A couple of years ago I wrote a blog on the RetireEasy site concerning Classic Cars, a subject dear to my heart, and the unsustainable prices that were being asked AND paid. I said that when the stock markets started to recover and interest rates were on the rise, this particular bubble would burst. Well, the World’s stock markets are still floundering and western nations all still have sub 1% interest rates.

And classic car prices have continued to rise, so I was partly right but mostly wrong. I would still make that prediction if and when markets start to move, but in the meantime there have been some significant changes in the structure of this market. For most high end models such as 50’s and 60’s Ferraris and Aston Martins records continue to be broken, although the recent auction of an Aston DB4GT Zagato did not quite reach the giddy heights predicted, as was the case with a Ferrari 250GTO last year.

Also, at the lower end of the market classics such as MGBs and TRs have not risen significantly; and E-Types have probably only risen by 10% over the last two years, apart from the very best.

It seems that the most gains have been seen in the area of the ‘minor’ exotics (and no, I don’t mean Morrises). I believe that these gains have arisen because there are a lot of wealthy people out there who cannot stretch to a GTO or a Mercedes Benz 300sl and have been looking at their slightly less exalted siblings, not always boosting the prices of worthy or particularly rare cars. How else do you explain dealers asking £150,000 plus for a Mercedes Benz 190sl – never considered one of Merc’s finest since it was underpowered, did not have fantastic handling and had, in my opinion anyway, very dodgy styling!

The Porsche 911 2.7 Carrera RS was always highly valued, but now the relatively run-of-the-mill 911S and 911E are over £200k!! 10 years ago you could buy a pristine early 90’s 964RS for the low £30ks and now they are being offered for up to £250k – a great car in my opinion (I know, I used to own one), but this is just ridiculous. It is only a great car because it handles beautifully and has some exotic components, but surely its value is only relevant if you DRIVE IT! But if you’ve paid that much, you won’t.

Conclusion? Well, even if it would have been OK to buy two years ago, now, with prices even higher, caution would still seem to be the watchword.

And, you can check on the impact of investing in a Classic Car on your finances at Retireeasy.co.uk