POST-BREXIT CLAS­SIC MAR­KET ‘WILL WEATHER THE STORM’

De­spite gloomy pre­dic­tions, deal­ers and experts on both sides of the Chan­nel say trade in his­toric cars will pre­vail, even if there’s ‘No Deal’

Classic Car Weekly (UK) - - THIS WEEK -

‘I see a po­ten­tial short-term blip as peo­ple are sub­ject to the ini­tial shock’

NICK SZK­ILER, DEALER

Mar­ket experts on both sides of the Chan­nel have said that prices for clas­sics will with­stand any shocks to the econ­omy as a re­sult of Brexit – even if the UK leaves with­out a deal.

On 28 Novem­ber, the Bank of Eng­land pub­lished pro­jec­tions of how the UK econ­omy would fare un­der mul­ti­ple Brexit sce­nar­ios, rang­ing from a ‘close re­la­tion­ship’ to a ‘dis­or­derly Brexit’, but mar­ket an­a­lysts think that the clas­sic car mar­ket will carry on af­ter fi­nal leav­ing ar­range­ments are fully un­der­stood.

Worst case first, how­ever: ‘In the more se­vere, or dis­or­derly sce­nario, the sharp fall in Ster­ling, along­side the im­po­si­tion of tar­iffs, pushes up the cost of im­ports and over­all CPI in­fla­tion will peak at 6.6 per cent. The Bank rate would then have to rise sharply to 5.5 per cent,’ said Gover­nor of the Bank of Eng­land, Mark Car­ney.

Many clas­sics are bought with fi­nance, a pro­por­tion that only in­creases as the value of the clas­sic in ques­tion does, and this would be made sig­nif­i­cantly more ex­pen­sive were in­ter­est rates to rise to lev­els not seen since 2001. Richard Hud­son-Evans,

CCW’s auc­tion guru, said: ‘Un­til now, peo­ple have been able to bor­row at less than the rate of in­fla­tion, but there is now a dan­ger of neg­a­tive eq­uity. We were in a sim­i­lar sit­u­a­tion in the late Eight­ies and when the mar­kets fal­tered then, many peo­ple sim­ply stopped ful­fill­ing loan pay­ments and re­pos­sessed clas­sics stacked up.’

How­ever, the in­creased glob­al­i­sa­tion of the clas­sic car scene could serve to steady the UK mar­ket, with any loss in do­mes­tic de­mand for clas­sics made up by in­creased de­mand from overseas as Ster­ling falls in value.

Over the Chan­nel, Bernard Mar­reyt, man­ager of Bel­gian clas­sic spe­cial­ist Mar­reyt Clas­sics, took a longer-term view based on the deal bro­kered by Prime Min­is­ter Theresa May.

He said: ‘I think there is some anx­i­ety at the mo­ment about what’s go­ing to hap­pen but I think that the mar­ket is big enough now to find a way to right it­self, and that in two years’ time we will be trad­ing with the UK in much the same way as we are now.

‘ We buy more from the UK than we sell there be­cause of the weak pound at the mo­ment, so I think that the worst thing that could hap­pen as a re­sult of Brexit is an im­port duty be­ing ap­plied by the EU on cars com­ing in from Bri­tain, but now that there’s a deal on the ta­ble we don’t think that that’s go­ing to hap­pen. Theresa May might not be very pop­u­lar in the UK at the mo­ment but we think that she’s got the right ap­proach – the deal that’s been agreed with the EU is bet­ter for the mar­ket than the UK leav­ing with no deal at all.’

Con­cerns that clas­sics may not serve as ef­fec­tive re­turns on in­vest­ments were al­layed by found­ing di­rec­tor of York­shire­based Clas­sic and Sportscar Cen­tre, Nick Szk­iler.

He said: ‘Clas­sic cars have been the best as­sets go­ing which has cre­ated a global mar­ket that sim­ply wasn’t there in the early Nineties, so no mat­ter what they’re de­nom­i­nated in pounds, they ul­ti­mately, but for a few glitches, re­tain their en­dur­ing value.

‘I see a po­ten­tial short-term blip as peo­ple are sub­ject to the ini­tial shock, but the growth in val­ues we have had in the past few years has not been the spec­u­la­tive, red-hot mar­ket we had in the late Eight­ies, so isn’t des­tined to do what that mar­ket did. So too, the tougher things get, the more peo­ple are go­ing to want to in­vest in as­sets like clas­sic cars, as in 2008.’

Wheeler Deal­ers co-pre­sen­ter Mike Brewer said: ‘Peo­ple are hold­ing on to their cars rather than sell­ing them be­cause there’s a lot of un­cer­tainty – are they go­ing to get the right price now, or should they wait? If you’ve got a clas­sic, en­joy it. You’re cur­rently in a world where you’re mak­ing be­tween 10 and 15 per cent a year, so long as you look af­ter, main­tain and keep your car the way it should be, you’ll do right by it.’

The clas­sic ve­hi­cle mar­ket will sur­vive what­ever Brexit re­sult we get, experts say.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.