Are Classic Cars a Good Investment?
Making the decision to buy your dream car is always an exciting time! After saving up and trudging along in your second-hand motor, it truly feels great to finally buy and test out a brand new set of wheels.
Yet interestingly, more people are coming to appreciate vintage vehicles and are looking to buy older, classic cars to use on UK roads.
However, due to recent pressure for UK road users to transition to modern, electric vehicles for the sake of climate change, it’s difficult to see whether classic cars are a good, long-term investment. Moreover, there are several things relating to car insurance and MOTs which people will need to know about when they are looking to purchase a classic car to use on the road.
Luckily, with us at Scrap Local you can find out all about classic cars! In this guide, we’ll give you the run-down on what a classic car is and the top things you will need to keep in mind before diving in and buying your dream, retro set of wheels.
We’ll also discuss how you can make money from your classic car with our salvage team! If your classic car is in good condition and you’re interested in selling it for the highest salvage price, then please get in touch with our team and we’ll see what we can do for you.
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What is a Classic Car?
To put it simply, a classic car is an older vehicle which is no longer in production and is rare to find on UK roads because of this.
Generally speaking, a classic car is a vehicle whose value begins to increase after it has been decreasing for quite some time.
However, the main factor which determines whether a vehicle is a classic car or not is how old it is.
How Old is a Classic Car?
There’s no fixed age for when a car becomes classic, but typically a car which is 40 years old is confirmed to be a classic. This is likely because MOTs and vehicle tax do not apply to vehicles that are this old.
However, it’s important to remember that some vehicles could be labelled as classic cars at a younger age. This is usually the case with car insurance companies who offer classic car insurance policies.
For instance, insurance comparison site confused.com claims that a vehicle which is older than 15 years and has a value of £15,000 can be viewed as a classic car.
You can find out how old your car is in your vehicle log book (V5C). Under the blue section titled “Vehicle Details” you will find your vehicle’s date of first registration.
This date will indicate when your vehicle was first registered after coming out of production and will show how old your car actually is.
What Qualifies for Classic Car Insurance?
As previously mentioned, insurance companies can label vehicles which are under 40 years old as classic cars.
That being said, it’s important to keep in mind that different insurance companies have different sets of criteria for what they consider to be a classic car under their insurance policies.
If you’re looking to insure your classic car, make sure that you use comparison sites and read about different insurance policies for classic cars before making a final decision.
Do I Need Classic Car Insurance?
Classic car insurance policies are exclusive to older vehicles and are made to keep your classic car safe on UK roads.
Classic car insurance policies are important to have because they ensure that your car is covered for its true, agreed value! When you are looking to insure your classic car, you will need to establish the agreed value of your vehicle with the insurance company.
The agreed value is how much you will receive for your classic car if it is involved in an accident and is declared a total loss and an insurance write-off.
Some car insurance companies will base your classic car’s value on its current market value. This price refers to how much your car would be sold for on the open market as of today and could mean that your classic car is valued for less than it should be.
Get in touch with your insurance company before purchasing a policy with them and confirm the correct, agreed value of your vehicle to ensure that it is covered properly.
However, sometimes your classic car will need to be covered under a different type of insurance policy. For example, if you work in the wedding and funeral industry and want to use a classic car as part of your business, then you will most likely need to be covered under business insurance instead of classic car insurance.
Overall, when you are looking to insure a classic car make sure that you:
Can Classic Cars be MOT Exempt?
Whilst you will still need to insure your classic car to cover and protect it, you might not need to book it in for an MOT test.
An MOT is an annual test carried out on most vehicles which are over 3 years old. In the UK, MOTs are mandatory and you could receive a hefty fine if you fail to get your car checked.
However, if you have a classic car which was first registered over 40 years ago, then it will be exempt from an annual MOT test.
In addition to this, if you have made no substantial changes to your classic car over the last 30 years, then it will also be exempt from an MOT.
The official GOV.UK website states that replacing your chassis, body, axles or engine are the most common examples of substantial changes made to your vehicle.
Fortunately, you don’t need to apply to let anyone know that your classic car is exempt from MOTs!
However, you will still need to ensure that your classic car remains in roadworthy condition as you could receive a fine of up to £2,500 and 3 penalty points for using a vehicle in dangerous condition.
Why is My Classic Car Not MOT Exempt?
As previously mentioned, some insurance companies can label cars which are over 15 years old as classic cars under their individual policies.
Whilst they might be covered under classic car insurance, any vehicle which is under 40 years old will still be required to have their annual MOT.
For most drivers their MOT is a nail-biting experience, however with us at Scrap Local you can find the top tips on how to pass your MOT on our company blog. With our easy-to-follow checklist you can prepare your classic classic for its MOT without any hassle!
Can Classic Cars be Exempt from Vehicle Tax?
Just as some, older vehicles can be exempt from MOTs, some classic cars can be exempt from vehicle tax due to their age.
Which Classic Cars are Tax Exempt?
According to the official GOV.UK website, a classic car that was built before 1st January 1980 will be exempt from paying vehicle tax from 1st April 2020.
If your classic car was first registered before 8th January 1981, then you will not need to pay vehicle tax from the 1st April 2021.
You can find out when your classic car was first registered in the vehicle details section of your vehicle log book (V5C).
Alternatively, you can get in touch with DVLA to see when your classic car was first registered and whether it is exempt from vehicle tax.
As stated, if your classic car was either built before 1st January 1980 or was first registered before 8th January 1981, then it could be exempt from vehicle tax.
