BREXIT: HOW ‘LEAVE’ VOTE AFFECTS YOU
Demand from international buyers rises, values to remain strong and ‘classic friendly’ legislation more easily achieved
British classic values are unlikely to be hit by Brexit in short term, but exports are set to increase due to early adjustments in the value of sterling.
As for the wider classic community, the result has opened new divisions. FBHVC’s Geoff Lancaster says: ‘A remain vote would have secured us a seat at the table when discussing the classic car movement across Europe. Having left, we can only watch from the sidelines.’
Chairman of the Parliamentary Historic Vehicle Group Sir Greg Knight disagrees. He says: ‘Britain is classic-friendly, and I feel this move will allow us to breathe easier.’
Last week’s EU Referendum looks set to prompt huge changes in the classic car market. Industry experts believe mainstream British classics are unlikely to be hit by the UK’s vote to Brexit, but imports at the international end of the market will certainly be affected by early adjustments in the value of Sterling.
Prices of common imports already in the UK are likely to strengthen as a result. With 52% of votes favouring an EU exit against 48% voting to remain, the country has by a whisker set into action the biggest British political upheaval in a since the end of WWII – and economic pundits predict widespread changes ahead.
It is unlikely that the domestic market for British classics will feel any effect from Brexit, if people keep on spending. Mal Bishop of Spurr Classic Cars of Sheffield is unconcerned by the result: ‘Our buyers tend to be quite patriotic and want to buy British cars, and I can’t see those changing much. The only scenario it might affect is the cars we import from the US, where a new trade deal might have made these cars cheaper for UK buyers.’
However, for those trading across borders the story is very different. David Golding of Dublin-based Classic & Vintage Cars says: ‘The results of leaving will be disastrous, particularly if Sterling ends up crashing as a result and ends up achieving parity with the Euro.
‘I do most of my business – as much as 60-70% of the cars I deal with – with the UK. In the long term it’ll mean having to pay tariffs and import duties on cars from there – the sort of thing I currently have to do when I’m sourcing cars from Japan.’
The early reaction from the financial markets was worrying, with the pound falling to its lowest level against the dollar since 1985 and the FTSE 100 recording its biggest one-day drop in history. The markets did recover slightly, but with the Government in limbo, and the EU calling for us to come to the negotiating table, the situation is still very fluid.
Nick Whale, managing director of Silverstone Auctions, is unsure about the longer term but agrees that there will be turmoil in the coming months. He says: ‘Leaving the EU will unsettle values. We won’t just be able to pop a car on a trailer and take it to Europe. We don’t know the rates of tax various countries will levy on imported cars and that will have an impact on the willingness of people to bid or buy.’
‘It’s too soon to tell how this will affect the market,’ retorts London dealer Graeme Hunt. ‘We don’t yet know where the pound and Euro will stabilise, and we can’t pass judgment about their relationship. If the pound continues to be low against the dollar we can expect to see American buyers coming to the UK for classic cars, which will be a boost to our economy but will mean cars leaving the UK. However, economists never saw the 2008 crash coming so we can’t rely on them now.’
Richard Truett, industry editor of the Detroit-based Automotive News magazine and serial buyer of British classics, believes it will be a buyers’ market Stateside. ‘It isn’t just cars that will be cheaper if the pound holds at 1.32 to the dollar. Shipping from the UK will also go down. While most Americans who pay attention to European news are very concerned about Brexit, classic car buyers and spares dealers here are probably rejoicing – if they are looking at exchange rates. The money they pay has dropped, but the prices they charge will very likely remain the same.’
Gary Dicks of Somerset-based classic French car importer 2CV Imports is worried that exchange rates will cause classic car values to fluctuate and imports to become prohibitive. He says: ‘If the relationship between the Euro and Sterling changes it will affect our business costs – ferries, fuel, and the cost of buying the cars in France. We’ll have to pass this on to the customer so our imports will get pricier, as will those 2CVs, Dyanes and so on in the UK. In the case of popular vehicles like H vans, prices will rise to the point where enthusiasts may have to consider other vehicles – in turn strengthening their prices.’