Do NOT Fall For The Classic Car INVESTMENT Fallacy!
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- เผยแพร่เมื่อ 26 ก.ย. 2024
- I regularly see adverts for obsolete 10-15 year old cars with claims that they are only going up in value... upcoming classics and that they are a great investment. This is completely wrong. Long term, apart from the very top end, classic cars are not a good way to invest your money and prices can only fall.
My Porsche 911 appreciated 10k EUR in last 2 years, while generating 16k in maintenance bills. Looking at prices of some Ferraris that require 8k maintenance job every 5 years and their age, total sum of maintenance is about 2x the asking price of the car. One need to be very lucky or terrible at math to do this. I just buy for enjoyment.
Jack - I'm still waiting for the price of a good Ferrari 456 Auto to fall so that my wife could buy it instead of her dream Range Rover Sport 5.0. I seriously have considered a Lancia Thema 8.32 before but the Mrs hates manual gearboxes, so that's not going to happen - lol. You are welcome in my viewing list always, but I'll not ever have an EV, hybrid maybe.
You probably have this problem because you don't drive it ... I've got a BMW 650i 2006 with 196k and drives like the day I collected it. .... and a Bentley Supersport Convertible I've had for 4 years and I've hardly spent any money on it. The trick? Drive your cars and change the oil very regularly!
@@tonyfischer-ev9ij The opposite, I drive it a lot :) Those were wear items or items that expire with time (gaskets, hoses...). Things I would call a good maintenance and some preventative jobs (injectors cleaning). It never broke down nor generated any issue on its own. But it is a complex old machine that requires a lot of labour to get to things (engine out) and parts are not exactly cheap. I also have BMW Z4 I personally took over 300k km, it too generated some serious bills over time and depreciated badly on top of that. As I say, wonderful hobby, but hardly a smart investment for most. I am happy you managed to enjoy some serious machines with modest bills, keep it up.
Brilliantly put 👍👌
That's why many classic cars in "investment" collections are not in a drivable condition
If you can buy a car that you’ve always wanted and enjoy driving it, you shouldn’t expect to make a profit. If you get out of it, what you put in, you’ve hit the jackpot in my opinion.
Happy classic motoring 🚙 💨
100%
Yes I consider that owning and enjoying a car and losing money on it is still worth it, as you get to experience that car and that is worth the cost to me. Same goes for many expensive hobbies.
If you’re classic car makes you smile every time you drive it yeah I’d say you got your moneys worth no amount of return on an investment can put that same smile on your face I never view cars is a way to make money unless it’s like a McLaren F1 or something super rare and expensive like that but even then I still would enjoy driving a McLaren F1 more than I would selling it and collecting the money it would make them besides a proper car enthusiast to looks at cars as a hobby that is something to have fun with not an investment now on the flipside a McLaren F1 would provide enough money to buy other enthusiast cars to have fun with so I guess there’s a gray area there were also the only way you can daily drive and properly McLaren F1 is if you’re a Billionaire like Elon Musk because a tuneup on that car alone cost about five grand and then tires that’s probably gonna be another 5 to 10 grand so you really have to be mega wealthy to enjoy that car any length of time I’d probably rather buy a Porsche 911 Turbo or a Porsche GT3 or something like that like a 996 generation early 2000s and also not go bankrupt during the Sunday drive
Yes!
Totally agree with your logic Jack. Buy cars to enjoy and if they appreciate in value, that’s a bonus.
You’ve raised some absolutely great points. As an owner of a 1983 Mercedes, I can also say that the number of mechanics who can competently work on my car is also dwindling as they retire which will makes things quite challenging. On the other hand if inflation keeps soaring classic cars might be seen as some kind of inflation hedge. We are going through some very volatile times that seem to defy all predictions.
I have a 1989 560 SL in Las Vegas and have one of two good auto repair shops who can work on it and repair with OEM parts. I enjoy this car daily. We sure get a lot of compliments, don’t we? 👍🏻😊
@@mikemccormick8115 Honestly I think the 80’s Mercedes are probably the best group of cars ever made. And massive respect to you for daily driving a 560SL. Hopefully kids will see it and understand what a real car should be.
So true! Mechanics and parts availability are challenges now. What about in 10 to 20 years from now? Good luck getting odd size tires, etc.
You should be working on an 83 Mercedes yourself.
Retro Fords for the win they won’t go down, silly thing to say after looking back at historical prices
All good points. Another factor regarding the “Youth interest” is that they didn’t grow up “Wrenching” on the “Affordable cars” available to them at driving age like we did (Gen X). I asked my son (Gen Z) recently, “When was the last time you were late because your car wouldn’t start?” His answer, “Never.” “Besides if it does I have you to fix it.” 🤦🏻
I find this particularly sad... I would be considered Millennial and I still grown-up interested in cars and working on them etc. I already struggled to get insurance and car, but because I was brought-up with belief that this is required in life I persevered, paid thousands for insurance and I got my car and experienced amazing things and freedoms. But I am looking at kids now Gen-Z, Gen-Y ... they are not interested in the cars because on one hand it is not cool anymore, but on other hand they simply have no realistic chance of driving them before they are 30. Insurance is so ridiculously expensive now that nobody is insuring anything at 17 and driving itself isn't even enjoyable... it is just traffic and speed traps everywhere... Even if you get to drive the car, then there is nowhere to go, all parking removed, LTNs everywhere, so what is the point of driving 10 miles, of then you have to park 10 miles away from where you wanted to go and walking back... may as well just get an uber in the first place... honestly more pain than it is worth... and if people didn't become interested into something by the time they are 30, then they won't get interested into it.
