Four Reasons to Buy That Sports Car Now

The number of British cars available to sentimental Baby Boomers is fixed at the total produced between 1948 and 1981

Any basic economics course teaches that price is determined by supply and demand. That principle is vividly illustrated in the current market for collectible British cars, where prices have been rising on almost all marques for five years. Here are a few reasons why.

More buyers in the marketplace

Who buys collectible cars? Baby Boomers, that's who. When the boys in uniform got home from WWII in 1945, after postponing marriage for four years, they had one thing on their minds. The inevitable result was that the birth rate immediately skyrocketed. As prosperity took hold in the early 1950s, plans for a second, third, even fourth child filled new homes in the suburbs.

By 1964, considered the last year of the Baby Boom, four out of every ten Americans were under the age of 20. This is the biggest single age group in the history of the world.

This was also the first generation that grew up with a garage by every house and an automobile, or two, in every garage. So we shouldn't be surprised that the Boomers are trying to recapture the magic times of their teen-age years through period automobiles.

They are at the age when they have spare time, spare income, and spare garage space with which to indulge their hobby.

Bottom line: More customers than ever before are signing up for bidder's badges at the big classic car auctions and roaming the Internet looking for bargains in the cars they aspired to own during their teen-age years. Furthermore, this wave of first-time buyers won't abate for another five to ten years, when the last members of the Baby Boom reach their fifth decade of life.

The supply isn't going to get any bigger

There's nothing in the demand factors that makes British cars different from American iron or other overseas marques. It's on the supply side where several factors have conspired to put an absolute lid on the number of British cars worth collecting. Here are four reasons why.

1) For all intents and purposes, the window of production years extends only from 1948, when the first British cars capable of handling the speeds and distances on modern highways were imported, to 1981, when the last trickle of distinctively British cars suitable for export-the MGB and Triumph TR8-rolled off assembly lines in central England.

Before 1948, only very expensive English cars like Bentley, Lagonda, or Jaguar could go fast for long. After 1981, for a variety of reasons, the British automobile industry pretty much imploded.

2) Some enthusiasts believe that the window is even smaller, and that any British car built after 1975 is never going to be very collectible. They argue that Department of Transportation and Environmental Protection Agency regulations, which started in 1969 to tighten the screws on performance in sports cars, effectively ended the production of desirable British cars by the mid-1970s.

Recent stricter emissions requirements mean that cars built after a certain date must undergo emissions testing once a year. Test failure and the cost of repairs takes more cars off the road annually.

This isn't a nationwide problem; it's possible to remove anti-smog components, or do engine upgrades on cars built after the mid-1970s, in states that still have no emissions inspections.

In other states with a rolling 25- or 30-year smog inspection requirement, cars built as late as 1982 are now free of inspection. However, in a few bellwether states like California, the exemption date is fixed at 1975, and there is little likelihood it will ever be relaxed. Since other states tend to follow California in their emissions regulations, the trend clearly is moving opposite to the interests of enthusiasts.

4) The British market isn't like the muscle car market, where supply doesn't seem to be fixed, and plain vanilla Pontiacs and Fords turn into GTO and Shelby "tributes" overnight. At least in the British car market, modifications can't make silk purses out of pigs' ears, and those cars with value related to provenance, like Sunbeam Tigers, Austin-Healey 100Ss, and Jaguar C-types, have registries that track the real cars.

The bottom line on the supply side is that the total number of British cars available to satisfy the growing demand of Baby Boomers is fixed at the total produced between 1948 and, say, 1976, minus the ones that have rotted or already gone to the crusher.

To look at it another way, if you want a Porsche 911 coupe, you have choices that stretch from 1964 to the present. More choices, and more supply, means lower prices. If, on the other hand, you want a 6-cylinder Austin-Healey, the last one built left the factory over 40 years ago, and they haven't built one since.

Prices can't help but increase

In any market where there is a growing demand and a fixed supply, prices will inevitably rise. The British car market faces inexorable growth in Baby Boomer demand for the next ten years. We've seen that pressure already affect the more desirable Jaguars, and are now seeing it lift prices on top-quality Austin-Healeys.

Inevitably, the demand must reach down to more affordable marques, including Triumphs and MGs, and they will start rising in the same manner.

Growing demand can also change the supply equation. There are still cars tucked away in widows' garages, or in the backyards of packrat collectors, that will become restorable as their potential selling prices start to reach a break-even point with the cost of restoration. This is bound to put some new cars in the market, though even this supply is finite.

It also means that we might be justified in taking that British "beater" in our garage and turning it into the dream car we've always wanted, since for the first time the costs of a real restoration might be justified.

These circumstances also favor the fortunate among us who already own that British car we always dreamed of. Our only concern is to make sure we increase the agreed value on our classic car insurance policy to match the probable replacement cost in this rising market.

This doesn't seem to have escaped the notice of the insurers. In each of the last three years, my renewal notice suggested I review my agreed value, and the insurer didn't argue when I substantially increased the value on my cars this year.

For those of us who still haven't found the car we want, we should be aware that prices rise fractionally with each passing day. The saying that "no one ever pays too much for a classic car, they just buy too soon" is probably just as true of British sports cars.

So, thanks to the Baby Boom, the ineptness of British managers of the past, and the solicitude of environmentalists past and present, if you own a British car now, count yourself lucky, and a little richer than you were yesterday. If you are just starting to look around, you'd better hurry, because there are more Baby Boomers behind you, and interesting British sports cars aren't going to get cheaper.