Covid and Brexit are, and will, drive classic motorcycle prices even higher. My recent article demonstrated how the Covid crisis has driven demand for classic motorcycles, thus forcing prices higher. You can read that here Vintage motorcycle prices soaring due to covid 19 Once we are on the road to recovery from this crisis then Brexit will be another major player in driving prices even higher. Whatever your views are on Brexit, if we trade with the EU on WTO terms prices will increase substantially.
Once the EU trades with us on WTO terms it means that motorcycles which are over forty years old attract a 5% VAT charge on their full purchase price upon importation. While in the single market we pay nothing on used vehicles from mainland EU. Just buy British, what’s the problem? The problem is that there are nowhere near enough investment grade pieces in the UK to satisfy demand. Not by a long way. We also have the issue of UK customers having demanded that their motorcycle frames are powder coated.
Should we leave without a deal, then as well as the extra 5%, currency depreciation will have to be taken into account. If the pound drops another 5% then prices will instantly have increased by at least 10% within months. What if the motorcycle is under 40 years old? Then prices will increase by about 30% plus any currency depreciation.
But surely there aren’t any classics that are just forty years old? There are plenty. Take for example Ducati’s 916SP which has only just enjoyed its twenty fifth anniversary. Ducati Desmosedici, Ducati 750F1, the Honda RC30, Honda RC45, numerous racing motorcycles etc. These are very large price increases and the market will have no other choice but to absorb them. Add to that, the demand for these machines is steadily growing in our present markets we import from and investment grade examples are becoming harder to find there. At some point, they will want all of the beautiful classic motorcycles back that we have imported here and will happily pay more than UK owners are wiling to pay. The laws of supply and demand will kick in and prices will rise in the UK. Now is the time to be buying the classic motorcycle of your choice.
Such price increases will then find their way into earlier stock. There is a big drive towards classic motorcycles as a hedge against currency devaluation right now. However, I have seen this going on since the banking crash and those that have invested in classic motorcycles have done very well indeed. During the crash in 2007/8 motorcycle prices held up admirably and many investors were drawn to the market to protect against currency dilution.
There are many drivers to this market such as demographics that are a God send to investors, which you can read about here https://themotorcyclebroker.co.uk/what-is-driving-the-prices-in-japanese-and-italian-classic-motorcycles-from-the-1970s-and-80s-heres-some-hard-facts/ China will also soon be joining the rush to buy these beautiful machines. The Chines motorcycle market is the largest on the planet with sales of new motorcycles at 20,000,000 a year. The number of investment grade pieces available in the UK is absolutely tiny. Sure, there are really pretty motorcycles, but a pretty motorcycle is not an investment grade piece that will return great profits, especially in the UK.
You can read a much more in depth version of this article which includes why there are so few investment grade machines in the UK and how powder coat destroys motorcycle frames by joining The Inside Line at https://themotorcyclebroker.co.uk/top-10-investment-vintage-motorcycles-2020/
In these trying times it is vital to only invest in investment grade examples of the right machine which will deliver great returns. Not every motorcycle is a classic, in spite of what some motorcycle dealers will tell you to turn over their stock faster. To be sure of your investment strategy, contact The Motorcycle Broker.
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