This happens to every generation. Are boomers interested in 1940s and earlier cars?
This happens to every generation. Are boomers interested in 1940s and earlier cars?
This has made perfect sense to me and I have been thinking the same for a long time👍
I'd have punched the cheeky spoilt tw*t in the face, really f*cking hard if he'd said that to me!
I bought my 93 RX-7 in 2005 or so for 6000 US dollars. It is now worth nearly ten times that. Sure I put about $30K into it over the years, but I've also been enjoying it and driving the sht out of it for almost 20 years now. It was never an investment though, but more of a dream car for me.
Speaking of which, love your channel and I'm sure a lot of us would love more 90's Japanese car content. That really was a golden age for Japanese cars...RX-7, 300ZX, NSX, MR2/Supra, 3000GT, etc.
Blown apex seals?
I have a 95 Rx7 which has been for sale 4 years online with no offers, it’s runs and drives and has had 60k spent on it and is advertised at 16k
@@robjonson629 Please link me to the for sale page. I'm interested.
I respect them. One day I will test drive a rotory engined car.
God speed and enjoy your car man!!!
People confuses investing with speculating
Indeed. However unless you are buying blue chip investments most investing is more speculation than anything else.
@@bmstylee No if you just buy indexes or treasuries, or you just think a company is good and you put your money on it
I saw photos from some Stag owners club meeting the other month.
Most of the owners seemed well into retirement. You don't see so many people in their 20s & 30s wanting one.
I think many (but not all) just don't have the same connection to cars as we did as you can talk to the world via a laptop. We had to drive to a small part of the world for socialising.
Totally agree with your outlook, Jack. It's the right time of our own lives to enjoy the cars that bring us joy, but to properly enjoy them as they were intended, not for financial reasons.
Sensible analysis; fully agree. One thing you didn't mention is that in the future the number of mechanics and specialists will decrease with consequent increased difficulty in finding them and higher costs. A bit like finding a mechanical clock repairer today.
Plus the ever more complicated nature of cars and their electronics. It is already difficult to find electronics for some cars from the 90's, as these specialized components for a certain car, or set of cars was only made for a number of years. I remember reading somewhere that even BMW was desperately looking for old ECU components to fix M1 cars.
@@heiner71 from my understanding the BMW M1 has a quite rare Magneti Marelli ignition system, in part because BMW worked with several Italian companies when building that car and Bosch weren't quite ready with their own system. At least the circuit board layout for the ignition is available online, not sure about the components. The M1 was from 1978 and things haven't got much easier. Servicing the McLaren' F1 supercar needs a specific Compaq laptop to work with an interface card from the 1990s - at least that was true a few years ago, maybe McLaren have a new system since then.
@peyiots This is one thing that bugs me about those who choose to convert classics to electric power. They're effectively hastening the demise of the infrastructure for the rest of us.
Most people I know who own classic vehicles do most of the work themselves. I suppose that gets more difficult with something as complex as a Cosworth but is not a problem with 1970s and older stuff.
@@Phiyedough Except for BDA, Lotus engines and the like ;-)
Covid had a huge affect on used yacht prices, they went up a good 30%. I forecast that when the reality of the costs of ownership versus the amount of use, prices will drop dramatically
I think the same with motor homes
It’s already happening with holiday homes and cottages, minus 20pct in past year for my area.
That happened to pretty much all of those "grown man toys" you can spend time with alone like bicycles to cameras, vintage audio equipment, motorbikes, cars, watches, home electronics, etc. even houses. Some people lost their jobs during covid, but most, especially middle aged to older folks with higher income just sat at home while money piled up in their bank accounts.
Here in germany classic car prices first took a significant hit in 2020 when people thought we would slide in a massive economic collapse, people stopped buying and alot of these "my W124 convertible is an investment"-dads got cold feet and wanted to sell. I was tempted to buy a neglected 924 with a friend which suddenly started to pop up left and right for 500-800€ but didn't.
As soon as it became clear that a global virus epidemic was just boring af and wouldn't lead to total collaps as all of those zombie movies had told us prices started to climb both due to an increase in demand but also people who were primarily interested in investing their money rather than the object itself.
The world sliding into recession and Boomers dying will kill the ridiculous classic car market.
@@truantray What evidence do you have that 'boomers' are responsible for buying all the classic cars?
Really enjoyed this, the ‘generational’ idea is very interesting and thought provoking. I agree that younger people overall are probably less interested in cars compared to say 20-30 years ago. However if my local McDonalds, Gregs, Petrol Station, KFC and town centre are anything to go by, cars still have a massive appeal amongst a hardcore of 18-25 year olds. Personally I think there’s going to be a section of the older generation of petrolhead 40/50 something drivers like me who will never buy into electric no matter how hard the government push it. Therefore from now on in I believe the best and final generations of pure petrol performance cars will become more and more highly sought after as time goes on, even though the government will make them more and more expensive to run and will tax their owners to death.
Yup, agree. I'll personally never buy an EV, on principle. The more governments force feed stuff to people, the more sure you can be that it is 100% wrong. Time will tell.
I suspect there may come a time when government will simply ban ICE cars from public roads completely. This will happen if and once the majority of cars in use are EVs.
There is a lot of very reasonable and wise information in this video. Thank you for producing it.
Jack, a very well presented and excellent 'lecture' on the state of the classic car market. What you say makes alot of common sense and is very good advice for anyone interested in classic cars, young or old. No one can really predict what will happen but the factors you mention are all very relevant. Thank you for posting great TH-cam uploads.
