Classic Car Market Analysis- Size, TAM, SAM, Emerging Trends & Investment Opportunity
Classic and vintage car collections are not just for small-time hobbyists; they also help us grasp American and global history as well as the industrial revolution. In addition to being passionate about collecting cars, enthusiasts are also interested in the development of classic and antique vehicles as well as the historical significance of each individual model. They like acquiring, restoring, and even operating these vintage works of engineering. This interest is likewise unique in that it is both pricey and scarce.
The term “vintage car” refers to vehicles produced between 1922 and 1928. The majority of historic cars were produced during the World War I era, though there are disagreements on when it began and ended. These vehicles exemplify the definition of a vintage car with their dazzling bodywork, unbreakable construction, and powerful engines.
Classic vehicles are those that are between 25 and 40 years old. American classic cars are antique vehicles made in America. To honor the uniqueness and elegance of vintage vehicles, many American clubs occasionally host several meets. Chevrolet, Hudson, and Ford were the three main classic automobile producers in America in 1932.
A well-kept classic car may make its owners feel beautiful and proud and inspire astonishment in classic car enthusiasts. However, the historic car must be maintained and restored to a degree that matches the original as closely as possible in order to keep its integrity.
With a 20,000 percent increase in transaction volume and rising prices paid, the price of classic cars is expected to rise further in 2022.Delays in the supply chain, inflation, and the rising affluence of HNWs all contributed to the growth of the classic automobile market.
Online auctions, which enable prospective purchasers to bid on historic cars from any location, have undoubtedly increased during the past two years. According to data from Hagerty US, a company that specializes in collectible automobile analytics, the amount spent on online car auctions increased from 2020 to 2021. Then it increased by another 2x in 2022, totaling nearly $1bn.
Auctions still account for a very small portion of the classic automobile collector market, accounting for 87 percent of transactions.
Despite the rise of internet auctions, little has changed since before the pandemic.
In the UK, classic automobiles are well-liked, and there has been a consistent need for restoration and maintenance services for many years. Early in the 1990s, when the value of historic cars climbed sharply, the market saw a boom. Due to the increased financial viability of rebuilding severely damaged vehicles, there was a rise in demand for full restoration services. After that, prices started to return to more reasonable levels, though some models did saw significant increases in value in the early and mid-2000s.
Great-end classics have been in high demand in the 2010s, and there has been a consistent demand for restoration services as well as for regular maintenance and modification of vintage cars. The sector did not profit from the economic crisis that started in 2008 and persisted through the first half of 2010. The exceptionally poor performance of certain more traditional investments throughout the first half of 2010 actually increased investors’ demand for specific high-end antique cars.
The second half of 2013 saw the beginning of the market’s strengthening, which lasted through 2014 and the first part of 2015. From the second half of 2015 to 2016, it once more slowed down. The June 2016 Brexit vote increased economic uncertainty, which was exacerbated by a declining currency and rising inflation, causing the GDP to stall in 2016 and 2017.
Buyers of historic cars were significantly more circumspect in 2016 as a result of the large price hikes from 2012 to 2015. The market for vintage cars consequently became stable. Prices didn’t rise as swiftly as they had in prior years in 2017, as buyers maintained their prudence. Values are anticipated to remain stable in 2018 as long as interest rates stay low, which is advantageous for non-income producing assets like classic cars. There are signs that owners have continued to spend money on the preservation of their vintage vehicles and will continue to do so.
In the 1990s, several historic cars were transported to the UK from places with dryer climates in order to meet demand. Many British sports vehicles that were originally exported, like Austin Healey 3000s and E-type Jaguars, were brought back to the UK. Even though the number of imported cars has now dropped, they can still be a reliable source of employment. These automobiles often don’t rust, although they occasionally need to be converted to right-hand drive and frequently need some mechanical work.
The introduction of road exemption, originally for vehicles manufactured before 1973 and then as a rolling protection for cars aged at least 40 years, has had an impact on the classic automobile sector. Sporty, opulent, or exotic vehicles have typically been purchased by classic automobile aficionados.
The preservation of certain less expensive family vehicles from the 1960s and early 1970s that could have been demolished otherwise has been made possible by the lack of road taxes. Few individuals will invest a lot of money in restoring one of these cars to its original condition, but they can provide regular maintenance and repair work for classic car businesses.
The MOT test for vehicles made or registered prior to 1960 was abolished in 2012. Although some repair shops experienced a slight reduction in business, it was still necessary for pre-1960 automobiles to be safe and roadworthy before they could be utilized on public highways.
Most vehicles above 35 years old (on a rolling basis) no longer need to undergo MOT testing as of May 20, 2022. However, they still need to be in a safe, roadworthy condition to be driven on public roads. Vehicles that have undergone significant alterations must continue to undergo annual testing. Though not universally favored, the choice to allow classic car owners and users an exemption from MOT testing may at the very least make ownership and usage of classic cars more accessible to some and aid in the preservation of more of them.