I think the whole discussion on the merits, or otherwise, of rising classic car values is fascinating. Personally, I think it’s a good thing. As a hobby, we’re reliant on businesses to produce parts to enable cars to be maintained and restored. Businesses are in the business of making a profit. If there’s no profit in something, people won’t make it for long. How many fixable cars are scrapped because you can’t get the bits? Or you can get the bits, but it’s not worth spending the money on a £1000 car? Or owners would like to buy the bits, but they don’t have the financial means, because really, they’ve bought into a hobby they can’t afford to sustain. The only thing they could afford being the temptingly cheap £750 project car they’ve started with, that really is going to cost a fortune to put right.
Now if values rise, several things start to happen. Immediately, anyone who’s sitting on a project that wasn’t economically repairable, suddenly has something worth fixing. As these cars get fixed, parts sales go up. With more parts being shifted, suppliers have more money and more confidence to develop obsolete parts. Low volume, previously obsolete parts may be expensive, but it becomes more worth spending the money if the finished car is more valuable. Would you spend £250 for a bonnet badge for a £1000 car? Probably not, but for a £20,000 car, it’s more palatable.
Once the initial leap has happened and things settle into a steady rise, status quo will return again to some extent. It will probably never be the case that it costs less to restore a car than its final value. So it will always be cheaper to buy a better car, than to restore a wreck. But decent runners will now be much more worth maintaining, and easier to maintain thanks to the improved parts supply. It will have to take a significant price rise to save the very worst cars. This has happened with E-types, where even the worst wreck is now £35k, far more than the sum of the usable spares from it.
Many people seem to criticise the idea that cars will end up in the hands of investors, rather than true enthusiasts. Where’s the problem in that? Investors can be inthusiasts too, and even if they’re not, if their activity results in an improvement in parts for the rest of us, then that’s a benefit.
I also don’t buy the view that rising values pushes true enthusiasts who aren’t so financially well heeled off the bottom of the market. There constantly seem to P6s getting scrapped or parts getting skipped on Facebook. Clearly, at the moment at least, there’s more poor cars than people who want to buy an restore car on a shoestring budget. For people expecting an MOT’d runner for £1000 time has moved on. That was probably the case 20 to 25 years ago when the cars were 20 to 25 years old. Few were restored, they were just old cars of varying condition. The equivalent now is probably a 20 year old BMW.
I bought my Rover as a non runner for £500. I was briefly in profit after I made it run by tightening the engine earth strap. Getting an MOT on it immediately put me back at a loss as that required 4 new tyres and refurbished rear calipers. Later I replaced the whole exhaust, and for a long time that lot added up to more than the car was worth. It’s only now, with slowly rising values, I’m probably in profit again. But that will go if/when I paint it. I don’t intend to sell it, but I also don’t have money to burn, so it would be nice to know I’d get some money back should I ever need too.
Bring on the rising values, I say.