This time we wanted to look at the market, past, present and future…
More specifically, what does the market and the classic car world look like for Mercedes-Benz enthusiasts in a post-corona world?
With so many conflicting sources of news available, and our social feeds and inboxes busy with information, here’s some distilled thoughts aimed at SL owners, prospective buyers and all classic car enthusiasts alike.
A blue-sky blog for a time dominated by grey area.
A high calibre classic Mercedes-Benz is now more visible and desirable than ever
Last week our newsletter was circulated to some 30,000 subscribers. This was two weeks into the national lockdown, during which a large portion of the country became housebound. When we ran the data, although this newsletter was our smallest, simplest email to date, it had the highest click through rate we’ve ever seen. The two blogs that featured in the newsletter instantly ranked as our most read published blogs.
Publishers are seeing this trend across print and digital formats. Spikes in magazine subscriptions are being reported from across the classic car press, and viewing figures for blogs and websites are up across the board. The thirst for classic car content, and the sheer enthusiasm for classic motoring seems to be at an all time high. With many people staying at home, classic car content is seeing a huge rise in demand. Perhaps it’s the old adage that ‘we always want what we can’t have’, but looking at the statistics for ClubHouse, the want is most certainly there.
A high calibre classic Mercedes-Benz can be tinkered with at home
We’re seeing a high level of activity in the classic car world, even if cars aren’t turning a wheel. People who are unable to get out and use cars are spending the time improving them, and why not? Working on a classic car can be rewarding, and with just basic tools and access to our online parts store, it’s easy to make improvements in your own garage. We aren’t suggesting nut and bolt restoration, but replacing a bit of trim here, a bit of chrome there, cleaning this, detailing that… it all makes a tangible difference to your car, it’s value and the way you feel about it.
Make your lockdown resolution for your car to drive out of the garage looking better than when it went in!
A high calibre classic Mercedes-Benz can still be bought or sold
Our business is open, although we observing strict social distancing. We’ve slowed the pace, but it’s still happening. We’ve taken a number of cars in and sent a number of cars out to customers, carefully and following all guidance with a liberal application of common sense. We still have to pay our business rates and our staff, so don’t let the current situation stop you from getting the car of your dreams – if anything, this situation has given an increase in car sales enquiries. Having to stop and think about what’s important has made people sit back and say ‘you know what… I do need to get myself an SL and we will take that trip to Europe in it’. And why on earth not?
A high calibre classic Mercedes-Benz and the seduction of open roads
Right now, in houses all around the world, classic car enthusiasts are in front of computer screens, tablets and phones, searching out automotive entertainment in a time when driving cars for pleasure isn’t on the agenda. We are seeing huge spikes in traffic to our online showroom, our parts store and all areas of the website. It could be a bit of reverse psychology, but the current environment of not being able to pop out for a drive means people are keener than ever to enjoy classic cars.
The Pacific Coast Highway in California is closed, isn’t that inspiration enough to plan your next trip?
A high calibre classic Mercedes-Benz and the sheer desire to do
We’ve seen from the type of emails that are landing in inboxes across the business that the CoronaVirus has given people time to think. Our parts store and service team are dealing with enquiries around the world from customers wanting to improve cars, to complete those plans and push ahead with restorations that have languished. This strange time in our lives has given us all an opportunity to think about what’s important, and re-evaluate how we spend our time when the lockdown ends and life returns to normal.
For many of us, the desire to get out and drive a classic Mercedes-Benz, or any classic, is now stronger than ever, reinvigorated. From what we can see on social media, the desire to drive is heightened by the inability to safely do so.
A high calibre classic Mercedes-Benz is financially robust
Back in February we put together a 5 part mini series on reliability. The aim was to highlight more than just mechanical reliability, and instead look at how our classic cars make us feel, what they do for us emotionally and how reliable they are financially. In light of the recent Coronavirus crisis, that post is now more important than ever.
