When thinking about classic cars it is easy to envisage historically important vehicles such as the original Mini Cooper. However, they do not have to be collector vehicles. As such, it is easier than one would imagine for a vehicle to qualify for classic car insurance.
The definition of a classic vehicle is defined by a number of factors. Interestingly enough, these factors can differ between HMRC and classic car insurers. Classic vehicle insurers often have looser criteria than HMRC, meaning the benefits of classic car insurance are easier to obtain.
So, if you’re looking to insure an older car, how can you check its classification, and ensure that you have the correct insurance cover?
In this article, we’ll take a look at what a classic car is and how classic car insurance works.
What is the definition of a classic car?
There are a number of criteria a vehicle will have to meet to determine its status as a classic car. This includes:
- The car’s age
- Its agreed value
- Do they have historical interest?
- Are they collectable vehicles?
- Are they vintage automobiles?
However, some of these definitions cross over into the car’s classification as a historic vehicle. Along with classic car insurance, this has further benefits such as tax and MOT exemptions.
First, let’s take a look at how a classic car is defined.
HMRC and insurer definitions of a classic car
HMRC has its own definitions as to what a classic car is. For example, a classic car is aged 15 years or more at the end of an assessment year.
- the market value of the car for the year is £15,000 or more and
- that market value exceeds the amount carried forward from step 3 of Section 121(1) ITEPA 2003.
However, a classic car insurer will have its own definitions as to what constitutes a classic car. For example, some classic car insurers will define classic cars as being 10 years old or more. In these cases, the actual cash value of the car does not matter.
Other classic car insurance companies have an even less stringent age definition. In some cases, classic cars can be a mere five years old. These are known as modern classics. No laws are in place to definitively decide what is, and what is not a classic car. So which factors help decide what a classic car is?
Classic car criteria
As the law does not specifically determine what a classic car is, it is mainly down to subjectivity. A number of criteria are considered to help give a vehicle classic car status. This includes:
This is how fondly car owners remember the car. Is there a collective host of positive memories associated with the car? For example the humble Ford Escort Mark I was a favourite family vehicle in the UK, which replaced the outdated Ford Anglia. As an underdog, the car managed to win the British saloon car championship, and the London to Mexico World Cup Rally in 1970, cementing its legacy.
How desirable the car is, helps to define its classification as a classic car. For example, a car’s appearance in film or TV, that paints the car in a visually stunning light will greatly improve its appeal. Perhaps the most notable example of this is the Aston Martin DB5 from the James Bond film — Goldfinger. The elegant design of the car fits perfectly with the luxurious setting of the film enshrining it in glory.
Obsolescence and rarity
If a desirable car is no longer in production it instantly becomes more valuable. This is because parts are harder to come by and so a car in good condition becomes harder to find. If the car only had a limited release it becomes even rarer, increasing its desirability further.
For example, only four Bugatti 57SC Atlantic Coupe cars were made and only three still exist. These are often regarded as the most expensive cars in the world. The model that was lost when Germany invaded France in World war two, is estimated to be worth $113 million. However, even the surviving cars are the most expensive in the world by a large margin.
MOT and tax exemptions for historic cars
As defined by Gov.UK, historical classic cars are cars or vehicles built or registered 40 years or more ago. Furthermore, the car must not have had any substantial changes in the previous 30 years. This would include changing the engine, axle, body, or chassis.
A number of vehicles can qualify for exemption status including:
- Large vehicles and buses
A driver can also apply for exemptions on specialist vehicles if they meet the correct criteria. Specialist vehicles include:
- Pumps and mobile cranes
- Digging machines, road rollers, works trucks
- Mowing and agricultural machines
- Gritting vehicles and snowploughs
- Electric vehicles
- Steam vehicles
When these vehicles meet the specifications, they qualify for a number of benefits. For example, vehicles of this age do not have to pay road tax. Similarly, these car owners do not need to take their vehicle for a yearly MOT. However, these vehicles still need to be made roadworthy by law.
Along with this, there are further categories for classic vehicles.
Different categories of classic vehicles
A classic car is further broken down into classic car categories, largely based on age.
