THE ECONOMIC AND ENVIRONMENTAL IMPACT OF THE HISTORIC AND CLASSIC MOTOR INDUSTRY IN THE UK

16 3. Introduction and overview of the sector 3.1 Definition The historic vehicle sector has its own definitions. A vehicle produced before the First World War is defined as ‘veteran’, one produced before 1930 as ‘vintage’. Vehicles produced after th is date are less tightly defined. At one point any vehicle more than 25 years old was exempt for road tax in the UK. Then this rule was adjusted to cover only vehicles produced before 1973. Now any vehicle more than 40 years old is exempt from road tax. But there are plenty of vehicles that would widely be considered classic that are much younger than that, though the industry definitions tend to be subjective. For a study like this with quantification key to its findings, it is important that a precise definition is used. Fortunately, in the UK the HMRC has precise guidelines for classic vehicles for the purpose of tax. On their definition, a classic car is a car that is either ‘more than 15 years old and worth more than £15,000’ or ‘more than 20 years old and likely to be worth preserving’. We have used this definition throughout this study. We have included all cars over 20 years old that have been preserved (ie not lying in fields or elsewhere effectively being scrapped) and all those cars over 15 years old that are worth more than the stated amount. It is worth noting that the £15,000 cut off has been kept at the same level for over 30 years. For its research the Federation of British Historic Vehicles Clubs (FBHVC) use a definition common in the industry, defining an historic vehicle as one over 30 years old. Because their definition is more restricted than ours, some of their estimates (eg number of vehicles) are lower than ours. This does not imply inconsistency – just that their numbers are calculated on a different basis. FBHVC estimate that there are 1.54 million historic vehicles in the UK. Cebr estimate that there are in addition 1.47 million classic vehicles that satisfy the HMRC definition of classic vehicle, giving a total of 3.01 million classic and historic vehicles (see Figure 1) . 3.2 The sector The sector comprises three distinct elements though they often overlap. First is ownership. The 700,000 owners of classic cars (FBHVC figure) take great pride and joy in their ownership. They spend significant amounts on restoration, repairs and maintenance, often far in excess of the value of their vehicles. In addition, they spend on insurance and, where appropriate, tax, on fuel and oil and lubrication, on transport and storage and of course on parking charges, speeding fines and the like. It is a convention in economics not to treat fines or even parking tickets levied on motorists as taxes and therefore as contributions to the economy and we have followed that convention and do not include them in this analysis. It has been alleged, though, that many such charges are more for the purpose of revenue generation than as punishments for bad behaviour. The second is historic motor sports, racing and rallying in particular. These are major spectator and participation events that are attracting increasing interest. The various events at Goodwood, Silverstone and elsewhere have achieved massive status not only amongst historic vehicle enthusiasts and are highly oversubscribed. These sports make a significant contribution to the local economy. Historic rallying is an extremely fast-growing sport, judging by attendance at the training sessions organised by HERO-ERA and other rally companies. These again are oversubscribed. The flagship rally event, the Peking to Paris Motor Challenge, was immediately 8 times oversubscribed when entries for the 2022 event opened in early 2020. The third is a range of related industries, from owners clubs, through museums, shows and exhibitions and ending with magazines, models, tools, specialist clothing, regalia and equipment. All these sectors contribute significantly to the UK economy.