Published in June 2019 Classic & Sports Car Magazine | Written by Kenneth E Y Wong
KENNETH WONG 黃恩揚- Classic insider 創辦人，經營高級經典及跑車買賣。對處理高檔車種擁有豐富經驗。曾是香港首間經典車拍賣行的營運總監。經常參與高端古董及跑車的相關活動，貼近市場脈搏
經典車其實是種保值，甚至升價的產物，歐美收藏家則明白這一點，較出名的公司如 Hagerty，它們獲得很多經典車收藏家的生意。Hagerty 會跟車主先為經典車的價值達成共識，雙方認同後，就因應這個價錢去開出保費。根據這方法，在美國一部中級古董車，一年保費大概是400 美元，折合約3,000 港元吧。這價錢，跟香港出三保的保費差不多，但以美國的玩車標準來看，這個價錢實在算是便宜了！
Classic cars are all the rage at the moment. Once a niche market for specialty insurance brokers, the collector car industry has now turned into big business in the insurance world, but not in Hong Kong. Requests from many classic car owners to obtain comprehensive insurance for their beloved classics were turned down and all they could get is the bare minimal 3rd party insurance. To make matter worst, most insurance company in Hong Kong add extra loading, extraordinary deductibles and strict named driver policy for classic cars, further penalising the owners.
Are insurance companies missing out on a huge and growing opportunity? Let’s dive into this topic today.
Classic cars are not just loved by older collector who are after the nostalgia, the market has seen a surge in the number of younger owner of classics. Other than nostalgia, the younger owners buy classic car for other reasons as well. For some, it’s less about nostalgia but driven more by a need for a more mechanical and analogue experience. It’s a bit like the craft beer revolution and people collecting vinyl records and vintage watches. Young people have grown up in a digitally saturated environment and collecting classic cars is a cool way to escape from that. This group of enthusiast is growing fast.
A collector car is a vehicle that can hold its value or appreciate over time. Collectors in Europe and North America understand that, and are turning to expertise insurers like Hagerty to keep their favourite asset covered. Hagerty’s collector car insurance policies run on an agreed value system, when they write the policy, they will agree upon a total value given to them by the owner.
In the US, the average annual classic car policy at Hagerty is about $400 USD – less than most standard auto policies. Collector car policies often only cover the vehicle for pleasure-use and not for regular commuting or school-runs. Premiums for low usage are cheaper because the risk is generally lower and the expectations of use are different.
In the event of a total loss to that vehicle, there will not be any negotiation over the pay-out. If there are any concerns about the value of the vehicle, they hire classic car experts who can go out and make a valuation assessment. It takes a lot of experience to determine the correct policy for a really special car, classic car experts spend a lot of time analysing auctions and private sale results to see what’s hot in the market and what sort of price vehicles are being traded for.
Financing companies and banks requires Insurance companies to provide comprehensive insurance in order for them to approval a loan on a vehicle. There certainly will be a lot of demand for comprehensive insurance if a classic car can be financed.
What’s the hold back? Determining Value of a Classic
Determining the accurate value of a classic automobile can be challenging as no two cars are the same. Insurance companies here in Hong Kong are afraid of making the wrong valuation on a classic, hence they shy away from insuring them.
It is important to get an accurate valuation as this is crucial information for both the insurer and the owner. They will both want an accurate figure so that a fair sum can be agreed upon. In addition to this, owners of classic cars may want to know the value of their car simply for their own knowledge. Banks and Financing company would base their loan on the insured value of the car as well.
So how to determine the value of a classic?
A car’s value is determined by a number of factors and some of these have more of an impact than others. The main factors that influence value include brand, model, year, condition, mileage, rarity and service history. Other factors to consider include demand, history, previous owners, market value and specification.
There are a few ways to determine the value and it is worth using a few different methods to come to a fair figure.
1) Online/ Printed Classified Ads
The most common method is to search the classifieds for people selling the same make, model and year. Ideally, it will be similar in condition and mileage. This used to be a time-consuming task flicking through the newspaper, used car classified magazines but fortunately, it is much easier now as there are classified websites where you can search directly for the car. Whilst classifieds can be helpful, you also need to consider that, those are “asking price” which could be far from the transaction price. Basically your car is different to theirs and you do not know how they arrived at the listed price.
2) Auction Results
Another way to assess vehicle value is by looking at various auction results for a similar vehicle to yours. Please do note that those published results usually includes a hefty commission or premium which the auction houses charges the buyer and seller. Therefore the real value could be up to 20% lower. Moreover, you have to consider local market difference such as Left or Right hand drive, Import and registration tax etc.
3) Industry Professionals
There are some trusted industry professionals such as myself who can determine the value of the automobile. This is a great method, but you may have to pay to use their service.
These are the main methods to value an automobile. Each has their own benefits and drawbacks, so for the best results, it is worth using a combination and coming to an average figure.
In the world of business, there is always a “First mover’s advantage”, if you are in a position to act upon an opportunity, you should.