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Old 23rd February 2010, 15:31   #1
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Default Insurance for Vintage & Classic cars

All this buzz about/around Vinatge & Classic cars got me onto an interesting thought/experience.

Not a single insurance company is willing/cover a car which is 15 years old leave alone vintage and classics!? I wounder how people are getting around this and how market values of cars are being reached for these same cars for lack of a comprehensive insurance cover = valuer coming in and valuing the cars?! And how are potential owners suppose to buy these cars and pay prices without having any cover sure would like some devine light on this one!?
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Old 23rd February 2010, 16:41   #2
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i have 3rd party insurance for my 85 Honda Prelude which is 25 years old.
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Old 23rd February 2010, 17:01   #3
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Quote:
Originally Posted by canonball View Post
All this buzz about/around Vinatge & Classic cars got me onto an interesting thought....I wounder how people are getting around this and how market values of cars are being reached fo
r these same cars for lack of a comprehensive insurance cover = valuer coming in and valuing the cars?!
After the mumbai floods no comprehensive cover for old vehicles. So you only have third party
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Old 23rd February 2010, 17:25   #4
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I know this but why? Are they not valuable enough/at all? If the establishment does not cover them what good is their classic value!? Was not much before the floods that such carfs were not covered?

Last edited by canonball : 23rd February 2010 at 17:26.
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Old 23rd February 2010, 21:05   #5
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I know this but why? Are they not valuable enough/at all? If the establishment does not cover them what good is their classic value!? Was not much before the floods that such carfs were not covered?
WIAAA can assist you with comprehensive insurance if you should so require for your classic cars which should be certified by VCCCI. However will you accept what the insurance company will pay you if you loose a tailight for your classic? I dont so I prefer third party.
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Old 23rd February 2010, 22:03   #6
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I know this but why? Are they not valuable enough/at all? If the establishment does not cover them what good is their classic value!? Was not much before the floods that such carfs were not covered?
I guess cos the parts are difficult to come by and hence make them expensive to buy. If you actually want an insuarance company to pay for a damaged or total loss valuable classic or vintage vehicle, with the low volumes, dont you feel that the premiums to be paid would be unaffordable or should I say astronomical. Thats what I feel. I used to pay 240/- a year for a comprehensive ins on my 50 year old bike till the floods now I pay some 840/- a year for a TP. Hmmm that means my other one will be 69 this year. So I guess an owner will get nothing if it's stolen.

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Old 23rd February 2010, 22:12   #7
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In the international market, there are several insurance products for vintage and classic cars because they are seen as having investment value, much like a piece of art. However, in India, much as one has tried, one cannot get an insurance company to view older cars as valuable. They go by the standard approach of a vehicle being nothing more than a vehicle, which depreciates to zero value over a period of some years. Since insurance companies are now relatively free to devise products, it beats my why none of them have seen the business potential of servicing this market. The way to go about would be to thoroughly research how insurance companies abroad offer insurance cover for classics and then spoonfeed a local insurance company to put together a similar product, or range of products for us. Nothing works better than to justify something on the basis of precedent.
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Old 24th February 2010, 10:40   #8
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Which brings me to the point of value and how can anyone pay top dollar for something that cannot be covered?! Seems like the selling community is ahead of the curve I understand there is some degree of renewed interest in vintage & classics these past few years but one critical element that has been missed out is even if you insure them I understand the payout in case of total loss/theft is less than half of the sum insured which again brings me to the point why should anyone pay top dollar when you can't rely on payput!!??

Last edited by canonball : 24th February 2010 at 10:44.
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Old 24th February 2010, 12:11   #9
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Well, TOP DOLLAR is a relative term, eg. -what one may find ‘Junk’ is ‘Priceless’ to the other.

The General Insurance Industry and more so Auto Insurance in India is at very nascent stage of evolution, we rely only on the ‘rule of thumb’ valuations. So, again nothing to differentiate between classic/vintage/daily drivers/priceless/JUNK, etc. everything is just OLD and falls in the third party insurance segment.

The Classic Car Industry for instance is yet to evolve into an organised structure, it is like the Art/Antique industry in the 90’s, everyone knew what a Hussain/Raza was worth, but they were not traded in the open market place, until early 2000, here again what was being paid at that time sounded ridiculous and up surd, but now considered a steal. A lot of people avoid talking prices openly, mode of payments vary, and enthusiasts are not the only people reading/snooping.

Probably in time Insurance companies will evaluate the need for Classic Car Insurance and get there attractive premiums - Knowing how obsessive owners are about there cars, it will be a no brainer wind fall profit for them, in that segment.

But points to be considered by them would be,
  • Amount paid (questionable)
  • Value perceived to be. (questionable), need multiple Classic Car Clubs (VCCCI,HMCI) putting in a ‘range’ for that car on a case to case basis. Eg: Between 10-12 lacs, or to tie up with International auction house, or have an Independent team of consultants. A thought, like, Mr.Tutu Dhawan, Mr.Bharwani, Mr.Ranjit Malik, etc.
  • All dues paid?
  • Awards won – Something like a race horse valuation.(again questionable, for some)
  • City been driven/parked in and parking contidions.
  • and, and, and.

Last edited by bblost : 24th February 2010 at 14:45. Reason: font tags removed
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Old 24th February 2010, 13:55   #10
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The biggest problem here in India is that there are few unified organizations that can speak for the vintage, classic & special car enthusiasts. Perhaps I am not as informed but that is my impression.