- Veteran. An antique car will achieve veteran status. This is any classic car made before 1905. Cars made between 1904 to 1919 are further classed as Edwardian, according to The Veteran Car Club of Great Britain.
- Vintage. A vintage vehicle is any automobile produced between 1919 and 1930. Vintage military vehicles are also included in this bracket, but they often have separate, specialised insurance.
- Post-Vintage. A post vintage classic car is any vehicle made between 1930 and the end of World War II (1945) However, classic car club VSCC defines post vintage as 1931-1941.
- Classic Car. As defined above.
Classic car insurance rules
Although classic car insurance providers differ in their rules and policies, there are some rules of thumb to keep in mind. For example, your antique or classic car should not be used as your main, or first car. You should use a regular car for everyday driving, instead of a classic vehicle. Low mileage is often a prerequisite of a classic car policy, normally between 2000 and 4000 miles.
Unlike regular car insurance classic car insurance requires the vehicle to be kept in a proper storage facility. This will normally be a private garage, but a driveway or specialist lockup facility will also be considered.
Furthermore, driver eligibility is also taken into account. A classic car insurance provider will not normally offer insurance to anyone under the age of 25.
The benefits of classic car insurance
Classic car insurance is generally more competitively priced than regular auto insurance. This is largely because classic car insurance companies assume that drivers take more care when driving classic vehicles. Collector cars, antique cars, and vehicles with a historic interest are presumably highly regarded by their owners. They are often expensive, but the rarity, and nostalgia, are irreplaceable – ensuring drivers are meticulous with road safety when driving.
Classic car insurance policies are also less expensive than other car insurance policies because most owners keep these vehicles in pristine condition which represents a lower risk. Also, a classic car is generally driven less often and does fewer miles than other cars. This is why there is less risk than a regular car insurance policy, which covers daily driving.
Classic car insurance policy extras
There are often further benefits included in a classic car insurance policy. Classic car insurance covers further extra protection such as:
- Restoration insurance. Insurance is provided to protect the vehicle against damage when vehicle restoration is being performed.
- Car show insurance. When proudly displacing your collector vehicle at car shows classic car insurance will provide financial protection against damages.
- Racing/Track day insurance. Often classic car insurance covers your vehicle for racing or track events. So, if you’ve ever wanted to take your classic car out and push it to the limit, rest assured that an insurance policy will provide coverage against damages. However, be aware that insurance policy premiums will rise in line with how many track days you attend.
Classic Car club discounts
Classic automobile owners are often passionate about their vehicles. Owning a classic vehicle is more of a hobby and lifestyle than merely owning a regular-use vehicle. Owners often join car clubs to display their own collector cars and to discuss other collector cars with like-minded individuals.
An insurance representative from the classic car insurance trade can sometimes lower the price of your policy when joining a club. Car insurance can be discounted by up to 25% when joining certain clubs. This is because insurers see joining a club as a further commitment to safer driving. However traditional factors such as a clean driving record will still be the main factor in the insurance price.
With some clubs and suppliers, members can also find discounts on spare parts.
It’s easy to get confused about what makes a car a classic car. This is because the HMRC and classic car insurers often disagree on the criteria. HMRC state that the automobile should be 15 years or over.
However, some insurance companies say that they can be listed as a modern classic from as early as five years. There is no law to dictate this, so the classic insurance specification is open to interpretation, and subjectivity. Insurance companies use subjective markers such as; Nostalgia, desirability, and rarity to decide if modern vehicles can be counted as classics. An insurance carrier can further categorise classic automobiles by age.
In order to qualify for classic auto insurance, there are a number of rules that should apply. For example, classic auto insurance usually only applies to a second automobile or one that is driven rarely.
Classic auto insurance is often more competitively priced than standard car insurance. Insurance can further be decreased by joining clubs. These classic automobile clubs often give the added benefit of buying cheaper spare parts through their business partners.
So, as you can see classical insurance is a complicated game. However, once you understand the criteria and the benefits of classic car insurance, you’ll find it much easier to get the insurance cover you need.