As we approach the end of 2022, most observers and enthusiasts from the classic and collector car scene can agree on one thing: it has been a year like no other in recent memory.
We’ve experienced soaring living costs, rollercoaster-like exchange rates between the British pound and other currencies, and the first land war in Europe for thirty years. That, and the UK is still coming to terms with leaving the EU single market and all the new red tape that entails. These have impacted much of what we once took for granted in the motoring world, from fuel prices to parts availability, travel to buying a selling cars abroad.
Against that backdrop, it would be tempting to think things are bleak for the car hobby during this gathering recession. But let’s not be so hasty. The year has been challenging on many levels but we have also seen record sales and signs that the hobby is in good health. Let’s peer a little deeper into 2022…
Nearly every metric increased
From the price of the most expensive car on the planet (the £115 million Mercedes-Benz Uhlenhaut coupé, sold in Germany in May) to the number of people accessing the Hagerty UK Price Guide (up over 12 per cent), 2022 was a bumper year.
Auction sales rose, too. Hagerty tracked over 15,500 UK classic and enthusiast vehicle auction lots this year, up from 14,000 in the same period in 2021, an 11 per cent uplift. The total value of auction sales rose from £270m to £303m, around a 12 per cent increase.
Why might that be? Our analysis suggests that recessions often encourage people to spend money on cars as they search for a release and somewhere tangible to put their money, and this time seems no different. The only slightly worrying sign is that, towards the end of the year as interest rates grew, auction houses told us that their sellers were more likely to set lower reserves than they had been previously, especially at the enthusiast (sub-£50,000) end of the market. Even so, we still saw the overall average auction sale rate drop slightly, down from 79.3 per cent to 76.2 per cent. As the cost of living continues to be felt, it is not surprising that sometimes the car in the garage may have to be sold and funds freed up for other priorities.
The top of the car market is booming
There’s no getting away from it: while many car enthusiasts have been tightening their belts, many wealthy individuals are seeing the oncoming recession as more of an opportunity than a threat. Inflation, interest rate rises (with more forecast) and a strong dollar/ weak pound have combined to make UK collector cars an attractive place to put money.
That said, Hagerty’s analysis hasn’t shown an increase in pre-1990 cars shipped from the UK to the US; we believe that export costs and taxes mean that it’s more sensible for many overseas collectors to leave their cars here and use them during trips. Feedback from storage companies support this.
Some heavyweight car collectors have sold
This year, Hagerty have observed a number of big collections come onto the market. The Gran Turismo collection offered at the RM Sotheby’s London auction in November was the most remarkable: 19 of the most collectable modern-classic supercars including the whole Ferrari halo car set of 288 GTO, F40, F50, Enzo and LaFerrari. No less than six of these cars featured in the top ten of all cars sold at a live public auction in the UK this year, and the collection netted around £22 million for its previous owner, a well-known UK enthusiast.
Less valuable but no less remarkable was the Bavarian Legends collection, also sold by RM Sotheby’s in November, this time in Munich, Germany. A total of 32 exceptional BMW cars were offered by a notable Hong Kong collector, with 19 of them selling for at least double their low estimate. One of the most incredible was a 2752-km from new 1997 E36 BMW M3 Evo that sold for £247,000, almost ten times Hagerty’s top value of £25,700. So, why have these and a few other collectors parted with their cars? The view is they are freeing up cash to buy other things, maybe cars, maybe property if they believe bricks and mortar is falling enough to become attractive when weighed against any future recovery. Despite the impressive nature of both of these major collections, we believe that the collectors own a number of even more remarkable cars; these, believe it or not, were the ones they felt they could replace if needs be in the future.
Mileage matters…
As we saw with the BMW E36 M3, modern collectibles with ultra-low mileage have been keenly fought over and often achieved extraordinary prices. Cars in this category as diverse as a 2010 Ford Focus RS500 to a 2009 Mercedes-Benz SLR McLaren 722S Roadster broke records, the first selling for a huge £99,000 at Silverstone Auctions in November, Bonhams selling the latter for £679,166, more than double top estimate at the Goodwood Revival Sale. These cars don’t even need to be driven, just stored and sold again in a few years’ time, making them very attractive to anyone who wants the ‘investment’ of a car without the hassle of actually driving it.
Celebrity provenance adds sparkle – and value
As Hagerty showed when it published its first Power List earlier this year, celebrity ownership can add a huge amount of value to a car. In 2022, there have been some great examples of this. A rather unloved 1974 Rolls-Royce Silver Shadow (Hagerty Price Guide around £10,800) sold for a massive £286,250 thanks to its first owner being Freddie Mercury of the band Queen. In September, Christie’s sold an Aston Martin DB5 replica, a stunt car used in the James Bond movie No Time to Die for £2.9m, ranking fourth on our top 10 of public live auctions, the first time a replica has appeared on the list. Then, most impressive of all, a 1985 Ford Escort RS Turbo that had been built by Ford’s Special Vehicle Engineering department for Diana, Princess of Wales, sold for £722,500. Needless to say, it was the talk of the car crowd. This was Ferrari Daytona money for a Ford Escort, and nearly 20 times Hagerty’s top value for the model of £35,400.
Competition cars are still on pole position
The most expensive car sold at UK public auction in the UK was a racing car: a 1960 Ferrari 250 GT SWB Competizione sold for £7,762,500. For the second year in a row, an Audi Sport Quattro also appeared in the top 10, joined by another rally legend, a 1985 Lancia Delta S4 Group B car. Formula One cars have also been crossing the block a lot this year, including an absolute racing gem of a car: the Ferrari F2003 GA that was driven by Michael Schumacher to five victories during his sixth championship-winning year in 2003. It sold in Geneva for 14.63m Swiss francs, around £13m. That said, there are F1 cars and F1 cars… Only those with the right drivers and performance attached will gain high prices: two Force India cars sold at this year’s Revival made £78,000 and £69,000 respectively. Those will never be worth millions. What does Hagerty forecast? Just as Mercedes-Benz saw an opportunity in selling one of the gems of its heritage fleet, maybe this will prise a few more really special F1 cars out of other manufacturers’ collections.
Drivers just want to have fun
Hagerty believes that one reason why ultra-rich collectors prize competition cars so highly is that they give them access to the very best events on the planet. Those that crave a VIP invitation to world-class events such as the Mille Miglia or The Amelia can help their case by owning a very special racing car that was once piloted by an ace driver.
And as we know, everyone loves a good show. In 2022, Hagerty held three keystone events for car enthusiasts: the Festival of the Unexceptional, a celebration of base model cars that used to be on everyone’s driveways; the Hagerty Hillclimb at the historic Shelsley Walsh course; and RADWood, for a trip back in time to the excess of the '80s and '90s. Elsewhere, we partnered with new events including the Savile Row Concours in London, and we dispatched judges to the Valetta Concours, in Malta, Salon Privé and the Goodwood Festival of Speed. All were extremely well attended and our feedback was enthusiastic.
At a time when extraordinary challenges are facing a huge number of people, if you set aside the numbers and trends it comes back to this: cars give us freedom, they give us pleasure, they give us community. Long may it last.
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Thank you.fascinating comments