We’ve been here before

With so much economic uncertainty swirling around, insurance company Hagerty has picked a timely moment to release possibly the most in-depth research yet into the long-term fluctuations of the classic car market. Produced by John Wiley for Hagerty Insider and following the fortunes of a single model of car over more than two decades in the USA, the report was prompted by the dire global economic outlook following the Covid-19 outbreak and sought to analyse how the classic car market had fared in previous recessions. And how it might this time. The Hagerty report focused solely on the fortunes of the 1954-63 MercedesBenz 300SL, especially appropriate according to Wiley because ‘the car has been considered collectable from the time it was new and has never gone out of style’. Starting in 1998 at a value of just under $400,000, the 300SL is currently trading at $900,000. It peaked in 2012 and has had three sustained periods of price falls: the first after the 9-11 terror attacks in 2001, when it dropped steadily for 18 months, reducing values by 30%. The next big drop came after the global financial crisis in 2008, losing 18% over the next 17 months, but faring far better than other markets. Once the market did recover, it nearly doubled in just over two years before suffering its most sustained recession after its 2012 peak, values only bouncing back in 2018. One of the most interesting aspects the research uncovered was that, even though repeat sales values had started to tumble markedly in 2012, the market frenzy for the model continued unabated, with the greatest number of cars being bought and sold in 2014. This is attributed to the time when the most examples came out of long-term ownership or were new to the market, but to give it scale the number of 300SLs crossing the auction block doubled between 2009 and 2014. Although values have taken a hit, the classic car market has weathered the financial crises far better than other markets, reckons Wiley: ‘The stats tell us a recession has historically been a good time to buy high-dollar classics, especially if you factor in that cars always perform better than any other asset classes on an enjoyment-adjusted basis.’