Very sound advice and I agree. I have been a long term collector, but, I have been lucky enough to afford the cars that I wanted at the time to drive. I have watched the prices of these cars over the years since the early 1970's go up and down like yoyo's. To me it doesn't matter because they are cars that I really enjoy owning and still driving and never intend to part with them.
The other thing to bare in mind is the ever increasing cost of maintenance and repairs, if you add in the cost of this upkeep over the years any real net gain may not be as much as you think.
Cars I have, 246 Dino Spyder, 365GT 2+2, 308GT4, 308GTS (early fiberglass body car. Yes I have a Peugeot 205GTi, Elan Sprint DHC, Esprit S2, XJS V12 Convertible with some TWR mods. I bought these cars all roughly under a year or two old and saved a lot of money on them at the time. The Ferrari's I bought during and around the 70's oil crisis when no one wanted gas guzzlers. So I am the second owner of all of them. I have all of the bills and dealer stamps since they were new, and let me assure you the cost of keeping them all in drivable key start condition is not cheap and not a matter to overlook in your selection. These are some of the cars that appealed to me no matter what others thought or whether they would increase in price or not. I still have that philosophy.
You're not Harry Metcalf's long-lost twin brother, are you? ;-)
Also when you take into account inflation any perceived profit is lower.
Great collection but which of those cars is your favourite driving car.
@@oldbasted Charles I love driving all of them for different reasons. The 246 when I was younger, then I grew to love the 308GT4, I felt it held the road and handled better than even the 308GTB, but does not have the appearance and charisma of the others. The GTB with its plastic body has a sort of boominess to it which can be distracting. The Elan sprint is fabulous but at my height it's hard to get in and out of. The 205GTi is just the bees knees to me in nearly everyway particularly as a daily driver. As I have aged the XJS is just fabulous, smooth and quiet and comfortable and with the TWR steering and suspension changes it handles and holds the road second to none. I didn't have any engine mods.
Just out of curiosity, are you aware you could have conveyed the same message without writing down a list of things you own? It really doesn't change anything apart from the impression you make (not in a good way).
Unfortunately the first scrappage scheme killed alot of 80's and mostly 90's future classics off such as Vauxhall Calibras etc. If your lucky to find a nice Nova GSi it's well over 10 grand.
I imported two lhd GSIs for 11k euros and stored them and made money… so yes you can make money from classics
I love my my BMW 116 diesel( quite pokey) and enjoying the average mpg of 50 mpg. Being as I'm days away from being 60, I'm giving a lot of thought to getting a Toyota MR2. I know I'm getting close to the last car I will be able to drive- my age, cars available, combustible fuel
being phased out by 2030/2035, 15 minute cities and all that.
I'm getting that MR2. And it will be enjoyed.
Cheers, Jeff. Cool vid.
Lucky you. I'm still in my early 30s and absolute love my 3 cars. If someone from the future would come and tell me that I would drive them and only them until I retire, I would be a very happy man. Sadly, I probably have less than 10 more years with them and the second half of my life will likely be without ICE cars altogether. Makes me sad in advance. I wish I could drive them until my 60s... but won't happen, probably.
3 years ago I was considering buying a 355 manual, only for fun. They were around 65k in Europe. I did not. They are now between 110 and 130k. Within the same period I lost 5% with a 'safe' and not funny at all financial investment... Trees don't grow up to the sky but they are currently still growing....
Great video. I’m no longer a classic car enthusiast but I do love a classic motorcycle and can see exactly the same generational effect in that market. I grew up with (and still have) 1950’s to early-70’s British bikes which are now quite rapidly declining in value while 1970’s and 1980’s Japanese bike prices are rising as the following generation washes through. Only a handful of years ago the majority of stalls at bike auto-jumbles were British parts, now they are in the minority. The generational effect is powerful and plays in both supply (“without reserve from deceased estate”) and demand.
You can see the generational thing very clearly with motorcycle collecting. Up to about 10 years ago the hot properties were old British bikes, now it's more recent Italians and Japanese bikes of the 80/90s.
You’re correct but the demand is by us 80’s kids who are now in our 40’s. So there’s a good 20 year window of demand yet. 👍🏻
The prices of 1960’s Shelby Mustangs began wildly climbing in the 1980’s. I remember one car mechanic who had bought one and sent it to a shop for restoration, then the economy started weakening in the late 80’s and the cost of restoration was going to equal or exceed the car’s value once finished. I didn’t find out if it did actually get restored as I stopped delivering auto parts to deliver pizza.
Great video Jack. No matter how much you tell some people though they just can't see that you won't even be able to give most of these cars away in 10-20 years time. Buy what you love and enjoy it as much as you can. Like you say the rarest and most special cars will always be highly valuable but more as art pieces rather than vehicles.
Brilliant vid Jack... I agree with most of what you've said and as you mentioned, it's the relatively mundane classics we're talking about here, not the exotica. In terms of mundane stuff, the bargain classic at the moment has to be the E46. I have an immaculate low mileage manual 2003 325i Sport which is worth very little for what is a phenomenal car. I'm watching what happens to these with interest as they could well be the herald for the downturn. Having said that, I'm an A-Level teacher in a secondary school and you'd be surprised how many kids are actually very interested in car ownership... not only that but they actually lust after cars like the E46. Literally every day I'm being asked how much it would be to insure the E46... so both of us may well be wrong here. The overriding message though is don't plan your retirement around the increasing value of a Mk2 RS2000.
As a senior advisor to a collectable cars fund in my day job, I cannot but only agree with you, Jack 👍
I think you are pretty much spot on with your assessment, especially when you consider that there are ongoing costs for things like insurance, storage, etc. And, the components of an automobile will deteriorate with time even if it is not driven.
