The classic car market in 2020

I have to ask myself, was I a fool for buying a ‘future classic’ car five years ago? ‘I had a dream’ and it came true but has it left me with a nightmare? Join me in looking at the classic car market as it stands in February 2020.

What is the classic car market saying?

Well first the good news, according to Hagerty the go to for the classic car market rating index, the market is in a reasonably good place. That is to say according to the February 2020 index the market is expanding. However, this is a fall from January, which had a better rating. You’ll need to lift the lid to examine the details and Hagerty (see link below) provides this detail on their website. Most notable for the mainstream private buyer is that the market is at its lowest since 2013. Market sentiment is also low.

Hagerty Market Rating for February 2020
Hagerty Market Rating for February 2020

Globally the affordable classics have seen a rise, whereas 1950s American cars, British cars and other indices have seen a decline. However, the asset class that is classic cars are driven by passion in the most part. Of course there have been speculators and those jumping on the bandwagon but for the purists and those with that must have desire there will always be an itch matched to a scratch.

Types of classic cars

The first thing to say is there is no clear definition of what constitutes a classic car. It is very much a subjective market. Until we are all flying personal transportation vehicles or teleporting, classic cars are what you and I consider them to be. However, below are some terms you will hear in relation to classic cars.

  • Modern Classic – A car that is at least 10 years old and less than 25 years old. Potential examples include the Audi RS 5, BMW M3 (E46 and E92), Audi TT and Mazda MX-5 MK1
  • Future Classic – Probably one of the most subjective and speculative terms you will hear. These are cars that right now could be tipped as classic cars in the future. Potential examples include: Alfa Romeo 4C, Alpine A110 and Porsche Cayman GT4. Desirability, heritage, design and rarity are all attributes of a future classic. Which enables people to speculate on new cars becoming classics in the future
  • Vintage Classics – These can be seen as pre-war and post war classic cars up to the 1950s. Charm is probably the word that embodies these types of classic cars the most. BMW 327/28 convertible, Cadillac Model 353 for pre-war and Rolls Royce Silver Cloud or Jaguar XK140 roadster for post-war are good examples

What we can say is that in the fullness of time all cars become classic in their own way. Whether its a memory of the car your parents drove when you were younger, your first car or the car that drove you to a wedding venue.

Classic car exemption

In the United Kingdom the Government has some guidance for classic cars. The Historic (classic) vehicles: MOT and vehicle tax pertains to cars over 40 years old. In essence cars over 40 years old are exempt to tax and MOT.

Does it make sense to buy, hold or sell a classic car in 2020?

I will probably do a poll or survey on classic cars in the future. However, to answer the buy, hold or sell question assumes we are all starting from the same position. The demand for cars in excess of £1 million is probably there as is the supply. But the asking prices are not being met, at least not according to the August 2019 Monterey Car Week, which is a barometer for classic car sales. Many of the high ticket classic cars did not meet their reserve.

Buying a classic car

The more affordable classics and modern classics are in a different league compared to high end items from Ferrari and Aston Martin for instance. Get to know the market your desired car is in, whether it is by era, modern, pre/post war or rare classic. Do your homework, sign up to or review owners forums. Due diligence is of paramount importance so do check:

  • Running costs
  • Paperwork
  • Panels fit
  • For rust and damage repair
  • The interior wear and tear matches the mileage and paperwork
  • Engine, electrics and transmission
  • HPI check

In short, buying in the current market is subject to ones desire. If it is being purchased as a desirable and long term ambition go for it. Especially if it is going to be a medium to longterm keeper. However, buying a classic car speculatively in the most part at this point in time could be considered foolhardy. Keep a watchful eye on the market in 2020.

Holding a classic car

Holding a classic car that you own will come down to factors such as running costs, longevity, timing and your ongoing desirability for the car. Personally, I am looking to hold onto my Mercedes R129 SL 500 for as long as I can. Running costs for me are around £1000 a year, which includes insurance, servicing but excludes fuel. That said I am probably doing less than 1000 miles a year in it. The car is not appreciating and arguably has lost its gains. However, with summer around the corner it is something to look forward to. Other factors such as government changes to fuel duty and taxation could tip the balance to sell when combined with what is currently a depreciating asset. At least it is paid for.

