Guide to Buying a Classic Car
All You Should Consider Before Purchasing Your Dream Classic
What is considered a classic car?
This is a moving target, with cars produced as recently as the Nineties considered classics in certain quarters. In the traditional sense a car attains classic status if it fulfils the basic criteria of being both old and desirable.
Your neighbour may call his mid-Seventies Austin Princess a classic and he would be manifestly wrong. But cars like the Lancia Delta Integrale or E30 BMW M3, built into the Nineties, enjoy classic status due to their scarcity and performance credentials. Ultimately only you can decide if the car you have your eye on is a classic. And it’s worth remembering that subjective element if and when you come to sell.
Why buy a classic car?
Broadly speaking there are two schools of classic car ownership. The first is the enthusiast, who wishes to drive their car and tinker with it. The second is the investor, who has the expectation of seeing their values rise.
Owning a classic car can be incredibly rewarding and equally frustrating. It can also be financially shrewd and occasionally expensive. If you intend to use it, can you afford to maintain it, either personally or through a third party? If you intend to store it, remember that it will still require basic annual maintenance to prevent it deteriorating. And is it actually going up in value? More on that below.
The Classic Car Market
The classic car market is in a constant state of flux, but appreciation of older cars has never been healthier and values are strong. They are, however, not what they were two or three years ago.
The vendor will set his price based upon what else is around, but asking prices are not always realised. As much as a classic car costs what the owners wants for it, that same car is only worth what someone is prepared to pay for it, no matter what has gone before.
Are Classic cars an investment or not?
The rarest and most highly prized cars will always be a good investment, but those shoo-ins are beyond the reach of the average enthusiast and a sizeable undertaking for even the most committed investor.
The more common classic, from humble MGB to air-cooled 911, will require patience to turn a meaningful profit. Generally speaking, gone are the days when you could sit on a car for a couple of years and watch its value double. Today you are better off enjoying your classic, or carefully storing and forgetting about it.
Cars that hold their value
Within reason, all classic cars hold their value, as long as they are adequately maintained. It is surprisingly easy for cars to deteriorate in storage, however, and what ‘ran when parked’ soon becomes an ‘easy summer project’ if left unattended.
Classic cars benefit from being driven at frequent intervals, or expertly mothballed with allowance for some recommissioning at the end of their hibernation.
Much like the housing market, classic cars depend upon a certain degree of buoyancy and optimism, and conversely they are similarly exposed to wider economic recession and a lack of consumer confidence.
A spike in values such we have witnessed recently is frequently followed by a relatively static period in the market while owners slowly adjust their expectations. There is plenty of independent advice available, particularly from owners’ clubs and classic car publications, and it is striking how different these suggested values can be from the prices being asked by private and trade vendors.
The K500 Index is a good resource to keep up with market trends for collector’s cars, from the latest must haves such Porsche 918 Spyder and P1.
Where to buy from?
As with a more modern car, there is a degree of caveat emptor in all of this. If you buy from a recognised dealership you might pay a premium over a private sale, but for that you can expect some security in regards to what you are being sold.
If you buy from an auction, you might grab a bargain but you are buying ‘as seen’ with no comeback if disaster strikes. Similarly, any private seller is unlikely to be interested that the engine has detonated on the way home from his or her house.
Where possible arrange an independent inspection of the vehicle. It will cost a few hundred pounds and potentially save you thousands. If the vendor isn’t keen, ask yourself why.
Terrifying as it may initially seem, buying and importing a classic car from abroad has many benefits. A surprising number of cars arrive here from North America every month, where prices remain low on more common or garden cars and the exchange rate is still favourable. But do your homework. Even classics are subject to import duties and a percentage on the purchase price. If the car is over 30 years old you will only pay 5% VAT. Under 30 years and that rises to 20%.
Then you have to factor in shipping itself, and all this on top of an unseen purchase. There are companies that will handle the process for you from top to bottom, but once again, at a significant extra cost.
Cars are simpler and more affordable to import from Europe prior to Brexit, with no VAT or import duties liable, but they are usually more expensive to purchase in the first place. Bringing in cars from Japan is also a popular option, bolstered by the benefit of righthand drive being the national norm there. The process is more complicated than that of US imports, but there is plenty of advice available from recognised motoring bodies and HMRC.
Is there a best time of the year when to buy?
Legend has it that the best time to sell a classic car is in the spring, trading on the romantic notion of warm summer evening drives with the top down. So it stands to reason that the best bargains are to be had at the start of winter.
It’s unlikely that a dealer is going to make meaningful allowances for the seasons, but a private seller might be glad to see the back of a car heading for the garage for another six months, only to emerge with new problems the following year.
How to inspect the car?
Unless you have a reasonable amount of experience with older cars, an independent pre-purchase inspection is invaluable. Owners’ clubs will be able to connect you with marque-specific experts, in many cases from within their own close circles, who will know exactly what to look for.
If you are prepared to take on the decision alone, be mindful that all that glitters is very rarely gold in the classic car world. Do your research about the weak points of the car you have in mind – specific cars have a tendency to rust in certain places, often undetectable until major structural repairs are required.
Look for what needs replacing, or is likely to in the near future. Is it a readily available part? Even comparatively modern cars, if built in low enough volumes, can prove challenging to source parts for. Once again, owners’ clubs may be your best resource, so consider checking with one before you proceed.