I own a very desirable motorcycle (a '94 CBR 900RR) and I definitely agree with what he said. Right now, collectors are paying high dollar for a prestine one. But when those people that remember seeing one for the first time in a magazine are 60 themselves, they won't be interested in buying one anymore; and the new generation won't remember the first time they seen one when it first came out. Sort of like a dead language that noone alive ever knew-they won't know it, they won't miss it, and so how could they appreciate it. As I am writing this, I guess I could look at the top bike of the mid 80's or an amazing bike from the 70's and see what their values are. As the fans age or lose interest, the demand decreases.
Well said, and a fine display of humility to boot! I have two comments - first, I have owned a 1981 Porsche 930 for over 28 years…I love the car, and often walk through the garage just to look at it. However, it is apparent to me that younger generations are unimpressed…this is not the car they fantasize about owning (as I did in my youth). So to your point, the future value of the car is far from guaranteed. Second, while I am under no illusions that the current stratospheric value of these cars will continue, I do find it most useful when justifying to my wife the always-growing and numbingly costly pile of maintenance receipts that I have collected over the years!!
Ha you must be joking. That's a dream car for anyone 😉
@@robc8892 Unfortunately not. I have the perfect story relevant to this, with a 930 no less. Last year I was at a local car show and a gentleman with his small son and myself were admiring a striking blue 930 outside. The kid, frustrated, said to his dad "This is NOTHING. There is a Performante over there!!" And dragged his dad away. Funnier still, that Performante I had already walked past and gave it no second looks.
I think your right. The values of some of these classic cars cannot continue to rise. Fast Fords are a perfect example. The bubble will burst eventually. It’s just a matter of when. I also agree with the generation theory as most younger people are just not interested in them. You should buy a classic car with your heart and enjoy them whilst you still can. It’s the investors that are ruining it for the genuine enthusiasts.
Similar thing happened in the early 90s, the cost of classic cars went through the roof only to crash a couple of years later. I remember a classic car showroom in Portsmouth that had a Stag for £30k and a Healey 3000 for £75k which were hugely inflated at the time
*You're (an abbreviation of you are.)
It already has.
Excellent points Jack. There is also the inflation aspect of restoring classic cars. As it becomes more expensive to restore a car, labour, chroming, painting etc the value of a good tidy or original example increases by default. The generation aspect is correct but for really unique or special cars this doesn't apply hence 1960's Jaguar E Type or 1950's Facel Vega.
Hi Jack, we’ve spoken before regarding my 308 GT4, which was a progression from 3 Esprits, 3 RS Turbos, 2 XR2’s.. etc. The GT4 was bought cheap but turned quickly into a full restoration. Although still miles off and thousands and thousands have been spent, 15 years in, I hope I can finally finish it at some point an drive it with petrol available. My sister 5 years younger has little interest in it, and we quickly realised a long time ago, our car choices are so different. So yes, totally agree with your video. I eventually sold a S1 RS Turbo for £1300 with an MOT and rebuilt gearbox, now what would it be worth?!
That’s nothing, Prince Andrew paid £12m for his escort!
😂😂😂😂😂😂
Ha ha, that’s brilliant 😂😂😂
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😂😂😂😂
One point not mentioned is appreciation on cars is not subject to cgt.
Once the masses follow a trend and prices start rising, it is self sustaining. That is until such time market sentiment changes in a wholesale way (usually from a better alternative coming to the fore)
Jack great thought provoking stuff. Just showed it to my 15 and 13 year old (boy and girl) - they smiled and both quickly agreed that “Jack does not get our generation at all…….” I am not sure I do either but they can both be at home with environmental issues as well as the internal combustion engine and the character and fun of a classic from a various decades - they are also not alone as I have noticed how their friends both younger and older react, rationalise and get excited.
I think it is complex, with multiple layers, but feel your thesis is a great starter for a wide debate where views will equally be very diverse. Thanks again.
Your so right in everything you say , i've just bought a classic Lambretta TV175 that needs restoration but because i love the styiling and looks i will spend money on the restoration . I don't care what its worth when i'm finished its a project for me and my passion. My job is painting and repairing cars day to day and also work on classsic cars. I have a savvy customer who deals in classic cars and has sold most off the cars he owns . Its only metal too him and money .
I have a career in fine art valuation and all I can say is that there have been people collecting fine art for centuries. I don't see that stopping any time soon. I think with cars it will be the more exotic ones, the convertibles and coupes with the more powerful engines continuing to appreciate. They won't be driven much. The more ordinary models will eventually decrease in value.
I think you are completely right and for the right reasons. Check out the classic motorcycle world for the same effect somewhat magnified - the boom in post-war British bikes looks to be over, they are not really desirable to people in their 50's and 60's, they want early Japanese bikes now so both the numbers for sale are up and the prices they are making have, I think, topped out and might even be coming down due to lack of demand (I saw a Vincent Rapide sell for £25k the other week. Big money but I know someone who paid the same amount for one, in very similar condition, more than 10 years ago and thought that was a bargain....🤔)
I used to know a pre-war vintage bike specialist and he had a pretty good business employing a couple of old fella's (like himself) selling bikes and parts all over the country (and the world) but the last time I saw him (probably 15 years ago) he was very negative about his business. "No one wants pre-war bikes any more. All I get are phone calls from the children of the people I have been selling bikes to wanting to sell them back to me now" He closed not many years later. But who wants to spend big money on a 1930's Scott Flying Squirrel or BSA J12 now?
