Is the classic car market dead? No chance

Paul McCartney. Woody Allen. Roger Federer.

All three superstars have been a victim of their own success.

Paul McCartney - who can still write a good tune - will never write songs that can compare with his Beatles output. Woody Allen will never better Annie Hall, try as he might. And Roger Federer is thought to be "past it" by some, despite still being number two in the world.

It's been the same with the classic car market in 2014.

Some commentators are already writing their obituaries of the sector.

Why so?

Because the classic car market has undergone a significant slowdown in 2014 compared with the previous year.

But how could it be otherwise?

In 2013, the value of classic cars on the respected HAGI index grew by 46.7%.

Ferrari was up 62.1%.

Incredible growth.

So what has the classic car market's difficult year amounted to?

Only growth of 15.3%, according to HAGI.

Only 15.3%? How does that compare with your savings account? Or the flatlining FTSE100 this year? Or even the falling price of gold?

Yes, many investors would gladly take a drop in returns to 15.3%.

1962 Ferrari 250 GTO Berlinetta
The $38.1m auction record set by this 1962 Ferrari 250 GTO Berlinetta was a rare moment of high drama in 2014, as stability took hold

But with the market slowing down, isn't there a danger the returns will grind to a halt altogether, you ask?

I don't see it with classic cars. On the contrary, I view 2014's more modest figures as a sign of good health.

46.7% gains a year are not sustainable long-term.

But growth of 15.3% is. In fact, it's a sign of a maturing market, rather than a dwindling one.

And remember, that that 46.7% figure for 2013 was achieved with the help of several once-in-a-generation sales, including:

·         The $52m sale of a 1963 Ferrari 250 GTO - a world record for any car.

·         A 1954 Mercedes W196 driven by Juan Manuel Fangio that made $29.6m, becoming the most valuable car ever sold at auction.

·         The $27.5m auction sale of a Ferrari 275 NART Spider - a record for a road car.

And although a 1962 Ferrari 250 GTO Berlinetta has set a new auction record at $38.1m this year, 2014 has been a less exciting 12 months.

But less exciting is fine for the thousands of classic car owners who are watching their vehicles rise in value year on year.

The classic car sector is not going the same way as the wine market a few years ago. Boosted by a sudden influx of Asian buyers, prices for Bordeaux soared, only to come crashing down in 2011 when those same buyers pulled out.

There has been no such influx with classic cars. Yes, increasing numbers of buyers are entering the sector - both collectors and investors - but it's a steady progression.

They're drawn by the wonder of owning vintage motors, the excitement of making a few bob - or both.

I realise I've been talking in generalities here, so I'll end with a few stats.

According to HAGI, this year Ferrari classics are up 18.1%. Porsches are up 23.8%, while Mercedes-Benz vehicles are up 9.1%.

All are nice, solid figures.

Thinking about entering the classic car market?

Talk to us first. Our unique book of contacts enables us to source vehicles to order.

Call +44 (0)117 933 9500 or email info@paulfrasercollectibles.com

Thanks for reading,

Paul


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