Buying patterns of Generation X and millennials have led to an increase in the importance and desirability of modern classics
In the world of used car sales, a new trend is emerging as some people are making a profit by investing in in-demand classics or those with potential. This is due to the fact that private sales of used cars are free of capital gains tax.
The market for modern classics is divided and nuanced. Exclusive top cars still command high demand, and performance variants of cars like the 997-generation Porsche 911s are enjoying a lot of interest. However, even young individuals, often excluded from the housing market by high prices, are spending substantial sums on modern classics. John Glynn, managing director of Specialist Car Valuations, notes that this interest isn't limited to specific brands like BMW M cars and Mercedes-AMGs.
John Glynn has pointed out that modern classics such as Ford Escort XR3 cabriolets and Land Rover Freelanders are being sold for prices ranging from £5000 to £10,000 in private sales. The best examples of these modern classics are becoming more expensive, reflecting the growing appeal of these vehicles to Gen X and millennial generations.
Experts attribute this high price to the scarcity and appeal of modern classics from the past 50 years. Peter Haynes, marketing and business boss at RM Sotheby's, states that scarcity and appeal play a significant role in the prices paid by new generations of buyers. He questions the rarity of cars like the Ford Sierra XR4i and Vauxhall Cavalier SRi, stating that many have been scrapped and are now extremely rare.
This increasing interest in these cars among 30 to 60-year-old enthusiasts is a generational trend that has been happening over the past 10 years. In fact, a Ford Escort RS 1800 sold at auction in July 2021 for a record £276,848.
However, not all modern classics are seeing a surge in value. John Mayhead, editor of the Hagerty Price Guide, suggests that the market isn't as buoyant as it may seem, despite recent high auction results. Only 70% of cars in the Hagerty Price Guide increased in value during the past year.
The post-Covid rush to buy and the increase in online auction sales have driven prices to new heights, but many have since fallen to more affordable levels. The 2009/10 scrappage schemes have made many surviving cars more desirable, often to people who justify spending over the odds using "man maths". Adjusted for inflation, the 2015 Ford Escort RS 1800 would have sold for £118,800 in 2021, a far cry from its record-breaking auction price.
People are buying cars they most identify with, at all price points, according to Peter Haynes. Whether it's the nostalgia for a childhood favourite or the allure of a legendary race car, the love for modern classics continues to grow.
In 2015, a similar Ford Escort RS 1800, rally-driven by Ari Vatanen and Roger Clark, sold for £85,500. The value of these iconic cars has undoubtedly skyrocketed in the past six years, reflecting the changing dynamics of the used car market.
As the demand for modern classics continues to grow, it remains to be seen how the market will evolve in the coming years. One thing is certain, though: these vintage cars are more than just vehicles; they are pieces of history, cherished by their owners and collectors alike.
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