100% agree, all the hype now for 1980s cars and bikes, are because people who were teenagers in the 1980s are now late 40s and mid 50s. Once that generation hits their 70s who is going to want a 1985 escort xr3i.
Look at the price of Yamaha FS1Es. All the 16 year olds who wanted one are now OAPs.
Totally agree with your point of view but I guess one additional factor was that at some point, many of the 70-80-90's cars went dirt cheap, which doesn't seem to be the case with current aging "cool cars" (like 2000-2010's "interesting" cars are not devaluating as much). I guess it has to do with the fact that there's less and less brand new "cool cars" sold.
I believe you are absolutely right. I've been saying the same thing for a few years now. It's not going to happen overnight, but it will happen.
I remember that video from 6 years ago. I agree with your thoughts though, as it is simply the nostalgia that put's a price on it. When those people are gone, who will remember them and then the values depreciates. Cool video.
I bought a Ferrari 328GTS in 2000 for £33k. I sold it in 2006 for £25k. The car was £39k new in 1987 and during the late 80s car boom it sold for £110K. My guess is it's worth £65k now. Given the running costs it isn't really an investment but obviously fun to own. Prices have moved around over the decades a lot so who knows. Something else that may affect future value is the massive reductions in speed limits we are seeing with tight enforcement. It is taking the pleasure out of sports cars though won't affect people who buy cars and put them into storage (a sin in my book). Totally agree with your points about generational effects.
Interesting video. I am one of the many people who have been priced out of the classic car market so it would be good news for me if prices drop. The most recent classic I bought was a 1976 Toyota Hiace coachbuilt camper which cost me £310 with a full MoT. I think that was in 2008. Previous to that I had an MGBGT and a Riley 1.5 each for £1000.
The fast Ford prices are baffling. I wonder if the 600k Cosworth owner will regret the purchase at some point.
Without doubt. A real classic will be beautiful to look at and widely admired when seen parked. That Ford is, let's be honest, an ugly car and I bet almost nobody other than 40 years+ petrol heads would give it a second glance. The performance is what made it cool and these days even that is mediocre by today's standards.
I started using a classic as a daily driver and now I compare to owning a "new" car instead. It's not depreciating anymore, and I drive a much more fun car every day. The owning costs and maintenance is higher, but most of that I would spend on a second car as a hobby anyway.
Same, it amazes me how many are terrified of maintenance costs but oblivious to finance costs and depreciation losses that are far higher
@@RobinCapper After a year with a 20-years-old car and having to visit a shop last minute before a longer trip because something's started sounding funny I kind of get it. Depreciation is the cost of peace of mind and many people are willing to buy it when they have the means, otherwise we wouldn't have any classic cars to begin with ;)
Not sure if any cars are depreciating that much these days. New cars are so expensive that they are becoming out of reach for a lot of people so there is high demand for good used ones. Also cars made in the last 10 years or so are not as reliable because they are using inferior materials like plastic manifolds and thermostat housings.
I've an old Tran Am but I'd never let my daughter use it.
Modern cars are biblically much safer.
If you are not being affected by depreciation, then the average cost is lower than a generic VW Golf. The depreciation on Golfs has been crazy because they are commuter cars. They are everywhere, undesirable, and once they get dumped on the market, it's hard to convince anyone to buy one.
I think you have got it more or less right this time. Whilst insurance companies (UK) generally consider a 20 year old car as a classic many may not agree with that. People may say 'ah that's their excuse for raising the price of cover'. People may be right and there is a debate as to what can be called a classic (with regard to more 'modern ' cars) but I suspect that debate will just rumble on. Few of us will be able to buy a rare vintage Bentley for example so yes life is too short so go and buy a car you will enjoy as you say Jack. Thank you Jack for a very interesting video.👍👍
I think this time around you might be right - the Classic Car Market bubble is going to burst at some point. I totally get the generational shift, those that grew up with Morris 8's etc are not looking to buy a Cosworth and those looking for a Cosworth are not interested in a Morris 8. The same is going to happen to the fast Fords, those that grew up with them will grow older and the next generation will have little association with a Cosworth Escort. A few years ago I purchased a Continental R, not as an investment, more because I really thought they were a piece of motoring history. I also bought a Mini Cooper, not because they are great to drive (which they seldom are by the way) but more because it's another piece of motoring history. Mine are not investments and doubtless an Aston Martin DB6 will always sell better but now in my late 60's I just want to enjoy cleaning and polishing my classics. They are street art to me...
nice lineup of cars you have! But I had to intervene, the original Mini Cooper is an absolute blast to drive!
@Number27 Excellent forecast. Just found your channel. I am a car lover and old. I’m in the U.S. I call it the Model T effect. Ford Model T’s were very collectable in the 1950’s and 1960’s by the folks that grew up with them. Sometime later, not sure when, the prices tanked. Because of your observation, the “generational” effect. And yes, the true rare and classic cars will be investments. Just watched the Mecum auction in Kissimmee, Florida and the Barrett-Jackson. The market is possibly different here as a casual observer prices seem at least stable for the average stuff. It will crack though, sooner or later.
I am old enough to remember the arse falling out of the classic car market a couple of times. £100k Jags in the 80's worth £20k later and many others. A Ford Sierra is a Ford Sierra which ever way you look at it. I owned many "fast" Fords years back. They were fun at the time as I was in my 20's early 30's but compared to modern cars they are rubbish. poorly made cheap cars. How they can have improved with age is beyond me?
