While insanely high interest rates contributed to the 1990’s decline in classic vehicle values, the reverse applied during the following decade. Collapsing rates during the mid-2000’s, allied to rising property values saw buyers access home equity to fund a ‘hobby’ car. That was all to end in tears as well.
Stories emerging from that time include bags brimming with cash being offered to owners of high-end vehicles at car club events. More sinister were tales of owners who would turn into strangers’ driveways or visit the police station to shake a ‘tail’ that was following their trophy-winning car home. One nervous owner walled a valuable car inside his house then had to pay more money to have it extracted during a divorce settlement.
Blame for the sudden reversal in values has been levelled at the 2008 Global Financial Crisis, but by the time its effects were felt, the market was already in decline. For several years afterwards, values remained steady but then rumours spread about car production in Australia being under threat.
Sure enough, announcements followed from each of the nation’s surviving vehicle manufacturers, confirming that Australia by late 2017 would no longer have a car industry. Panic ensued and demand for locally made cars of all ages and types sent prices to levels not seen in a decade.
The money being sought and paid during 2015 for GTS327 and 350 Monaro’s had remained stoically below $100,000. Throw in the news that Holden production was going to end and those averages by 2017 had topped $250,000. Some cars that had been heavily promoted prior to auction sold for more.
Iconic models on the world market were also on the move, with new record prices established then reset within months. People living in hope of owning a Tier One collector car sadly shelved their dreams, only to have hope reignited by a most unusual set of circumstances.
Entering 2020, global economies were stuttering and anyone with cash in the bank was on track to snare a bargain. The age of the Million Dollar GTHO was firmly in the past and quality cars were struggling to attract owners. Then came The Pandemic.
Global responses to Coronavirus have been mixed, however there is little doubt that a major recession affecting all developed economies will result. The market for specialist vehicles was during May in limbo and auction sales remained closed or had moved exclusively to on-line operation.
Until reliable price benchmarks in an altered environment are established it is impossible to say what effect the change in selling formats and economic circumstances might have. A short-term decline in older vehicle values is almost inevitable, however this could be countered by owners withdrawing vehicles from sale until a more confident market returns.
In the longer view it will take the most massive economic or environmental hit in history to severely affect demand for older models. These cars are typically used very little and there will always be a flutter of nostalgia in the belly of envious onlookers as one glides past.
If you own or want to buy a special vehicle then take a look at Enthusiast Insurance’s ‘Drive Less…Spend Less’ policy. As the description suggests, this cover will save money the less your vehicle is driven. For a quote on new cover visit our website www.enthusiast.com.au for a Quick Quote. If you need to add a vehicle to an existing Enthusiast policy, phone Enthusiast on 1800 10 10 44.