Classic and Collector Car Values: Is inflation a concern?
Inflation is the ghost currently haunting economies worldwide.
How does inflation affect the classic car and collector car market? What are the advantages and disadvantages for buyers and sellers in today's market?
Let's start with a simple definition of inflation.
Inflation - A Definition
Put simply, inflation means the declining purchasing power of money. The price of goods and services increases, and the value of money falls.
There are three basic causes of inflation:
- Demand for products and services exceeds supply
- Increased supply of money
- Increased costs of productions
For October 2021, the average inflation rates in the largest classic and collector car markets were as such:
- 6.2% - United States
- 4.5% - Germany
- 4.2% - United Kingdom
- 3.4% - Netherlands
- 3% - Australia
- 3% - Italy
- 2.6% - France
- 1.2% Switzerland
Inflation and its impact on vehicle prices
After the global shutdowns caused by the coronavirus pandemic, we are experiencing an increased demand for products and services in 2021. This increased demand is responsible, among other things, for the higher inflation rate we see now. In times of rising inflation and the devaluation of money, people traditionally invest their money in more tangible assets such as gold or real estate. Classic and collector cars are enjoying an increasing popularity, not just now but for many years, as an investment in leisure activities and sometimes as a kind of “side-by-side investment”. However, if you want to invest your money in cars, you have to have a certain amount of know-how and consider criteria such as the number of items produced, the original condition or the completeness of documents to prove the car's history.
The devaluation caused by inflation is currently leading to increased demand for vehicles on both sides of the Atlantic. Since the purchase prices for some car models are rising (supply and demand determine the price), many potential first-time buyers or enthusiasts are now asking themselves whether a purchase is currently worthwhile or if it is better to wait. One important fact to remember is that the number of classic and collector cars will not increase because vintage cars are no longer being built. A sudden drop in prices due to a significant increase in supply is not likely to happen, so prices can be expected to remain stable.
Is it worth buying a classic car now?
You alone decide whether it is worth buying a classic car. You can take your time and hope that some prices will come down, but your money will continue to lose value due to inflation if not invested.
Yet one thing will always be true, buying a classic car is different from most other investments as it brings with it the joy of driving a piece of history and the feeling of being able to travel back in time when you get behind the wheel and start the engine. It is unique experience that few other investments can provide.
For questions or assistance on the subject of buying and importing a classic car from the USA, you can reach me at any time by email or phone.
Business Development Manager
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