The classic car market has seen an increase in sales over the course of the pandemic, one that is only increasing as pandemic restrictions are beginning to lift.
When the coronavirus pandemic forced iconic car auctions such as Monterey Car Week and the Pebble Beach Concours d'Elegance to be canceled, there were concerns that the classic and collector car insurance market would be decimated.
Yet, the opposite is true. In fact, the classic car market has seen an increase in sales over the course of the pandemic, one that is only increasing as pandemic restrictions are beginning to be lifted.
How did the classic car market increase sales while traditional in-person car auctions were canceled? The answer: online auctions.
“We see all types of vehicles from classics to exotics and everything in between sold via online auction," says Jon Winstel, classic car underwriting specialist, Cincinnati Insurance. While many people may have had doubts about buying and selling classic cars online, the market is proving otherwise.
“The travel restrictions and limitations resulting from COVID-19 have provided a boon for digital marketing for collector vehicles," says Paul Choi, president, American Collectors Insurance. “Since collector hobby-related travel has decreased, online bidding has increased at the traditional in-person auctions. In addition, inventory and vehicle sales have seen increased interest in online-native auction sites, such as Bring a Trailer and eBay Motors."
The surge in online sales and purchases have not gone unnoticed by carriers and agents alike. “There has certainly been an increase in online buying and selling activity," says Barbara LeMieux, vice president of underwriting, Hagerty. “Values in many segments in the collector auto market have also been increasing. And now that coronavirus restrictions are being lifted, collectors have resumed using and driving their cars again."
However, there are several insurance concerns that arise when buying through an online auction, one of which is “how ownership is decided and when money changes hands," Winstel says. “Ownership is the real deciding factor on when insurance coverage applies."
To ensure a client is adequately covered following an online purchase, “agents can help by reviewing their client's policy and by advising the client to carefully review the sales agreement for information on who is responsible for insurance coverage from the time of the sale to when the new buyer takes possession—including transit," says Matt Cluxton, director of private collections, Cincinnati Insurance.
“It is also important when reviewing insurance specific to collector cars that there is automatic coverage for a newly acquired vehicle for its purchase price for a set number of days," Cluxton explains. “This gives the insured the peace of mind knowing if they buy something, regardless of price, it is automatically covered until they can notify their agent to have the car endorsed onto their existing policy."
While there are many different categories of classic cars, the typical car is older, with some miles on it, and may need repair. In the online marketplace, collectors need to ensure that what they are buying is the real deal.
“To minimize surprises, agents should recommend a pre-purchase inspection either in-person or through a reputable pre-purchase inspection service," Choi says. “An insurance agent should also remind the client to take numerous up-close photos to establish pre-shipment condition, prior to loading and shipping the vehicle."
“Damage incurred during vehicle transportation should be indemnified on the vehicle shipper's liability to minimize filing of insurance claims that may impact future insurability and policy renewability," Choi adds.
Unfortunately, the increase in the use of online platforms in the market has meant “there are more buyers who lack experience coordinating the logistics that are required to safely take possession of a car," according to the Hagerty Automotive Intelligence team. “Many of these buyers may not be thinking about insurance during the purchase process and may not be thinking about coverage during transport, so insurers should prepare for these types of questions coming from clients in order to help them quickly get the necessary coverage in place."
Typically, online sales and purchases are made from two separate locations, including international transactions. “When it comes to buying collector cars in particular, if an agent knows that a client is in the market and is looking to purchase a car, thinking ahead about their insurance needs, transportation and logistics is very important," LeMieux says. “Helping with the transaction by discussing insurance needs during the online purchase process rather than waiting until after the fact is helpful."
[First photo, featuring a Chevrolet Camaro (left) and a Chevrolet Corvette (right), courtesy of Hagerty.]
Olivia Overman is IA content editor.