Hagerty. “The Coronavirus … the Collector Car Market. ” John Wiley. March 2020.

at all levels. However, as we go into in more detail later in this report, the data shows that classic cars are bought with cash, so the auto loans rate is much more likely to influence new car buyers. 8,9 When the residential real-estate market takes a dive, an effect might be that homeowners sell the classic in their garage. This becomes a problem for the car market if supply outstrips demand. And while that is likely to happen for vehicles that are sub-$150k, if you read the industry section of this report, you’ll see that the demand for Fund cars remains healthy and fluid. With supply available and demand healthy, it will buoy the value of the Fund’s target vehicles, while producing good buying opportunities for those of us with the expertise to find and negotiate a good deal. The data across a myriad of factors shows one consistent trend, vehicles above that $150,000 price point — think Fund cars — might see little change in demand , while these same dynamics produce the potential for some good buying opportunities for the savvy hunter. The bottom line is: if, like the Fund, you can afford to hold on to your classic, take the long view – now’s the time to buy.

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INFLATION SENSATION

The world doesn’t end very often, but when it does and inflation becomes institutionalised, the collectibles that tend to appreciate the fastest are portable and private. While long-run spikes in inflation are a killer for rising food and fuel prices, its impact on the collector market isn’t as cut and dry. And whilst we know this to be true from our and other collectors accounts, we admittedly generally don’t have reliable data on collector car values from the last era of major inflation (the ‘70s and early ‘80s). But, we do know how other tangible assets – namely art –performed. 10

Art was viewed as inflation proof in ways that were to be tested from the middle of the decade for the next fifteen years. US inflation rose in three waves from under 2% to 6% to 11% to 14% in 1965, 1970, 1974 and 1980 before descending in phases to the present. Meanwhile, the stock market, which had been rising strongly since 1949, reached peaks in 1962, 1966 and 1968, before being struck by a slow developing bear market, which accelerated after a major fall in 1972, and lasted until 1980. In the art market, the effects of inflation and wealth diversion became apparent during those decades. For art and collectable, the peak years were 1971 to 1974 and 1977 to 1980, supporting the view that rising inflation buoyed the market up to a point. 1,11,12

"The collectibles that tend to appreciate the fastest are 10 portable and private. "

Indeed, collectibles were not just

a cautionary play during the inflationary ‘70s and early ‘80s, they were engines for profitable growth when yields were otherwise hard to find. In the 1970’s, when economic “stagflation” was king,