Sell a classic car

Earlier in this article I mentioned that there is no clear definition of a classic car. If you are considering selling your classic car you need put yourself in the shoes you wore when you were choosing your classic car. You probably considered its collectability, how much fun you planned to have buying your hero. Think about what stage in your life your were (before a family or after a family). These factors will help you to see your car through the eyes of potential buyers to engage with matched enthusiasm, should you decide to sell of course. February is probably not the best month to be selling a car so sleep on it for a few months. If your car is desirable it will probably be worth more in the warmth of spring and summer than in winter.

As for the classic car market in 2020, be cautious. The magazines and editorials all seem to suggest a market with a puncture. As a motorist you just need to factor in your personal situation and monitor the goings on during 2020. This is likely to be a year of change and influences.

Supply and demand for classic cars

The old adage of supply and demand is as pertinent to classic cars as it is to commodities such as crude oil, gold or coffee. Over supply and the price drops, high demand and the price rockets.

Metaphorically, the classic car market is like a classic car, it has its good and bad days. The good days make you feel alive as you enjoy your own unique experience in the modern day whilst experiencing the good feelings of a bygone era. In contrast when your pride and joy goes wrong, scuffed knuckles, choice words and a bleed of your wallet can be enjoyed in equal measures.

Cars are the sculptures of our everyday lives.

Chris Bangle

Right now, subject to the classic car you have, the market is somewhat deflated. Oversupply, over pricing, seasonality and the current climate are all negative factors. Climate, lets touch on that for a moment. Today in February 2020 Climate Change, the threat of a global pandemic from the Coronvirus (COVID-19) and the world financial markets catching a cold, taking billons out of economy will have tanked the classic car market. The climate for buying a classic car or just about anything of value is not as fertile an environment for the not so savvy classic car investor. That is not to say that savvy classic car investors will not be using their orca like instincts to identify and capture easy pickings as others panic.

Is the classic car market dead?

For those in a hurry, no. The classic car market is still very much alive in 2020. What has changed is the demand in different sectors of the classic car market. Classic cars along with other ‘collectables’ such as handbags, wine, watches and art all provide an alternative investment opportunity. The old adage of supply and demand is a truism when it comes to these investments. And I think this is the point, choose wisely based on desirable items in short supply but also in demand or expecting to be in demand and they will bubble to the top and remain there.

The best classic cars are on the rise

The pinnacle of the markets hold items like the McLaren F1 car, vintage Cheval Blanc 1947 wine or a Hermes Kelly in Rose Gold handbag as the most desirable items. Below these items are different tiers of desirability that are met with different levels of affordability and consequently people looking for these items.

If the market is influenced by anything other than a sneeze then only the crème de la crème will remain on top. Everything else would have caught a cold and will suffer varying degrees of a short to medium term illness. This analogy is apt for the 2020 classic car market, which in part is recovering from a cold. While the most desirable of cars from the likes of Ferrari, McLaren and Aston Martin have some immunity. Their desirability, short supply and an ever increasing crop of billionaires put them into a different league out of reach for the many.

What influences the classic car market?

And the rest of the market? The other lower classic car leagues are influenced by varying degrees of:

  • Pricing – The yard stick is now elastic when it comes to classic car pricing. Prices can vary by 200% or more for the same car depending on who is selling
  • Quality – There is a glut of classic cars that has flood the market. So much so it is difficult to identify the wheat from the chaff
  • Psychographics – Peoples interests, lifestyle and attitudes to cars are changing. Cars like the Citron 2CV6 are now as desirable by some as an BMW E46 M3
  • Demographics – Who and where people live, their age and their earning power are very much an influence on affordability and having spare money to invest in classic cars
  • Economy – The last classic car boom was on the back of the 2008 financial crash as people looked for alternative places to invest. Today low interest rates remain and the overall economy is looking better according to financial pundits. This could herald another upward bounce
  • Environment – Emissions, miles per gallon and the associated stigma of owning anything other than a pair of clogs can be a barrier
  • Supply – Good supply of good classic cars is what is important. The dregs in the market can have the effect of dragging the market downwards. While diamond examples will continue to shine and warrant high demand

What classic cars to look for in 2020?

If like me you still have a box of old car magazines now is the time to have a rummage. For here lies the key to your next classic car investment. Take a look at the cars you read about all those years ago. Look at the ‘cars of the year’ of the era and the group tests. Identify the cars that are now desirable classic cars that are sought after and then look at the cars around it that may be up and coming.

A case in point and arguably a bargin in comparison is the Porsche GT as compared to a Zonda or McLaren of the same era. Is there much difference in the calibre of car to warrant the gap in prices? We can probably tell, which has the better build quality but its the demand, hype and short supply that are factors in the increasing gap between them.

