How to make sense of the post pandemic pricing of classic cars
An interesting aspect of the pandemic has been its impact of the values of classic cars worldwide. As folks sit at home and are not otherwise spending, they are websurfing and they are buying. The phenomena of online digital sales extended also to car websites and online auctions. Dealers will tell you that the Pandemic has hastened the rise of online sales and prices of classics have on the whole increased and to quote Hagerty it was one of the best years on record:
Median condition values increased an average of 10.26 percent during quarantine (from May 2020 to May 2021). This was the largest single year increase since the September 2011 price guide, when the average increase was 12.53 percent, and the third largest increase since the Hagerty Price Guide began. – Hagerty
But don’t panic.
Not all that glitters is gold
Hagerty also reports that some categories of classics have not moved. American cars of the 50-60s as an example are flat year on year. Condition also matters too. Cars in poor condition are not garnering as much attention as buyers look for point and shoot purchases. Gone it seems is the home project? There is some debate on that but what’s clear is good condition is showing the bigger increases.
That said, a rising tide does float all boats so the broader market is seeing an uptick but make sure you are not wading into your own personal Tsunami or worse a shipwreck. To explain, another phenomena of the pandemic is the flurry of sellers offering cars at inflated prices hoping to cash in on the rising interest in classics and hoping their buyer has not done their research. Classic cars tug at the heart that we all understand but do your homework first and don’t get caught out.
Buying in Singapore
Singapore has not been left untouched by this global phenonena either. It gets confusing in Singapore as our registration fees and COEs make car ownership in the republic amongst the most expensive in the world. It also can appear daunting to try and bring in your own classic so all that to say Its easy then to believe that you need to pay more for that classic just because its in Singapore.
I have a rule to never take seriously anyone who tries to sell with a price that ends in 8s.. it makes me wonder if they are serious. Just my opinion of course but clearly it is unlikely to be a price driven by cost plus a reasonable margin but rather a price driven by appearances and hope. If you see such pricing run. You should not pay $488,888 for something that might be worth only $48,000
Do your research.
Ok so how do I not get ripped off? Do your research is the answer today, tomorrow and forever. Research! There are many more classic cars for sale now in Singapore so the historical issue of an illiquid market is improving and for some cars you may see a few on sale to compare. That wont always be the case so another way is to compare the prices of similar cars overseas. Australia, New Zealand, South Africa and the UK are all right-hand drive markets and all have online classic car websites where values are available. Prices will vary market to market but this does give you a good idea of the base cost of what that car is worth overseas. I say base as bringing the same car into Singapore will add to the cost through shipping, customs, the ARF charges and lastly the 10% COE. The onemotoring.com website outlines the local costs of registering an overseas car. This then gives you the cost of bringing in your own car as a reference point to mark against what the seller is asking and should thus act like a ceiling on local asking values (not a floor). A local car should be less than this.
Last point – don’t be in a rush. Take your time, join a club, ask questions and do your research. Owning a classic is an amazing experience to be enjoyed so take the time to seek advice and be confident that the price you pay is the right price to pay.