Take a look under the bonnet of the classic car market

It might be going too far to say the wheels have come off the market in classic cars. But prices have definitely stalled. Take the Blue Chip index compiled by specialist insurer Hagerty, for example. It tracks the prices of 25 of the most sought-after collectable vehicles of the post-war era. In the decade to January 2025, the index rose 5.5%. But in the six years before 2015 – that is, from the start of the ultra-low interest rate era – the index jumped 118%. So we can take a good guess at what got prices motoring and, by extension, what has put the brakes back on.

Since January 2022, roughly corresponding to when the Bank of England picked interest rates up off the floor (0.1%), the index has only managed a 2.6% rise, lagging the annual rate of consumer-price inflation, which averaged 6.3% in that three-year period. It should come as scant surprise, then, that in the 12 months to the start of 2025, the index contracted 2%. A considerable amount of froth continues to come off the market.

But that is to paint a picture using a very broad brush. Collectables markets are notoriously hard to track because, for starters, no two Ferrari 250 GTOs are exactly the same. There are also so many different makes and models of collectable cars that it would be impossible to follow them all – hence the Blue Chip index limiting itself to 25, for example.

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The sample size, the number of sales in a given year, is likely to be small, and within the components that make up the index, you are bound to have a relatively wide range of performances. One model might appreciate greatly, only for that performance to be obscured by the other 24.

The classic car market is for choosy collectors

If we look under the bonnet of Hagerty’s Blue Chip index, we see that the value of a 1958 Bentley S1 Continental DHC in “excellent condition” (all the cars ranked in the indices are rated “excellent”, the second highest of four categories) slipped 19% over the course of 2024. Today, you could expect one to fetch approximately $850,000. Likewise, you could have anticipated paying $2.6 million for a 1970 Plymouth Hemi Cuda convertible in January, a 15% discount to the price a year earlier.

But for a 1971 Lamborghini Miura SV, you would have had to pay a third more than in January 2024: $4 million. So collectors buying a classic car as an investment need to be particularly picky as to which model they buy – and that is before storage, maintenance and insurance costs are taken into account.

Some car indices have managed to eke out a gain over the year to January. Hagerty’s Supercar index rose 2%, led by the 1994-1998 McLaren F1, whose value rose 5% to $25.4 million. And post-war German collectible cars were worth 1% more than a year earlier, with the price of a 1979 Porsche 911 Turbo Carrera coupe accelerating 19% to $185,000. But of Hagerty’s 11 indices, seven declined and one trod water. American muscle cars depreciated 10% over the year, and the Ferrari index slid 9%.

Nevertheless, a 1962 Ferrari 250 GTO Berlinetta (not included in the Ferrari index) became the most expensive car sold at auction in 2024, when one example sold with Bonhams for $38.1 million last August. In fact, seven of the ten most expensive cars ever sold at auction (going back to 2014) are Ferraris. These may be extreme, ultra-rare examples, but clearly Ferraris are still very much in demand. The fact that the prancing horse has its own index rather underscores the point, so a pinch of salt is needed.

The rarest cars continue to fetch stratospheric prices. In February, a 1954 Mercedes-Benz W 196 R Streamliner joined that top-ten list in second position, when it sold for €51.2 million. But this is the rarefied region of the market, which by and large, and in keeping with other collectable assets, such as blue-chip artworks, tends to be oblivious to whatever else is going on in the economy.

As for the “collector car” market overall, it “has been uneven for the past several years, with auctions recording lower average prices and private sales activity slowing”, says Brian Rabold of Hagerty. So choose what you buy carefully, and buy it because, first and foremost, you like it.

Classic cars sold privately in Britain tend to be “sold as seen” and there is “little [legal] protection for any purchaser”, says David Stedman, a lawyer specialising in classic cars at law firm Clarke Willmott LLP. If buying from a dealer, your statutory rights are set out in the Consumer Rights Act. Cars first registered more than 40 years ago are exempt from MOT tests, so if you intend to drive your classic car regularly on public roads, make this clear to the seller.

A classic car could be advertised as a “collector’s piece”, in which case the car cannot be expected to be road-ready. Courts will also consider how much was paid for the car, with the understanding that “a purchaser paying less for a restoration project cannot have expected the vehicle to live up to ‘concours standard’,” says Stedman. So, state your intended use for the classic car to the seller and inspect it before you buy it “with your mechanic present”.

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