Thanks for this. It's true. Some of us remember the boom and bust of classics between 89 and 90. Back then it was E types and Cooper S. Took over 20 years to recover. These are good lessons for hype and life generally. It'll be recent 911s and rolex watches next
Rolex watch prices have already dropped significantly from the peak COVID bubble
I remember seeing a restored Minor Traveller in (IIRC) Practical Classics for £9,995. I doubt it would be worth that today.
To be fair, there are some very good car investments but you have to choose very carefully. Plus you get to enjoy the investment as a car too rather than it just being a number on a balance sheet. I do remember one of your videos a few years ago that said car prices were going to fall……but they didn’t!
I remember prices pumping beyond all reason in the late 80's. Then prices crashed in the early 90's & literally took 2 decades to recover..
Indeed. I've always bought cars that I either liked, or fulfiiled a specfic daily need. As I recall from the the late 1980's, 'classic car' prices became very inflated, words like 'investment' and 'patina' were all the rage. Jaguar Mk2's, the archetypal bank robber's getaway car, fetched well over £20,000. Not the 2.4 versions, or the Daimler 2.5 V8's of course, they were the unloveds. Had to be 3.4, or better, the 3.8.
Then the recession of 91/92 arrived. Couple of years on from the £20,000 + highs, you could buy a really nice Mk2 for £7,000.
I have a 1993 W124 300E bought last year in Colombia. Cost in equivalent USD was $6,600. Here there are not very many W124's, let alone for sale, and some now are being advertised around USD7-8,000. Not a massive increase but not bad for a daily driver when new cars drop in value by massive amounts. The other benefit of my MB is that it was the last MB manufactured with NO computers.
I think this happened in the 80's. I had a magazine that listed many cars prices. Before and after. There was a Ferrari that was sold for 3 mil +. Later it went a little over 1 mil. You are spot on Jack.
Yep, Jack and I are old enough to remember when E-Types were selling for 100k in 80s money. And people were stupid enough to pay over retail for new cars! 😂
You forgot you don't pay capital gains on classic cars. That is probably the biggest factor at play
wasting asset
True
And when you have money, the ability to afford special cars and an accountant who understands your passion.
@@brianiswrong I've got money and cosworths...no accountant
@@bigjohnfury5662 the owners don't change then😂
I remember buying my Lancia delta Evo many years ago just because it was the car I always wanted. I still have it and can’t believe what they are selling for now.
Lovely car, do not sell it, enjoy it!
DO NOT BUY A CLASSIC unless you want to SPEND SPEND SPEND they are money pits and usually the reason the original owner moved it on.
I understand young people are being encouraged to be more aware of the environment but I struggle to see how enthusiasm is dwindling for younger people. I’m 23 and bought my first classic last year, a 1989 BMW 325i and it’s the most fun car I’ve owned. And it seems a lot of people who I see out on the road and at shows driving similar cars are between 18-30. I think with all the advances in new car technology with lane keep assist, forward collision warnings, drive by wire controls and touchscreen everything drivers are feeling isolated and less in control. And with all that in mind, some people are growing to appreciate the joys of a well engineered car that is genuinely intuitive to interact with.
So true ! A car is a depreciating asset - as is a house. Entropy cannot be prevented. When parts for service are no more, neither is the car...
in New Zealand, happily , a 1990's Alfa is cheap - provided you can work on it yourself. And I can...
I watched that auction with the RS500.........gone to the middle east....600k like 60quid lol
The smelly old petrol cars that are made of real metal (pre-plastic fantastic) will hold their value, especially rare and beautiful sports cars. Best years: 1930s and 1960s. For those on a budget: MG, Triumph, etc. That's my two pennies' worth on the subject.
Totally agree about the generation gap 🤔
Also i think the prices of 80s and 90s cars grew because of those dreaded scrappage schemes 🤔
A lot of good Quality cars were scrapped leaving a shortage in the market in my opinion 👍
The 2009 scrappage scheme list is publicly available and it's one of the saddest things I've read! On top of that, didn't the scrapped cars require a valid MOT to qualify?
@@JamesGadbury
Yes i saw some of those cars on the list it was very sad 🤔
As far as i can remember I don’t think a car needed to have an mot to qualify .
But I could be wrong.
I saw a Channel here on TH-cam and they went to a huge compound somewhere in England and it was full of these cars .
Think the Channel was called exploring with fighters
He uploaded it a few yrs ago .
There were lots of cars there from classic minis to XR3is and pug gtis
Crazy 😜
If you can’t find the channel just type in scrappage scheme cars and it should pop up 😉👍
I have an XK 140 I have owned for 34 yrs , the pleasure it has given me over that time means it doesn't owe me a cent.
Your comment re-Generational is 100% correct. This point is mentioned numerous times on the, Bangers and Cash programme.
Well said…I have own 2 period vehicles (2 decades)because I love their shape & hate planned obsolescence…
My son is 15 and he lusts after JDM cars. Skylines, Nissan s13 , evos, Subarus. Ect
And the kids driving fiesta st’s now will keep those as cherished later in life.
I agree 100%. Buy cars if you enjoy them. You can not really buy time with anykinda money so you want to fill your time with good, fulfilling experiences that you want to remember. That is the content of this movie we call life.
Thanks. As far as I'm concerned this is the only rational description I've heard of what has happened the reasoning and what may or is likely to happen into the future.
You make some good points especially the generation aspect, one thing you didn't mention is the devaluation of the pound, so in the future you will need more pounds to buy the same things hence why cars look expensive but aren't really.
I think you are spot on, am 64 you do speak a lot of sense, l have watched this coming myself.
Not necessarily classic cars, but my brother in the US noticed older "analog" cars seem to be getting desirable. Perhaps some have gotten frustrated with 4 wheeled computers.
