DEALERS BANK ON ‘RECESSION -PROOF’ CARS
Market experts learn from 2008’s financial crisis and prepare for busier times – we reveal the cars most likely to be affected
Classic specialists have said this week that the market is well placed to weather the UK’s ongoing recession – and that some prices may even go up as a result.
The UK entered into recession, defined as two consecutive quarters of negative growth, on 12 August due to the economic slowdown caused by the COVID-19 pandemic. But market experts have pointed to the boost to the classic market after the 2008 financial crisis, when investors saw classic cars as a safer investment than other assets.
Andy Welham of The Classic & Sportscar Centre said: ‘Recession doesn’t scare me; our boss worked throughout previous recessions that showed up classics as being recession-proof.’
Classic specialists have said this week that the market is well placed to weather the UK’s ongoing recession – and that some prices may even go up as a result.
The UK entered into recession – defined as two consecutive quarters of economic decline – on 12 August due to the economic slowdown caused by the COVID-19 pandemic, but market experts have pointed to the boost to the classic market after the 2008 financial crisis, when investors saw classic cars as a safer investment than other assets, with strong performances for classics like Aston Martins, Porsches and Jaguar E-types pulling up values for many sub-£50k cars.
Sales consultant, Andy Welham, said: ‘Recession doesn’t scare me; our boss worked throughout previous recessions – the most recent being in 2009 – that showed classics as recession-proof. There’s a lot of fear out there, and that’s understandable, but if previous recessions are anything to go by, they’ll give us a boost.
‘At the start of the pandemic, we sold 100 cars in lockdown; we have a large range of cars in stock which we can then tailor to an everchanging market.’
Other dealers that CCW spoke to also reported positive trade during the lockdown, and that despite the ongoing recession they aren’t seeing a slowdown in trade.
Total Headturners owner, Mark Harrison, said: ‘People have to put their money somewhere, and classic cars are seen as a safe place for it – cars and gold. Houses are hit and miss. People were uneasy because of Brexit and lockdown, and were in the doldrums, but a classic car gives them their freedom back.
‘Many people who received start-up loans during lockdown are seeing classics as an investment; they’re thinking they can have their dream car for a year, and sell it for a profit just before the loan repayment is due.
‘ We’re the busiest we’ve been for the past four years and have been working seven days a week since lockdown began.’
Hagerty International’s head of UK valuations, John Mayhead, said that forecasts need to distinguish between enthusiasts who bought classics because they wanted them and investors who paid escalating values for cars to make a profit upon their subsequent sale.
He said: ‘I think there’s a definitive line between ‘investment’ classics – typically cars costing £50k plus – and enthusiast cars. Typically, we’ve seen high-quality, expensive, highprovenance cars of the best marques do well in investment scenarios. Whatever happens, there will be an active market for these cars.
‘On the other hand, a serious recession could mean that some enthusiasts are forced to sell their cars due to their financial situation. That could negatively affect values in the sub- £50k market. I don’t see enthusiasts being priced out of the market, possibly the opposite: I don’t envisage many people buying up MGBs as investments, for example.’