I have a thing for old cars. It doesn’t matter what kind of fuel they use. I just think old cars are cool. Old electric vehicles are obviously the coolest of cool, like the 1913 Detroit Electric I experienced last year. Internal combustion engine vehicles are irrational in the grand scheme of the planet Earth as a lab test chamber, but this story is not about rational thinking and how the world is going electric because of geniuses thinking from first principle perspectives and saving the planet. Let’s go out on a limb and talk about that ever-present driver of classic car values: emotions. The love of old, stinking, politically incorrect fossil fuel burning cars, which paradoxically may be linked to the EV revolution.
EV Demand Through The Roof
I have been writing my share of articles about electric cars, and my main motivation in recent years has been that I was not at all certain that the world would actually transition to 100% electric vehicles sales any time soon, so I wanted to push to make that happen. However, the recent boom in EV demand has come about so fast I can hardly keep up. The shift is happening right now, and the main indicator of this is demand. Everybody is either wanting or talking about EVs.
Within a single year, demand for battery-electric vehicles has gone through the roof in my country Denmark as well as many other places, and supply has no chance of keeping up. Waiting lists are getting longer and prices go up. So what can you do? When I listen to friends, family, and neighbors, and to my son who works at an auto shop that sells and services used vehicles, the narrative is almost unanimous: Our next car will be electric. But due to constraints in affordability and availability of EVs, the old cars are not all being scrapped as fast as they used to, because they are getting more valuable while you wait. Fewer want to buy a new ICE car for the sake of it just being an interim utility of a year or two.
For The Love Of Cars
I got this feeling while renovating an old Volvo 240 back in 2018, that certain cars built with durability in mind would appreciate in value despite the electric revolution, and sure enough, since then my old Volvo has steadily increased its market price. Therefore I have now started collecting more old classics, and while doing so the classic car communities and magazines are putting out an increasing number of stories about projects with more ordinary classic cars that are intended for daily use.
When I say projects, I don’t mean electrification of classics. That’s another business segment altogether, in its own right. It should come as no surprise that a Tesla-powered VW Golf GTI is not all like a VW Golf GTI. It’s a whole other beast entirely. Here we will focus on the originals only.
Beautiful old Mercedes-Benz 300s, Volvo 760s, Ford Granadas, Saab 900s, Peugeot 504s, and many others begin to appear in more numbers in the streets, and the auto shops that were anxious that their business would get hurt by the electric revolution are, at least for now, seeing increased demand for repairs on older cars that people drive while they wait for the right electric vehicle model to be available. Because demand for EVs is so strong, you have time to consider what old cars you like, and which one you would like to keep as a classic when the electric transition is over, for you personally at least.
So the sentiment is a bit like this: Oh, we want an electric car, but the wait time is long, and the price is high, so in the meantime we save up and get that old beautiful car we always wanted. In my opinion, the German, British, Italian, French, and Swedish sedans from the late 1970s and into the 1990s are just gorgeous. Not necessarily beautiful, though. Beauty is in the eye of the beholder, and quirky can also be a kind of beauty right?
You Have One Decade & Then It’s Over
But wait, isn’t everyone going to be driving EVs in 2030? No. Remember Tesla’s audacious goal of making 20 million EVs a year by 2030? That would displace 1% of the global fleet per year. Throw in a bunch of (surviving) legacy automakers and let’s say the supply chain of batteries, especially, can keep up with 50 million EVs per year in 2030 and we would still be knocking on the door of the year 2040 before vehicles with internal combustion engines will be as rare as EVs were in 2020.
So my point is that the market for classic, solid, beautiful, well-kept older ICE vehicles of all sizes will have a golden decade, and after that rise in classic car values, why would you scrap them? Unless they are worn out or crashed they will represent over a century of mainstream automotive history, and even the smallest and quirkiest of vehicles will have their place. In the magazines and at shows I see this happening already, with the rising number of Citröen 2CVs, Renault 4s, VW Golfs, Peugeot 205s, Morris Minis, and the list goes on and on.
I have owned a number of these old crappy vehicles and never in my wildest dreams imagined that had I just kept them safe I could have cashed in on them by now. Alas, classic car values are already climbing fast. I saw a Fiat 127 for sale today for the total I paid for owning 4 of them 20 to 30 years ago. It’s unreal! But truth be told, there was not much to keep, they all ended up crashed or as heaps of rust. It’s a game of survival of the fittest. And speaking of crashing, please be aware that old cars are not as safe as new cars. Buckle up and stay alert. Thank God for the advent of autonomous vehicles that won’t rear-end your 1965 Ford Anglia Sportsman without headrests and break your neck.
