Following news that the rate of inflation has fallen to its lowest level in almost two and a half years, CCW consulted market experts to see what effect this is having on the nation’s classic sector
The UK’s rate of inflation has fallen to its lowest levels since 2021 – but most classic experts don’t think it’ll make much of a difference for any enthusiasts thinking of snapping up an old car over the next few months.
Working under the assumption that a fall in inflation rates should lower living costs and free up spare cash for hobbies CCW spoke to a number of classic specialists to see what effects, if any, have been noted in the classic sector.
'Classic cars are still a luxury rather than a necessity to most.’
Classic Car Auctions’ marketing manager, Penny Tyler, told CCW: ‘I’m guessing that you could say last weekend’s auction at the Practical Classics Classics Classic Car & Restoration Show might be a gauge as to whether the recent drop in inflation rates has boosted car sales, however it might be too soon to see a difference. It’s not like people’s bills and food shops are going to drop overnight. Classic cars are still a luxury rather than a necessity to most.’
That’s a sentiment shared by CCW’s auctions guru, Richard Hudson-Evans: ‘Personally, I see it as establishment spin. The government and the Bank of England are saying that things are getting better but the inflation rate has “dropped” from four per cent to 3.4 per cent and prices in the real world are still going up for essentials like groceries – and classics are not an essential. The average person remains reluctant to splash the cash, be it on buying a classic, maintaining it or going to shows. The cost of fuel and show tickets has gone up and people remain reluctant to spend on non-essentials. I don’t believe that this is going to make a penny’s difference to the average enthusiast.’
CCW’s markets editor, Richard Barnett, agrees: ‘Inflation might be down but interest rates haven't changed so that won't put people in a buying mood and it doesn't really encourage consumer confidence. The upshot is that people won't want to be getting along to an auction (or using the web) to buy a new classic, especially with the likelihood of a general election around the corner.’
‘The market is still there, and it’s especially telling that there’s still huge demand in the sub-£10k category'
However, those in the trade have pointed out that there is still plenty of appetite, particularly for cheaper buys. Anglia Car Auctions’ Guy Snelling, said: ‘The cost of a tin of beans has little effect on the market. A large proportion of classics are bought with disposable income and a fair number of our customers are retired and benefit from the increased interest rates.
‘The market is still there, and it’s especially telling that there’s still huge demand in the sub-£10,000 category. We’re also seeing a lot of classics being sold because of ULEZ, so London’s loss is Norfolk’s gain. There’s also the fact that owning a classic brings an enormous sense of well-being; it’s good for mental health.’
‘Optimism isn’t yet on the horizon’
Motoring journalist, Quentin Willson, added ‘Falling inflation will help to ease pressure on disposable income but the old car market needs financial confidence and that optimism isn’t yet on the horizon. The 14 hikes in interest rates since 2021 still weigh heavily on the market.’