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

33 5. Direct economic impact of sales, rental and ownership 5.1 Introduction This section looks at the economic impact of buying, selling, renting and owning classic and historic vehicles. The impact of renting is easy to measure. But measuring the impact of owning is more complicated and involves interesting measurement issues. For new cars, spending on owning them is calculated as the amount spent on purchase. Normally for used cars, since the sales are within the sector, these are ignored. One way of measuring the ‘spend’ on classic and historic vehicles might be to measure how much is spent purchasing such vehicles in a given year. But since most of this spend is recycled between classic vehicle owners, should the receipts not be netted off against spend? So, we have used the same approach that national income statisticians employ for measuring the value of the use of houses – we have calculated the imputed rent. For more detail on this, how it is done and why, see below. However, even using the imputed rent methodology, the value of sales is not irrelevant. This is because dealers, to stay in business, buy at one price and sell at another. And very often they add value to the vehicle which they are selling. As a minimum they spend on advertising and marketing, which is genuine business expenditure and a contribution to GDP. But normally they do rather more than that: at least improving the appearance of the vehicle with deep cleaning and polishing and often rather more, replacing at least the most obvious parts that need repair. So, the money made by dealers needs to be calculated and included in the ‘ value added ’ created within the economy. This section also analyses the other ownership related elements of expenditure. 5.2 Classic and historic vehicle sales There is no precise data for such sales but we have used data for total sales of used vehicles and made estimates of the proportions which are historic. From this we have estimated the total value of sales which is set out in Table 5 below. Figure 9 Used classic and historic vehicle sales, 2019 Total sold Average price (£) Total value of sales (£) Cars 222,728 7,047 1,569,605,516 Motorcycles 65,558 2,984 195,624,543 LGVs 71,163 4,491 319,611,022 HGVs 7,326 5,035 36,884,945 Buses 4,106 3,033 12,453,404 Others 20,701 5,307 109,870,575 Total 391,582 5,731 2,244,050,005 Source: DVLA, Octane, Car and Classic, Autotrader, eBay, Cebr analysis From the data on sales we have made an estimate of the contribution to the economy directly from dealers’ markups. For this, we have also considered the separate ownership models. For example, for those sold through a dealership, the total value of this sale is equivalent to the revenue received for the business. On the other hand for an auction house, revenue is on a commission basis, so is only a smaller percentage of the total price. However our research has also shown that those sold through auction houses are typically higher value than those sold through a dealership. This adjustment has been accounted for. The results of our analysis can be seen below, with the total revenue received also used to estimate a wider suite of economic impacts.