worthless.Your general points might be correct, but IMO you’re overly pessimistic. Hope so anyway.
Utter tripe in my opinion and I don't like the idea of anything classic being turned into an EV.
The government and certain motoring programs are trying to condition all of us at the moment that anything petrol or diesel is poison and we should all place ourselves in huge debt to be driving an EV and scrap our beloved cars, an EV only makes sense for business users at the moment and by the time it's affordable for the masses it will definitely be more to run as the equivalent petrol car.
I am not anti EV and we have looked several times at looking running our daily cars all electric, it's a mile of being financially affordable.
Based on the above affordability, petrol in my opinion will never be phased out in my lifetime (I am 58) or my son's lifetime (19 and 24) therefore securing the future of classic cars.
Stick Legs said:
Scenario 1:
This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
I think that sums things up pretty nicely, especially your Scenarion 2! I wonder how long it will be before values of MK1/2 Escorts drop once current 60-somethings get older? This is a massive asset bubble (see also watches etc) and once interest rates & inflation get rebalanced to something normal then the classic car bubble will burst & the market will contract hard.
Blue chip cars won’t be as affected but anything mass produced or not classically pretty will fall hardest.
Scenario 2:
As older people die off the relevance of a chrome bumper 911 or E-Type wanes.
Values soften slowly as cars like the F355 or Audi R8 climb. Ultimately people want to buy their childhood dream car.
Scenario 3:
The public attitude, manufacturers ability to supply parts for, the government’s tolerance of ICE cars erodes faster than expected and using a classic car becomes akin to using a steam car, or a hot air baloon;
The preserve of either the fantastically wealthy or the fantastically obsessed.
99.9% of people won’t care where they all went.
Car enthusiasts will be all driving EV’s or EV converted classics.
Goodwood becomes Longleat for cars.
In every one of these scenarios the price falls.
I genuinely believe it’s a when-not-if situation.
I can't see Scenarion 3 happening too soon though unless it is Government driven - hope not anyway!
I think there is a definite trend for the older cars to become static in value, most 50's cars in particular now seem to be fairly cheap and as inflation takes hold and they stay the same, they will in effect depreciate.
It also appears that cars from the eighties are generally rising. This must be the nostalgia effect as those of a certain age are starting to find the spare cash to buy the cars from their rose tinted past.
The inevitable trend will be cars from the 60's then the 70's start to falter in value.
Certain Cars will always buck this trend though, E Type's, early 911's, Escorts being prime examples.
As for the doom mongers... I hope they are wrong and genuinely believe they are. But I'm not relying on the two cars in my garage for my pension! (one from the 60's, one from the 70's)
It also appears that cars from the eighties are generally rising. This must be the nostalgia effect as those of a certain age are starting to find the spare cash to buy the cars from their rose tinted past.
The inevitable trend will be cars from the 60's then the 70's start to falter in value.
Certain Cars will always buck this trend though, E Type's, early 911's, Escorts being prime examples.
As for the doom mongers... I hope they are wrong and genuinely believe they are. But I'm not relying on the two cars in my garage for my pension! (one from the 60's, one from the 70's)
Let us also consider the position of new classics. I mean the Bentley's from VW, the Aston Martin DB4, and of course the new proliferation of C-types, D-types. E-types and XKSS churned out by Jaguar. Ad let us consider one particular car as an example of the market."Chassis 0" lightweight E-type was the seventh of six cars that Jaguar built, claiming that this extra car was to be kept as part of the historic collection.
Najeeb Khan was a fraudster who had amassed a collection of over 200 classics, and although being a new kid on the block had persuaded Jaguar to let him buy one each of the E-types, D-type and XKSS. The whole collection was confiscated by the IRS and sold off to defray debts.