Mercedes-Benz values have weathered the ebb and flow of the market remarkably well in recent years, as noted by the HAGI index report which was posted on ClubHouse back in January. This report looks at a number of marques and key cars and produces an index of performance across a given window of time when compared with each other. Sound confusing? Let’s simplify it with a picturesque analogy:
It’s a sunny day. You’re at a theme park, possibly with your children (or grand children, or great grand children!). Everyone wants to go on the Pirate Ship, the legendary pendulum ride.
If you sit in the middle of the ship, you’ll feel less of the effects of the pitch as it goes through the motions. If you sit at extremes of the bow or the stern, you’ll feel the most dramatic effects.
If the pirate ship is the marketplace, the pitching motion is the movement of the market and the external environmental factors and influences.
Buy a car from the centre of the ship and you’ll shield yourself from the extremity of the effects. Buy a car from the bow or stern and you’ll be more exposed to the up and down, the drama of the market.
In market terms, 7 figure exotica and wildly expensive automotive obscurity reside at the bow and stern. It’s not an exact science, but it’s a good generalisation as to how the market works. Some marques and models feel the impact of market forces in a bigger way than others. Your classic SL sits right in the middle of the pirate ship. (We bet that’s a sentence you never thought you’d read!)
Over the last 10 years, we have seen some cars increase dramatically in value and then fall out of favour with buyers. We’ve seen cars that were hyped by the media and promoted by the auction houses reach heady heights only to attract no bidders at lower price points two years later.
All the while we have been quietly carrying on with what we do, providing excellent cars for astute buyers.
These cars remain desirable, usable, reliable and enjoyable and they have a huge appeal across the spectrum of enthusiasts, and that ensures demand, which shores up values. There will always be a market for high quality classic Mercedes-Benz cars – especially if the roof comes off.
A high calibre classic Mercedes-Benz and the value of value
There’s two ways we can look at the value in your classic SL. The financial value and the emotional value – and the two are intrinsically linked.
You value your classic SL because it’s there for you; it’s the key that unlocks the door of the open road, of weekends away, or sunny Saturdays on village greens and at shows around the country. It puts a smile on your face, raises your pulse, brings contentment and offers instant enjoyment.
You value your classic SL because it’s financially stable. We’ve said before that the cost of turning an average car into a good one often exceeds the retail value of the end product, so if you own a car that needs minor improvements, your investment is safely nestled in the middle of a pirate ship – it might ebb and flow, but so what if it does?
You’re the one holding the keys – you’re the one enjoying the moment.
A high calibre classic Mercedes-Benz pays dividends when corporations might not
The impact of the CoronaVirus crisis on global financial markets has been well reported, coming at a time when interest rates were already at historic lows. As interest rates have fallen in recent years, interest in the classic car market has grown. Investors looking to diversify their assets seized upon key marques, driving up prices and increasing demand. The arrival and subsequent departure of the investment brigade into our corner of the world has been widely reported, so we don’t discuss that here (although our market pieces discuss this in more detail), but it does offer an insight into an alternative use for your money.
Would you rather have funds tied up in stalling shares, a savings account paying negligible interest or a classic car that can be used and enjoyed? We’ve written at length about the safety of the Mercedes-Benz brand, so what are the key points to consider when putting your savings into a car?
Well, with a classic SL, first of all the dividend is in the experience. You can’t drive your savings account to Bath for a Spa weekend, and although you can take your savings to the coast, does it offer the same exhilaration of driving top down in a beautiful classic car?
Would you rather revel in the numbers on your annual statement or look back through photo albums documenting national and international adventures behind the wheel of a stunning classic car?
If corporations are going to be taking a long hiatus from paying dividends, then now is the time to invest your money in something you can enjoy. Let the experience be the dividend, let the journey be part of the adventure and let your dream Mercedes-Benz materialise in your life.
We’re excited for the future, pushing through this strange time with positive thoughts of open roads, blue skies and full picnic hampers.
So where will you go, what will you drive, and what surprises are stashed in the hamper…?
Let us know in the comments below.
If the lockdown is inspiring you to do more, drive more and see more with a classic Mercedes-Benz, our showroom might just house your post-lockdown road trip steed. Don’t see a car you fancy? Contact Bruce to discuss specifics.