I hate everything your saying but I know your absolutely right. I own 20 classic motorcycles. And less people are riding motorcycles. The next generation aren’t interested. So they won’t be sort after. And will fall in value. Thank for telling me what I already knew. But it’s ruined my day hearing someone else say it. Cheers
They’re interested, just not the ones in the UK & USA.
I hope you're right Jack as there are so many modern classics I've fancied which have risen in value so much that they're simply out of reach now. Things like the Integra type R, Clio williams and even the 306 rallye, based on your favourite GTI6, which was only worth two grand as recently as 2015/16 but now is beyond the ten grand mark. Cars should be bought to be enjoyed and if they appreciate that is just an incidental bonus.....i'm hoping some sanity might reappear in the next few years. In the meantime my tip is maybe buy a 2000s soon to be classic like a focus ST170. Still cheap and unlikely to depreciate further.....
Yeah. I have a Skoda Octavia vrs MK1 in red sitting in the garage. Used for high days and holidays with 51000miles. Cost 3k about 5yrs ago. Can't see it going lower in price than that.
The Mitsubishi GTO has been largely unaffected by crazy price increases. Great value car, and something you wouldn't have experienced if the other cars you were looking at were affordable. Buy what you can afford and you will have a better experience than beating yourself up over a missed chance to poach that unicorn.
It’s interesting when a car is a record breaking sale… that person essentially got the worst deal in history for that car.
I believe you are absolutely right. 10 years from now the market and the prices will be very much reduced. I buy and keep classic cars because I love to drive them and look at them.
Exactly!!! A V8 Holden in Australia went up from $30,000 to 200,000 in 40 30 years, also took 100,000 to insure, and no factoring in of inflation
I remember seeing in person a Lamborghini Miura for sale for $19,000.00 in Los Angeles. Yep, less than $20k. I remember thinking, that's not so outrageous, I'll get one in a few years. Lol - I didn't.
You right ,the younger generation are not interested in classic cars and I find it sad 😢, they are to busy inhaling nitrous oxide and spending hours on TikTok,Instagram and Facebook .
Great and humorous video, unfortunately completely correct too imo! I enjoy the cars and working on them which has a value for me but as a long term investment they are particularly unsuitable. I’m saying that as an owner of 8 60s and 70s cars which I enjoy driving and not so much looking at so not ideal for me!
Yes, I also notice less and less people are driving too. A lot of families on my street only make do with the one car for the wife to do the shopping and drop off the kids to school or sports and family outings. The kids get around with Ubers or public transport and the parents do likewise. Plus the younger people going through their nightclub phase it's just too much risk having a car and trying to go out without drinking risking losing their license if they get caught driving drunk and the hassle of finding somewhere in the city to park and the car might get damaged or broken into during the night etc, also alot of the newer entry level housing doesn't come with off-street parking either..
I think you’re spot on with what you say in this video, I’ve been saying the same thing for a while. The prices people are asking for some extremely dull cars is laughable. I understand why that’s happening as prices of more exciting cars go up they drag up the rest. There’s also the Goodwood factor….. Austin A35 prices are ridiculous mainly because they now race them at Goodwood. Unfortunately the classic car scene has also become “fashionable” so there are a lot of pretenders mingling about that will fall by the wayside when it becomes unfashionable again.😊
This video is bang on! Most investments don't require routine maintenance, insurance, and yearly registration fee's.
Good video and you bring up good points. Now I'm not into the cars you mention, however last summer I bought myself a low mileage 1998 Y87 garage queen Firebird for less than $10k. Two months ago my insurance company called me to go over or entire policy. They bumped the coverage of my Firebird to $15k. I wasn't expecting this at all. Being that it's a Firebird, many younger people don't know what my car is as they never, or rarely, heard of it.
I understand the cars you mention are classes above my type of car, but it's still very interesting watching this play out.
Honest statement of the future, you will own nothing and will be happy... Not a future I want. I live by my heart and loves, I will be free always.
I agree with your thoughts, Jack, particularly on the Generational aspect. Derek at Matthewsons is often heard commenting that the market has fallen on the pre-war stuff for exactly this reason and the same is being seen in the classic bike market - values have fallen for the BSA Gold Stars and the like while 70s and 80s bikes from the Japanese manufacturers are seeing values increase.
I agree with you... not necessarily for all the same reasons (and funny enough I said same thing on your video 6 years ago - was it really that long ago? Perhaps I watched it 3 years ago... ).
Overall, I agree that classic car prices will fall. Particularly the normal everyday classics, things you mentioned Fiestas, Novas, Peugeots etc. Here you 100% right - they are only valuable to certain people in certain countries of certain age, but they are not valuable overall. I still think that more interesting cars (and not necessary the all time greats like 250GTOs etc), but even something like BMW old BMW 8-Series, 6-Series will remain valuable... not crazy valuable like now, but comparable to new car prices (which in itself is irrational). I call them "cars of classic material" and there are few things which makes such cars, they have to be enthusiast cars, meaning fast for their time/class, they have to be relatively rare, they have to be nice looking for the time (coupes usually good choice as they are both rarer and nicer), they should not be too reliable (attrition helps).... such cars they maybe not solid long term investment, but at least they won't be worthless. But investing in ordinary cars just because they old makes no sense - perfect example is Ford Model T, very important car historically, very old (100 years) and it is still worthless. £10,000 buys you running example in somewhat restored condition. Sure £10,000 is more than $500 it costed new, but after applying inflation, after considering the cost of maintaining it for 100 years... that car lost a lot of money. So ordinary cars just don't appreciate.
