In the world of classic cars, the right insurance policy can make or break a collection. Many specialty insurers require appraisals to decide on an agreed value for a vehicle, but this can be expensive and time-consuming, especially with values constantly changing.
“We’ve seen over half of the vehicles we monitor go up in value over the past year,” Greg Ingold, Hagerty Price Guide editor (pictured), told Insurance Business. The number of cars sold at live auctions in North America is at an all-time high, while online car auction sales have doubled annually for the past several years.
To help clients stay on top of this robust and dynamic market, Hagerty proudly offers its Valuation Tools as a solution to costly appraisals. One of the world’s largest providers of specialty insurance for classic cars, Hagerty does the groundwork to ensure its prices are in sync with the constant changes. Hagerty Valuation Tools® use data from live auctions, peer-to-peer sales, industry partners, and customer sales to track values for unmodified classic cars, trucks, and motorcycles from 1946 to the present.
“We monitor public sales of collector cars. We send people to major auctions, review cars for condition, track their sales, and then compare how those sales did to current values on the Hagerty price guide. We also look at the private market. What are people asking for their cars? If asking prices are up, we get a good sense that the market is likely moving up,” shared Ingold.
Hagerty’s vetted network of car dealers and experts monitor market segments of interest and provide valuable insights that inform the guide.
“What does their inventory look like? Are they turning cars over fast at their asking prices? What are their regular clients looking for to buy next? When all that data comes together, we can see how the market’s doing,” Ingold continued.
Valuing a vehicle
Condition is one of the top factors that affect a vehicle’s value. Hagerty has four ratings for car condition: fair, good, excellent, and Concours or competition worthy. Pristine, recently restored cars command a higher value than those that have been well-driven and loved. Other factors also influence a price, including the number of owners, amount of restoration work, and kind of documentation a vehicle has had.
“Even how much the car has been driven plays a factor, so one with no kilometers on the odometer that looks like it just rolled off the showroom floor is going to command a lot more attention and a higher price than one that has been driven quite a bit,” said Ingold.
Trends also play a role as the demographic of classic car collectors changes over time. As collectors become younger, so do the vehicles in vogue. According to Ingold, the market is trending towards 80s, 90s, and 2000s cars.
Hagerty emphasizes that the Valuation Tools® are meant to be a guide, not a gospel. “We try to give a sense of the average for the North American market on a car. We’re not going to be mad if somebody pays a little more than our price guide values or if they pay a little less,” said Ingold.
Brokers and owners should pay close attention to the changes in market values to secure the best insurance coverage for vehicles. Hagerty updates its valuation tools quarterly, so clients always have the most accurate snapshot of the market.
“We’ve seen many cars coming to market at higher prices than we’ve seen in the past. Some vehicles have gone up 10 percent in value. Specific models have gone up as much as 30, 40, 50, even 100 percent in value,” Ingold noted.
Insurance for collectors
Once armed with a car’s correct value, brokers can tap Hagerty insurance solutions, which are tailored especially for car enthusiasts. Hagerty’s Guaranteed Value™* policy ensures that policyholders are paid their vehicle’s insured value in the event of a total loss, bringing complete peace of mind. Other standard auto insurance policies may offer a stated value coverage that depreciates the car’s value when the time for a claim arrives.
“We hate to see a vehicle underinsured when we know [owners] could potentially be paying more for a car in similar condition,” said Ingold. When it comes to collectors and beloved vehicles, brokers should spare no effort to obtain the best level of protection.
“I think it’s just a good practice for the brokers to ensure that their clients are properly covered and feel confident that if something ever happened to their car, they’re not left wanting.”
Find out more about Hagerty’s valuation tools here.