The E-type was sold to Khan by Jaguar for $1.5 million and sold on at auction for $1.25 million, and sadly a year later the purchaser died and it was once again auctioned off, this time fetching $1.05 or £750,000. This is not far off being correct for a well-built replica, but consider that since the day it was first sold by Jaguar it has lost about £1,500 per week in value. Moreover, it cannot be road registered in the majority of the world, the UK excepted if you get it through the IVA. Wither (sic) the value all of these "investments" in the future?
On a personal note, I turned down £250,000 for my E-type in 2017; the car was not for sale then nor now where the value has fallen to about £175,000 on a good day. Happily the XKSS seems at least stable. Yet a 1965 4.2 roadster E-type sold recently for over £200,000. And one to watch this month is here. Estimated at up to £400,000.
https://www.bonhams.com/auctions/27328/lot/34/
Najeeb Khan was a fraudster who had amassed a collection of over 200 classics, and although being a new kid on the block had persuaded Jaguar to let him buy one each of the E-types, D-type and XKSS. The whole collection was confiscated by the IRS and sold off to defray debts.
The E-type was sold to Khan by Jaguar for $1.5 million and sold on at auction for $1.25 million, and sadly a year later the purchaser died and it was once again auctioned off, this time fetching $1.05 or £750,000. This is not far off being correct for a well-built replica, but consider that since the day it was first sold by Jaguar it has lost about £1,500 per week in value. Moreover, it cannot be road registered in the majority of the world, the UK excepted if you get it through the IVA. Wither (sic) the value all of these "investments" in the future?
On a personal note, I turned down £250,000 for my E-type in 2017; the car was not for sale then nor now where the value has fallen to about £175,000 on a good day. Happily the XKSS seems at least stable. Yet a 1965 4.2 roadster E-type sold recently for over £200,000. And one to watch this month is here. Estimated at up to £400,000.
https://www.bonhams.com/auctions/27328/lot/34/
Edited by lowdrag on Monday 10th January 15:35
It's interesting to consider.
As others have said some cars will always be desirable and have value, others will fall away, some may not appreciate.
Some of my possibly ill-informed observations: Austin Sevens are still popular. Morris Minors have a large following amongst younger enthusiasts. So there are a number of cars that will survive down the generations. The really big value stuff is more prone to a crash in values.
Of my own cars: 205 gti has risen in value hugely, probably will continue to be worth something. Mk2 Escort, risen again but may fall. Peugeot 104 and Citroen LNA, cheap and not rising in value as too obscure now unless for a niche enthusiast.
As others have said some cars will always be desirable and have value, others will fall away, some may not appreciate.
Some of my possibly ill-informed observations: Austin Sevens are still popular. Morris Minors have a large following amongst younger enthusiasts. So there are a number of cars that will survive down the generations. The really big value stuff is more prone to a crash in values.
Of my own cars: 205 gti has risen in value hugely, probably will continue to be worth something. Mk2 Escort, risen again but may fall. Peugeot 104 and Citroen LNA, cheap and not rising in value as too obscure now unless for a niche enthusiast.
sjabrown said:
Some of my possibly ill-informed observations: Austin Sevens are still popular. Morris Minors have a large following amongst younger enthusiasts....
I own examples of both of those, the joy being that they aren't really worth much to start with so they don't have far to fall.You could get one of each and still have change from £10,000.
I used to have a Traction Avant. After a few years of motoring with it, I sold it for £750 less than I paid for it. In the grand scheme of things, that was a small amount of money to "loose" on it and turning a profit was never my intention, but ultimately a car is only worth what someone is willing to pay for it. Does that mean my TA depreciated, or does it mean I paid £750 too much for it?
Either way, there are certain classics that are "less common" than others, as such working out actual "value" is pretty much a case of blindfolding yourself, pinning the tail on the donkey and then seeing if anybody else agrees with you.
Either way, there are certain classics that are "less common" than others, as such working out actual "value" is pretty much a case of blindfolding yourself, pinning the tail on the donkey and then seeing if anybody else agrees with you.
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