activity in the classic car market
continues to lift prices|
or Historic Automobile Group International is an independent investment research
company and think tank with specialised expertise in the rare classic motorcar
sector. Their website says "the group has created benchmarks which track
this alternative asset class accurately for the first time, using rigorous financial
methodology usually associated with more traditional investments." The HAGI
Top Index is published on the Financial Times website. More
Why are alternative investment activity price pressures a concern for
classic car enthusiasts?
If you have a classic car and have reached the
stage where you are thinking of selling up then the price increase is very welcome!
However with a classic car like an MGBGTV8, which has for so many years been seen
as an undiscovered classic available at very reasonable and affordable prices,
it is already being written up in various classic car magazines and motoring sections
in the national press as a classic car to buy - limited production run, V8 power
and very attractive prices when compared with the usual "classic car cherries"
like Jaguars and Astons. But as prices rise the MGBGTV8 will become less affordable
for an enthusiast and buyers with deep pockets or funds to place in "attractive
alternative investment markets" will appear.
Would the character of the V8 Register as an enthusiasts' group then begin to
updated price guide for MGV8s released in February 2015 indicated prices had moved
ahead from our previous price reviews in 2010 and 2014. The welcome return
of the road tax exemption for early MGBGTV8s clearly gave prices a lift and
as a rolling 40 year exemption it will continue to work its way through the rubber
bumper models. For Condition 1 MGBGTV8s that rise of £7,500 was from £9,750
to £17,250 although around £2,000 was from the VED exemption saving
effect, so a net rise of £5,500 (56%) in five years. Sadly it will be another
18 years before the VED exemption will reach the RV8 models in 2033. |
major factor lifting classic car prices over recent years has been the increase
in investor activity where classic cars are seen as "alternative investments
coming of age with many having their fortunes plotted much like stocks
and shares." In today's issue of the Mail
on Sunday, Toby Walne explores options for spreading your investment risk
and sees how they compare with traditional equity markets.
The chart alongside
shows the comparative growth rates of alternative investments with the HAGI Top
50 Index for classic cars showing a 170% growth since 2010. On the HAGI website
their Top ex P&F Index (designed to measure the rare collector's automobile
market outside the marques Ferrari and Porsche) shows a 7.55% "year to
date" growth although a 1.6% fall in the month.
investments chart - gold is seen as a safe haven but in recent times has lost
some of its lustre with falling, stamps have followed the FTSE All-Share index
and wine investors have been losing money. Classic
Chart above source: Mail on Sunday,
source: Hagerty website
the Hagerty website they have an Affordable Classics index which is the
nearest covering cars like the MGBGTV8.|
Affordable Classics: Index of
collectible cars priced under US$30,000 (£19,355)
Classics" group includes the Datsun 260 Coupe, Ford Mustang Coupe, Triumph
TR6 and the MGB Roadster. Their expert commentary says "while the top of
the market is exercising restraint, buyers at the lower tiers of the market are
more optimistic. For the first time since we began tracking collector car values
in 2006, Hagertys Affordable Classics Index was the most assertive mover
of all seven of our primary market indices. The 7% climb since January 2015
is this groups biggest move on record. It was pushed by a massive upward
correction for Karmann Ghias and several large private sales for 240Zs. The Ford
Mustang, Studebaker Avanti and Buick Roadmaster all notched up sizable gains."
did MGBGTV8 prices move over 2010 to 2015?|
Our price review prepared by
Adam Fiander released in February 2015 showed a major price increase over that
5 year period, partly as a result of the value of the annual road tax saving
following the Government's very welcome reintroduction of the rolling 40 year
VED exemption. The chart
alongside from our our price review in February 2015 illustrated that very well.
See our price guide and reports. More
are MGBGTV8 prices now?
If you assume prices of Condition 1 cars have followed
the trend indicated by the HAGI and Hagerty indexes then a 7% rise would take
prices for chrome bumper tax exempt cars from £17,250 to just under £18,500
and Condition 2 probaly to near £10,500. The rubber bumper prices on that
basis might be near £15,150 and £9,350.