Below as illustrated in the word cloud is a selection of classic cars from a broad spectrum of price points, eras and desirability. What they have in common is their potential to be dominant classic cars in their own right. Again I will run a poll at some point to identify, which cars should have made the list. Mercedes-Benz 300SL Gullwing anyone?

Classic car wordcloud

Emissions, guilt, co2, cities are actually becoming a barrier for entry (name cities such as glasgow and Birmingham and find some abroad too)

I am no longer able to drive my SL 500 top down in the summer through London unless I want to have pay £x per day

Did I fall for the classic car market hype?

In August 2015 while on holiday in France I did what I believe most men do (correct me if I am wrong). I do what my wife and children would say, which is to ‘Grandpa Joe’. That is I remain in bed for hours like the fictional character from Charlie and the Chocolate Factory with a modern twist, which is I Google. I Google all the things I can’t afford and probably will not suit me like tight fitted black leather trousers, houses in exotic locations and fantasise about cars. I was kidding about the leather trousers by the way.

This particular day, one of many in August I spent hours looking at pre-loved Mercedes R129 SL 500’s. I was in the ‘I just had to have one’ mode.

I blame Harry Metcalfe for my Mercedes SL500 impulse buy. Although he recently sold his R129 SL600 I still have my SL500. Its hard to believe its been over 5 years.

Harrys Garage – Mercedes R129 SL600 YouTube video – My SL500 inspiration

Sat by the pool after making it out of bed I contacted my bank online and put in for a loan. I figured if it’s not meant to be I would get rejected. Within minutes I had the offer and I all I had to do was justify it, which in my head was easy and convince my wife of the spectacular investment opportunity, far less easy. I managed to employ the lost boy look and every other action I could think of to look pitiful and helpless. For without this car I would be half a man or less. Ok a bit of an exaggeration but it worked and I got the go ahead from the chief to agree to the loan. Moments later and I was richer by the loan value. For a few moments I considered what else I could buy with my ill gotten gains. That feeling passed quickly and I was straight back to bed with Google as my guide trying to find and purchase my dream Mercedes R129 SL500.

Did I buy an R129 SL500?

I actually purchased my SL 500 in September 2015. This was after trying to place offers on cars while I was still away on holiday. Such was my obsession. But did I buy the right one? To my relief yes I did. Did I mentioned I did copious amounts of research? I purchased a 1997 Mercedes R129 SL500 with the M119 engine. Said to be one of the best engines ever made. And that is not just me saying that, it comes with heritage as the M119 engine was used in the Le Mans winner; the Sauber C9. I can certainly vouch for the silky smoothness and freight train like torque that builds and builds. And it no slouch either, simply a perfect summer wafter.

Dismantle a M119 engine and admire what was known as “Craftsmanship”

Words from an unknown Mercedes technician

A quick look at the available Mercedes SL 500’s

Selfishly, allow me to look at the Mercedes R129 SL 500 market and the number of them still on UK roads today. As the chart below depicts there were 1316 cars registered in 1995. Today there are 1295, a reduction of 21 cars or just under 2%. Allowing for the dearly departed cars, higher mileage, the unloved and the overly customised this leaves a decreasing number of desirable examples. The SL Shop has probably seen their fair share of great examples and probably the go to place for those wanting an A1 example. However, a 2% reduction may tell a story of love and passion for these cars. The fact that owners love to own, drive and maintain them. And the fact that the SL is as desirable today as any SL model before and including the R129 model.

The graph has another important message to impart. Which is since 2008 there is an increasing number of Mercedes SL 500’s that have been SORN (Statutory Off Road Notification). In the United Kingdom this relates to the car being taken off the road, allowing the owner to not have to pay tax until the car is needed again. In the UK this can be for longer periods of time or for when the sun comes out for example.

Generally, looking at other car manufacturers and models of this era (1995 to 2019) the pattern illustrated below with the funnel effect is consistent. The Porsche 911 comes to mind albeit that the volumes are different. However, cars such as the Ford RS 2000 show a complete overlap with more cars on SORN that are on the road. Which may explain why you fail to see as many of the classic cars on the road as opposed to car shows and pre-arranged meets.

Data source is from

Thank you for reading this article on classic cars. Please look out for more articles in the future. More blogs from WheelsMatter are available. And if you are in a writing mood, why not leave a review or testimonial for a recent visit to a new or classic car showroom.