However, if your classic car is used for hire or reward as a taxi, then it will NOT be exempt from vehicle tax.
Additionally, if your classic car is used commercially for trade or business, then it will NOT be exempt from vehicle tax.
You can find out more about historic vehicle tax exemption on the official GOV.UK website.
Alternatively, you can contact DVLA to check whether your classic car should be exempt from vehicle tax.
Whilst you don’t need to apply to stop getting an MOT for your classic car, you will need to apply for vehicle tax exemption to prove that your car meets the above criteria.
To find out more about how to apply to stop vehicle tax on your classic car, visit the official GOV.UK website.
Are Classic Cars a Good Investment?
Whilst it might be tempting to dive in and buy your dream, vintage set of wheels, it’s always important to do your research and consider whether a classic car will be a good investment for you in the long run.
Before you buy a classic car, you must consider these things to ensure that it’s worthwhile.
If you want to buy a classic car, then you will need to figure out how much you are willing to set aside and spend on it.
Needless to say, a classic car can be a challenge to maintain due to its age and rarity. Sometimes it can be difficult to find the right parts you need for a car which is no longer in production and restoration projects aren’t cheap!
In short, think about how much you are willing to spend on a classic car and whether your budget will cover things like repair costs or part replacements.
However, if you have your heart set on a retro motor, then you will need to think about how often you drive and whether an older vehicle will be reliable enough for you.
If you need to drive on a daily basis for a long duration of time, then perhaps a more reliable, modern engine is a safer purchase for you than a classic car.
However, this doesn’t mean that you should avoid buying a classic car with a high mileage. Just make sure that the sale price of your classic car isn’t too high and is appropriate for the vehicle’s mileage.
Additionally, it’s important to check the condition of the classic car you would like to purchase.
When you go to view a classic car, make sure that its interior and exterior are in good condition as replacing damaged parts can be expensive and hard to do for vehicles out of production.
Take the car out for a test drive and listen out for any strange sounds to see if it has any underlying issues which could make it unsafe to use.
Finally, check that the Vehicle Identification Number (VIN) or chassis number matches the number in the car’s log book (V5C). Don’t be afraid to ask the car dealer or salesmen where the VIN is located on the car so that you can carry out this check correctly.
Will Classic Cars be Banned in the UK?
In addition to the above factors, there are a few more things you will need to keep in mind if you are looking to purchase a classic car in the UK.
The UK government is growing increasingly worried about high carbon emissions from vehicles driving through major cities like London, Greater Manchester, and Birmingham.
They are determined to tackle this issue by banning the sale of new petrol and diesel cars in 2030 and have already taken steps to help UK road users transition to modern, electric cars.
Recently, both Greater Manchester’s Clean Air Zone and London’s scrappage scheme have been introduced to encourage people to purchase eco-friendly, electric vehicles and to scrap their old diesel and petrol cars prior to the ban in 2030.
Needless to say, this is a big change which will impact whether you choose to purchase and drive a classic car in the UK.
It’s important to remember that this ban is only for the sale of new petrol and diesel cars. Second-hand petrol and diesel cars can still be sold and bought in the UK in 2030. However, if a second-hand, classic car does not meet the emission standards to travel safely in a low emission zone, then it could be penalised for it and charged a daily fee.
Understandably, these changes could make driving a classic car more trouble than it’s actually worth!
Moreover, it’s likely that both the rise of electric vehicles and the banned sale of new petrol and diesel cars in the UK will diminish the value of classic cars.
Here at Scrap Local, we have up-to-date information on what the upcoming ban on petrol and diesel cars is all about and how it could affect fellow enthusiasts of classic cars.
Can Classic Cars be Converted to Electric?
Due to these recent changes, it’s understandable that enthusiasts for all things vintage have wondered whether you can convert a petrol or diesel classic car to an electric vehicle.
You can convert your classic car to electric, however it’s a complex process which costs a lot of money and needs to be carried out by a licensed professional. This is because a different drivetrain will need to be installed alongside a different engine.
If you want to convert your classic car to an electric vehicle, you will need to contact your insurance company and DVLA about these modifications.
Once your classic car has been converted by a licensed professional, you will need to re-register your vehicle with DVLA before taking it out onto the road.
Overall, if you have the budget to convert your classic car to an electric vehicle and feel that it’s worth your time to do so, then get in touch with a professional converter to see what they can do for you.
Salvage Your Classic Car
Buying and driving a classic car is exciting for some, however for others it’s better to upgrade to a modern vehicle.
But, what do you do with your old classic car? Why not get in touch with us at Scrap Local?
Here at Scrap Local, you can sell your classic car to our salvage team for some of the highest prices.
If you want to sell your old classic car for salvage with us at Scrap Local without any hassle, then you will need to do the following:
First, enquire about your classic car to our salvage team.
Get in touch with our salvage team and we’ll be in touch to see what we can do for you.
Provide information on your classic car’s mileage and condition so that we can arrange to collect your vehicle and give you an accurate, fair price for it.
You should mention whether your classic car:
- Starts and drives.
- Has any mechanical or electrical issues.
- How long it has been stored or stood for.
- Whether your classic car has a vehicle log book (V5C), whether you have keys to the vehicle and whether you have documents for its service and MOT history.
We hope that you have found our guide on classic cars helpful! We’d appreciate your feedback on our article.
Here at Scrap Local, we work with reputable scrap agents across the country and are finding new and innovative ways to help you find recycling easy.
If you are looking to sell your classic car for the best salvage prices, then get in touch with our salvage team today to see how much you could make from your old, classic car.