The petrol going away will have same effect as it had coming in. Think about steam engines... are they really valuable? No they are not, there are still some enthusiasts, but overall they are just and old things... so old that nobody even appreciates them anymore. And I reckon that will happen to petrol car (overall internal combustion as well).
I personally buy classic cars just because I hate depreciation... and because I am cheap... I have made few good buys, just by being cheap and making few good choices (Honda S2000, 6 years ago for £2000 as an example, BMW E46M3 4 years ago for £5600)... so I ten to buy cars that are depreciated all the way down and just before they really goes for scrapper... as such from the time I buys them the only way in terms of value is up... and if it goes down then I will recoup my money from their weight in metal (exaggerating a bit, but that is somewhat true). By trying to choose what I deem "more interesting and special cars", by buying coupes I generally on the money... but my goal is not to make money, my goal is not to lose money on depreciation and so far I made money... but I am not under any illusion that this is sound long term investment... I recently looked to some ridiculous prices and said "get lost, you never making your money back". And yes sure E30 M3 will not be worthless, but I cannot see it making any gains from current £50k price... and M3 is fine, but I really find it funny when people pull out rusted out 318 automatic saloon and thinks it is worth £8000, just because it is E30 as well.
So I guess my buying advise for classics - if you can get one cheap and it is interesting car, you interested in it ... then get it... enjoy it and there is decent chance you can get your money back and even make little profit in few years time. But if you buying the car because it is already considered classic, then you are too late, the price is already up and from there it will only go down. Even if the actual price will increase, once depreciation is considered, once storage and maintenance is considered, once opportunity cost is considered ... you likely going to lose money or at best come out without any profit.
You know get things like XK8 whilst they are cheap, Aston Martin DB7s, even later XK and XKRs (X150s), they are likely at the bottom of their price curve and you won't see them for less in future. But don't buy M635 Csi for £35k, or Porsche 911 (994) for £100k, you missed that boat, you should have bought them 15 years ago when they were £10k. This is obviously definitely not exhaustive list, just few examples...
You're right of course. I bought my -58 220S and my -59 Belvedere for pocketchange back in the seventies. 10-20 years ago they where worth more than today. Not to mentioning my friends who went for Standards, Borgwards, Ramblers, Panhards,FIATs such brands that's today sells for the same pocketchange as way back when. But one has to count all the fun I had with my cars over the years and all the friends I made.Then it's totally worth it even though I know I will not get much the day I'm to old to drive.
Too many speculators spoiling it for genuine enthusiasts.
Brilliant. I was thinking about the generational element last night whilst watching fast fords go for silly money on Bangers n Cash. It must be generational I decided which means they won't have a market once the 40/50 yr olds try to cash out in the next decade, surely? You've explained this far better than i could but i think you've hit the nail on the head Jack.
My NAS (North American Spec) Land Rover Defender has kept going up in value. It is such a basic vehicle, with no electronics except for the fuel injection system. I've done all the maintenance on it, which is mostly routine oil changes (I only drive it a couple thousand miles a year). Vintage 4x4s such as Land Cruisers and Land Rovers have a timeless charm and utility which appeal to all generations, especially as modern day SUVs have all morphed into amorphous blobs loaded with electronic gadgets.
Giacomo man you make some sound points. I'm 23 and I can count, at most, only half a dozen of my mates who are into cars. Emissions and petrol prices are a real sticking point for young people and hence none of us own anything with more than six cylinders. Yet this all seems to make classic car owning a cooler niche...
Good to hear you agree.. and that you yourself do like classics!
Wise words Jack ! As you say, once us generation Xs have croaked it, or are too old to drive, values of 80s cars will dip… that’s still 10-20 years away I guess
I would add that as parts become more difficult to find, there is a critical value below which cars, even for enthusiasts, become "uneconomical" to keep on the road. This critical value also goes up and down with interest rates, but inversely. So that value is higher now than it was, so there is less "headroom" between the market price today ( coming down ) and this economic-to-repair price ( which is rising )
Bang on.... But We do it for something to do When the Children have gone. Not really as an investment, but as to minimize the loss when the itch has been scratched.
I believe you're spot on with everything you've said Jack 👍
Really good overview, you are so right when you say generational demand is driving classic car prices. Be interesting to see what happens to modern classics prices over the next 10-20 years, given how quickly the digital/electronics become problematic.
Good vid jack, never a truer word said, that's why I'm getting out of my classic now....or trying to
I'm happy to see in the comments that we're all in the same boat! I've poured about 40k in the past couple of months for the complete restoration of my Mondial QV which has immense sentimental value (it was my dad's car since before I was born), and could maybe sell it today for about that. It's not a financial investment, classic cars are an emotional and memory investment!
I wish you a lot of joy with your Mondial! Drive her with pleasure!
Thanks. yes, I agree with most of what you say. Here in Australia we will still need cars for longer - public transport is not up to the job. Let's see how battery technology works but I also think that hand in hand with the lack of interest in cars among the new generation is the fact that most cars are made to be disposed of now. I am trying to get rid of one now and am back to driving my 1964 Landrover daily in preference to the time bomb of a 2015 Renault van, which was built to be built and sold, not maintained.
The Generational aspect was a great observation which had never occurred to me.
Something else to be considered is the ongoing costs of looking after ones investment: storage, maintenance and insurance.
Well argued Jack. Other considerations are parts availability and price which is already an issue with many relatively modern cars even those fairly humdrum, people to work on them to keep them running for those who actually want to drive them and legal considerations where in future it may only be legal to drive them at special events and not anywhere anytime on public roads.