Demography puts the brake on classic-car values in Britain

When the sun peeks through the clouds, the dust covers come off as the cars emerge from their winter slumber for a brisk drive to shed the cobwebs. Britain’s legion of classic-car owners will soon be getting back on the road. The pleasure may be tinged with concern. Owning a classic car is often justified as an investment, but the market is in a skid.

Last year the values of about four out of five of the classic vehicles tracked by Hagerty, an insurer that specialises in the business, fell or stalled. This follows a steady decline in prices after a brief recovery following the covid-19 pandemic, when people splurged on hobbies. British-built sports cars from the 1950s and 60s have taken a particular hit (see chart).

The prices of some Jaguars were 20% lower last year compared with 2024. For vehicles in “excellent” condition, Hagerty estimates that a 1965 4.2 Jaguar E-Type Roadster is currently worth £63,900 ($87,600) , down by 15% on the year. MGs have declined by around 10%, leaving a 1970 MGB convertible valued at £14,600. A 1962 Triumph TR4, also down by 10%, is worth £19,600. Less shiny cars of all types are worth much less.

As for the vehicles that are still rising in value, many are so-called modern classics. This category includes “hot hatches” from the 1980s and onwards. These are high-performance hatchbacks, like the Renault 5 GT Turbo, up by 7.5% to £19.100; the Volkswagen Golf GTi MkI, up by 6% to around £21,500, and the Ford Escort RS Turbo MkIII, up by 23% to £27,600.

What all this shows, says John Mayhead, the editor of Hagerty’s British price guide, is that Gen X (those born between 1965 and 1980) and younger are becoming more important in the market as baby-boomers (1946-64) age and give up their cars. The poster cars of the younger generations are different from those of older drivers. Buying a classic car has always been something of a middle-aged nostalgia trip, with (mostly) men seeking a vehicle they could not afford in their youth.

This generational shift does not seem to affect the numbers of people enjoying old cars, says Jack Rawles, who at 28 is part of a second generation managing a family-run classic-car garage near Alresford in Hampshire. Mr Rawles, who races 1960s Austin Healeys, believes lower prices will create new buying opportunities for younger drivers to try older cars.

Classic cars have become a big business. There are nearly 2m “historic vehicles”, ranging from cars to lorries and motorcycles over 40 years old, registered with the Driver and Vehicle Licensing Agency. Although exempt from an annual MOT test, they have to be roadworthy and taxed (which is free) if driven on the highway. On average the cars travel only about 800 miles (1,300km) a year, equivalent to 12% for a typical car in Britain, while spending on them contributes £7.3bn to the economy and supports almost 35,000 jobs, estimates the Federation of British Historic Vehicle Clubs.

For the well-heeled, however, the top-end of the market is rarefied and driven by speculation. Hagerty reckons that around 80% of the vehicles being bought by its biggest collectors are now supercars from the 1990s and later, such as a Ferrari F40 (worth £2m or more) or a McLaren F1 (about £17m). These cars are likely to remain in their dehumidified garages because they are rarely, if ever, driven. They have become automotive objets d’art, and not much fun at all. ■