Most vehicles tend to decline in value pretty quickly. While some models hold on better than others, average new cars depreciate by 20 to 30 percent after the end of the first year. After that, they may lose market value by about 15 percent each year. Clearly, people don’t purchase “regular” vehicles as a financial investment. A collector car’s value, on the other hand, can increase over time and the vehicle itself is often considered to be an investment.

Understanding Collector Car Valuation

You can compare the forces that determine a collector car’s market value to those of other collectables, like rare coins or artwork. The main factors that make one vehicle more or less valuable include scarcity and demand. Many people think of collector cars as antiques. While very old cars are generally considered classics, some aren’t that valuable because they’re not very scarce or in demand. Alternatively, some fairly modern cars can appreciate because they’re rare prototypes or enjoy some other distinction.

As with all collector items, you might estimate a vehicle’s value in dollars by looking at recent sales for comparable vehicles. It’s not so easy for an average consumer to gather good numbers because most sales occur privately, while only about one-third happen through public dealers or auctions. Luckily, you can turn to a number of online valuation tools that will help inform your research. For instance, Hagerty offers online collector car valuation tools for Canadians who own one, or, have an interest in buying one. You might also browse listings on a site like ClassicCars.com to find listings for vehicles like the one that interests you.

Why is Current Valuation for Your Collector Car Important?

Mostly, you want to make certain that your insurer accurately values your vehicle. Along with such factors as your driving record, insurers base premiums on the collector car’s market value. This market price can also impact the amount your insurance company will pay for some kinds of claims. You should understand that insurance companies don’t assign an ACV, or actual cash value, like they will for your regular commuter car. Instead, they generally use a guaranteed value, or GV. GV refers to the guaranteed amount that your insurance company will pay you in case you must declare a total loss.

For instance, you might have applied for insurance five years ago when you and your insurer agreed that your collector car was worth $50,000. Without any communication from you, that might still be the number they will base your claim for a total loss upon. If you find that your car has doubled in market value since that time, you should take responsibility for alerting your insurer well before you need to file a claim. You can use valuation tools or an expert appraisal to make your case. You will have a much stronger negotiating position before you need to file a claim than afterwards.

Do you have any questions about your collector car’s value? Then simply reach out to us so we can help answer them!

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