Classic cars have been overpriced for years. They don't make sense if you compare a £40k Classic with a £40k new car. Because they are overpriced people think of them as an investment but if ever 'Capital Gains Tax' was introduced on them the prices would drop dramatically. Also they are a luxury so one of the first things to be affected by cost of living issues.
'Classic cars have been overpriced for years'
That is a sweeping generalisation and just your opinion Rob.
Supply and demand dictates commodity prices, basic Economics.
They don't make sense if you compare a £40k Classic with a £40k new car.
In what way doesn't it make sense? Classic car buyers and cars come in many guises, one size doesn't fit all.
Some will be buying first and foremost as investments, some are buying purely as marque enthusiasts and then there is everyone in between.
Some will be buying their 20th car to go in a collection, some will be buying their only car which may even be a daily runaround.
Why would you compare it with a new car? Chalk and Cheese. If you choose to go down that rabbit hole then I would argue that there are many useable classics that represent far better value than any new car in the same price bracket. The cheapest new cars available nowadays are £14/15k for small city cars/hatchbacks that will lose 30% of their value as soon as you leave the showroom. Compare that to a well chosen classic from the 1970/80/90's in the same price range that will not depreciate if you choose wisely and may even appreciate to cover the slightly higher running costs involved in older car ownership and I think classic cars can make very good sense in that instance.
Because they are overpriced people think of them as an investment - ???? that doesn't make sense.
but if ever 'Capital Gains Tax' was introduced on them the prices would drop dramatically.
Why mention CGT. and prices wouldn't drop drastically on the vast majority of classics anyway? It would be far too difficult and costly to administer for Treasury with little benefit. In the tax system cars are classed as 'wasting assets' with a predicted lifespan. Do you not think we already have enough taxes in this country? Also prices go up as well as down so this will never be considered. Imagine all those claims for huge capital losses there would have been from people who lost their shirts on Astons, Ferraris and Jags in the early 1990's. That period was a proper recession and collapse in market prices with losses on single cars running into many tens of thousands and even hundreds of thousands on high end cars.
Luxury items first thing to be affected by cost of living issues - we can broadly agree on that but you will find a lot of buyers are from the more mature age group who are less affected by this often having paid off their mortgages, buying with cash etc
