The COVID-19 pandemic is creating uncertainty in the 2020 market for classic and luxury cars, so it’s not a good time to sell your vehicle.

However, there’s an easy way to unlock the value of your collectible car – by using it as security for an asset-based loan.

How COVID-19 has affected the South African auto market

Although the classic car market has a life of its own, it’s worth examining the impact of COVID-19 on South Africa’s automotive sector.

In a hard-hitting assessment of the effects of COVID-19, the National Association of Automobile Manufacturers of South Africa forecast a 40% hit on the industry.

According to some analysts, this is a best-case scenario.

Major job losses are expected, new car sales are predicted to decline to 1995 levels and production is tipped to drop 26% on 2019’s figures.

Effects on the market for luxury cars

Despite a protracted period of volatility, the luxury car market has been surprisingly robust.

In the first four months of the year, there was a 3.29% uptick in the sales of rare classic cars.

Although it’s still early days to assess the full effects of cancelled auctions and events, the luxury car market is only slightly off its September 2018 peak.

The carnage some analysts predicted has not materialised.

There’s no glut in the market and prices have remained reasonably stable.

Low online auction sell-throughs

That said, the sell-throughs at online auctions that adopted the sealed-bid system is well below par.

Prominent auction houses in the UK have reported sell-throughs of below 20%.

That’s only a fraction of the catalogued items.

With lockdowns in place, how are the majority of classic car sales being concluded?

Online dealers report more traffic but actual sales are static or slightly down.

Private sales of rare collectible cars

In the US, private sales are on the rise, especially in the high value luxury car segment.

Pundits believe the pandemic is driving a “now-or-never” sentiment in car collectors.

These investors are prepared to pay top dollar for mint-condition luxury cars with a provenance.

Key features of the classic car market in 2020

What we know about the classic car market in 2020 so far, is:

• the market is primarily driven by the sales of rare collectible cars with known pedigrees
• average sell-throughs on ordinary luxury and classic cars are down
• prices have remained within pre-lockdown levels.

Market volatility

All this points to a volatile market but one that’s faring comparatively well in the current conditions.

Once again, collectible cars have proved they’re valuable assets and a great hedge against inflation.

However, with the cancellation of classic car exhibitions and events, a depressed global economy and many owners panicking and liquidating their assets, now’s not a good time to sell.

Why consider a collateral loan?

During unpredictable times, businesses flounder, income dries up and debt balloons.

It’s at these times that emergency funds are required.

A luxury car provides solid backing for a same-day collateral loan.

What makes a collateral loan so attractive is the speed at which it’s concluded – and the fact that you don’t have to dispose of your classic car.

It’s the easiest way to generate capital without rushing into a sale.

How to get a loan against a luxury car with Lamna

The long-term effects of the COVID-19 pandemic on the 2020 market for classic and luxury cars are yet to play out.

But if you need cash, you don’t need to sell your luxury car.

At Lamna, we can offer same-day cash loans, backed by high-value assets such as luxury or classic cars.

How a classic car loan with Lamna works

To qualify for a loan, your vehicle must be fully paid for and owned by you.

We can provide an initial loan offer based on details you provide online or over the phone. To finalise an agreement though, an appraiser needs to value your vehicle at one of our Lamna branches.

If you choose to proceed, the funds are transferred into your bank account straight away, via EFT.

We retain the vehicle for the duration of the loan term in a secure, access-controlled facility. Once you’ve settled your contractual obligations, the car is returned to you, in the same condition you left it.

For more information about using a luxury car to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.