So, should you rush out and buy old classic right away? No. Apart from the safety issue, it takes trading skill, luck, and knowing a handful of very skilled craftsmen, because let’s face it, not many can do rust, engines, and paint in their own garage, not with a solid result at least. I’m an idiot at these things, so I have teamed up with a few experts. When I go look at say, a cheap old Mercedes-Benz series W124 from the 1980s that has a lot of rust, I consult with my rust expert and do the math. If you don’t know what you are doing, or at least don’t know someone who knows what they are doing, you can lose out big time. But if you find the right model, with a well established supply chain of spare parts and take extra good care of it, you could be looking at having your first vehicle being an appreciative asset.
My daily driver is a 2019 Tesla Model 3, so from an environmental perspective this is all easy for me to say. I don’t have to wait anymore. I have been enjoying low emissions and low maintenance costs for almost 100,000 kilometers now. I have prioritized to get the bulk of my mileage electrified as soon as possible, but it’s far from too late thinking about using a classic to bridge the gap between your current vehicle to you future EV. Buy time. Be creative. Have fun.
Things That Are Fun Create Demand
This situation of very sudden and crazy fast growing demand for EVs is changing the vehicle markets in ways it’s impossible to predict, so while you have to keep calm trading stocks and crypto, you have to also engage your emotions when trading classic cars. I started all this by a huge mistake thinking that I could convert that old Volvo 240 into an EV, but failed and salvaged it to its original state instead. Now, with a handful of classics in my garage, I get more and more attention, and its another kind of attention than those who can afford collecting Ferraris and Porsches get.
Last year, my 1987 Volvo was in its first casting trial for a series on one of the big streaming services, and this week the Volvo and my 1997 Lancia Kappa is performing in a new TV series for the Danish national broadcasting service. That’s a lot of fun, and a total surprise to me.
When I went to get a checkup on my Volvo, my mechanic was happy to see a “new” car that day, since he was struggling getting spark plugs for a 50-years-older 1937 Citröen Traction Avant, and he told me the owner actually used it as a daily driver! I mean, that is commitment all day long.
The seemingly pent-up demand on classic cars can originate from a multiple of factors, like extra disposable income, rise in online auctions, and time at home under Covid restrictions to dream of tinkering, but as I said, I think there is another looming catalyst in the fact that the demand for daily driver EVs is exploding, thus triggering the notion of acquiring that old dream car, drive it until the EV is in the garage, and then keeping the old dinosaur as a treasure to show off on a sunday cruise.
According to UK-based Hagerty’s classic car insurance business arm, an area of the market getting increased activity is desirable cars from the 1980s and 1990s. Nearly a third of the quotes issued in April 2021 were for vehicles from that period.
In an interview on Autocar UK, John Mayhead, editor of the Hagerty UK Price Guide, said: “The difference between this boom and past ones is that enthusiasts, rather than speculators, are the power in the market. They’re buying the cars that they love and remember from growing up, rather than buying them as commodities. For this reason, we don’t believe the market will get overheated.” And he added a subtle warning: “Sellers who are realistic will get good results, but speculators may be disappointed. The market is moving from speculators to enthusiasts who are cannier with their money.”
Spot on. And I think that precisely because we talking enthusiast rather than speculators, these cars will be driven much more on a daily — or perhaps weekly — basis. You would think twice about driving vehicle commodities like low mileage small production series Ferraris. There is love of cars, and there is love of driving cars. In my own collection, it is a must that they are ready to roll at any given moment. Yes, that will cost a bit more in insurance and taxes, but I want my classics to be experienced and not only looked at. Oddly enough, some models, like old diesel Mercedes sedans from the 1970s and 1980s that were so popular as taxis will appreciate in value if they get beyond 1 million km. Lucky for me, that’s closer than a million miles. But remember, in order for the old hacks to appreciate in value, they must be kept in good condition, which in fact often is the cheapest way to keep them running anyway. You will be doing your local mechanic a favor too.
Facts Or Fantasy?
I tried to confirm my suspicion of a growing trend for the interest of classic cars on Google Trends, with the US as a benchmark, but could not see anything else at first glance other than an unsurprising seasonal swing. The interest for EVs is obviously going up, but then I noticed something interesting:
Look at March 2020 when the world was hit by Covid lockdowns, and how the electric car topic and luxury car topic correlates for a few months, and then the luxury car topic starts correlation with the classic car topic instead, while the electric car topic breaks out. Something to think about when thinking about electric car values in the coming years!
Now, you may think: What about fuel? Older cars often do not have great mileage, and they burn fossil fuels, for goodness’ sake! I wonder, what will happen first: Supply of EVs levels with demand, or fossil fuels are fully replaced by synthetic fuels made by excess renewable energy? Or, worst of all, the classic car values get so high no one can afford them, either way! I’m curious. What do you think?
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