A lot of older classics have patchy history. This is to be expected and, unlike with a modern car, shouldn’t be a deal breaker so long as there is some recent evidence of service and maintenance. Most vendors will reveal the expenditure they have lavished on the car, if only to justify their asking price. If they have little to show, adjust your offer accordingly.
In the instance of rare and unusual cars, provenance is more important. Approach the sale with a degree of scepticism. Is this a genuine factory V8, for example, or has it been fitted with a later engine? Has an ordinary series car been retrospectively altered to look like a lightweight special? There are plenty of cars in circulation that are not all they seem, so do your homework first, talk to the vendor and consult an independent expert if needs be.
If the car is a driver, ask to take it out for a spin. Speak to the owner ahead of your visit and if it is a private sale, arrange your own fully comprehensive cover. A test drive will reveal far more than a passenger ride, not least of which is how you get on with the car.
When it comes to making an offer, only you can know how much you are prepared to spend, but set yourself an upper limit and stick to it.
The results of a professional inspection will help negotiations if they provide evidence of necessary future expenditure, but ultimately the vendor holds the cards and may be unwilling to budge. In most instances, however, they will be keener to sell than they might let on and a deal can usually be struck. Be firm but polite and be prepared to walk away.
Things to consider
It’s easy to be seduced by apparently affordable classics in the classifieds, only to bring home a money pit.
Make sure that you have funds available for maintenance, a figure that will vary wildly from marque to marque but that will never be cheap unless you are willing and able to pick up a spanner yourself.
Cars that are sold as ‘projects’ are in abundance these days and often appear as the result of someone else losing momentum or realising the job is just too big for them.
A full restoration is not something an individual can usually manage, and as soon as you start paying a third party to carry out major works the bills mount up. Even if panels or parts are cheap and available, the sort of specialist labour required to fit and finish them is unfailingly expensive and very quickly a cheap classic can get into the automotive equivalent of negative equity.
Not buying a non-runner is a good place to start, as is the presence of an MOT – no longer required for cars that are 40 years old or older, but a good benchmark of general maintenance nonetheless.
Insurance and additional costs
Insurance for classic cars is generally extremely favourable, based upon the fact that you are unlikely to be driving your car frequently or over any great distance.
Limited mileage polices are available from a wide variety of specialists, but it is worth taking the time to ring around for the most competitive quote.
Many of these policies will include some form of breakdown cover, but check the details. You will want a comprehensive plan that includes home start and unlimited roadside recovery.
The availability of parts is a major consideration when entering into classic car ownership.
Many of the larger marques have impressive resources of old or ‘new old’ stock, and it is usually possible to track down anything, given enough time, resource and expenditure. But more obscure manufacturers, and especially cars built in limited numbers, can catch out the incautious. Again, owners’ clubs can be helpful in sourcing scarce parts, and it is not uncommon for members to group together to mitigate the expense of having certain essential components remanufactured.
You’ll have noticed by now just how many times owners’ clubs get a mention. This can and perhaps should be your primary source of support for classic car ownership. Highly knowledgeable and usually very approachable, these clubs offer very specific advice, fine-tuned over years of personal experience. And they are in it for the same reasons you probably are, so the advice you’re getting is good, impartial and free.
Do not discount the internet, however, where there are many useful owners’ forums and video tips on repairs and maintenance, but treat the information you acquire here with a little more circumspection.
Unless your classic is going to be in near daily use, it advisable to garage it. Cars left out in the elements deteriorate at a remarkable rate when not driven, and can quickly become a source of anxiety rather than pleasure.
If you do not have a garage, explore car storage facilities local to you. The right set up will come at a cost, but for that you can expect far greater security and peace of mind.
There are two main choices when it comes to moving cars on. You can sell privately, off your drive, or put the car into an auction.
The private sale will enjoy less foot fall, and you are wide open to time wasters, but the figure you eventually agree is just that.
An auction house will have fees to consider, and those attending the sale will invariably be looking for a bargain so you may not achieve the best possible price, but it is here that you have the greatest chance of a quick sale.
Before you buy
What constitutes a good buy depends to some extent on what your intentions are. Do you hope to use the car frequently? Are you buying it primarily as an investment?
Halo marques such as Aston Martin, Ferrari and Porsche have seen exponential price rises over the last few years, but the market appears to have levelled off. Good cars, well maintained, will always hold their value, and patience will likely see a reasonable return.
If you want to have a bit of fun, keeping it cheap, simple and British is a sound way to start. Triumphs and MGs are straightforward to fix and usually easy to find parts for. A serviceable MGB Roadster can be had for less than £10,000 and has the capacity to provide years of stress-free driving with a basic level of care.
Buy German for better reliability. Classic Porsche 911s are currently commanding high prices considering their ubiquity, but peerless build quality and an enviable pedigree makes them remarkably useable and a solid investment. A Seventies ‘SC’ can be picked up for under £30,000.
Be very wary of older Italian exotica, especially anything that doesn’t have an exemplary service record. The likes of the Ferrari 308, an affordable entry point into classic supercars at £40,000, was high maintenance when new and will need regular, specialist care today.
If you want to speculate on the classic car market for investment purposes, time is the key today. There are very few quick profits to made anywhere, so buy carefully and be prepared to wait it out.
Spotting ‘the next big thing’ is a game of chance and there is every likelihood that values for all but the most desirable cars will level off in perpetuity. But with increased automation, digitisation and electrification, anything that evokes the spirit of vintage motoring will have its devotees going forward. Buy with a mixture of head and heart and you can’t go too far wrong.