Up until recently we were a small divers group of individuals, but the times are changing with the increased affluence and the internet.

Team BHP has become a significant voice for the enthusiasts and perhaps could begin to put its members into a more formal organization to address some of the problems that we share.

Re Insurance; In N.A. there are a number of car insurance companies that cater to this speciality market. In Canada, (Google) "Silver Wheels Car Insurance" is the principle firm that I have used over the years and require an appraisal from an established firm. My premium was about 10% of a regular policy. R6,000 verses R6000!

Another issue we have in West Bengal is that the road tax has to be paid whether it is being used or not.
For a car sitting for 10 years to be put back on the road a !00% penalty must be paid for each year before it can be either resoled or drive.

Hopefully some of the Car Mags will pick up the banner and help change these archaic laws.

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Old 24th February 2010, 14:52   #11
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Just get third Party, and use the cars extremely carefully. That is what we do.
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Old 24th February 2010, 15:02   #12
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"Well, TOP DOLLAR is a relative term, eg. -what one may find ‘Junk’ is ‘Priceless’ to the other."

Why is that most guys like you who are in this for a while/long association with vintage & classics talk like this in riddles is it like progamming/brain washing that happens as soon as you get into this activity ? We are not talking about one or the other we talking about trends = created by a mass of people.

You sound familiar like someone who is on tbhp but comeback with a new handle!


Well since all cars are available in the west as well, those prices can be used as benchmarks on relative terms I find that there is a blanket appoach in the market and no segmentation which is not the case in the west for setting values which ultimately equate to premiums. When I say relative prices I mean some cars which are worth millions of dollars outside may not fetch the equivilant in India today but I find a lot of common variety cars quoting at 10 times what they would in the west today so I don't consider this to be a REAL price equilibrium and consider artificial demand supply situation a phenomenun that comes and goes as cycles keep changing.

If price wise correction in depreciation/appreciation does not take place time wise always fixes it, its the law of anything in the world and keeps repeating.

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Old 24th February 2010, 16:53   #13
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Quote:
Originally Posted by canonball View Post
"Well, TOP DOLLAR is a relative term, eg. -what one may find ‘Junk’ is ‘Priceless’ to the other."

Why is that most guys like you who are in this for a while/long association with vintage & classics talk like this in riddles is it like progamming/brain washing that happens as soon as you get into this activity ? We are not talking about one or the other we talking about trends = created by a mass of people.

You sound familiar like someone who is on tbhp but comeback with a new handle!


Well since all cars are available in the west as well, those prices can be used as benchmarks on relative terms I find that there is a blanket appoach in the market and no segmentation which is not the case in the west for setting values which ultimately equate to premiums. When I say relative prices I mean some cars which are worth millions of dollars outside may not fetch the equivilant in India today but I find a lot of common variety cars quoting at 10 times what they would in the west today so I don't consider this to be a REAL price equilibrium and consider artificial demand supply situation a phenomenun that comes and goes as cycles keep changing.

If price wise correction in depreciation/appreciation does not take place time wise always fixes it, its the law of anything in the world and keeps repeating.

[FONT=Verdana]I may sound familiar to you because, from what I’ve read online many share a similar thought.

Talking about cars in the WEST, here there are no boundaries in buying cars, one can buy a car from Europe and ship it to the US, and vice versa. In India, that is not the case and prices may vary based on local demand and supply or rarity if you may, for instance Jaguar XK’s are in plentiful around the world(in relative terms) and in India they were invited to the Cartier event, so many /neither would have been invited if this was an event in the west. (I personally love this car, and would consider it one of my favourites).

A price equilibrium on a collectible is very difficult to attain, it would vary on various economic conditions, again here India has one of the fastest growing billionaire population, and a young breed, imagine the number of million/billionaires going through their mid life crisis in 5-10 years, and the prices then.

[FONT=Verdana]Regarding people quoting 10 times the price, how have you concluded the 1x? This to some, may be too high.

Coming to price/time wise correction, in the entire economic downturn globally, Art/Cars are the only ones that did not correct, yes, business was slow and collectors went bankrupt but their Art/Cars got sold, eg- Lehman Brothers Art Auction, The Rajkot Rolls auction, etc, A time correction is likely with prices stagnating/consolidating, but WHEN is the question.

Last edited by Dippy : 24th February 2010 at 17:08. Reason: Removing font tags. Avoid copy pasting from external text editors to post in a thread.
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Old 24th February 2010, 19:12   #14
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I have not seen that many.

My opinion on 1X and 10X is based on tracking this market for sometime now and I also do the same but as a busines in real estate and stocks for a couple of decades.

Your last bit about art/cars etc are all part of a back to back bubble/recession cycle still some time to go for spillover into art/cars etc as these are early days in a typical 6 to 10 year cycle. I know as I have been through them and timed my investments and met several SIMILAR thinking guys like yourself on the way, the funny thing is the same guys talked just the opposite on the other side/over longer periods but some did acknowledge/remember.

My estimate is that nothing is instant noodles and markets don't mildly tap/slap your wrist over months but over years. With that my experience is the a real sustained correction will come in 12 to 24 months (sooner as per some sections)then flat for 12 months and pickup by agian by 2013 and start the next bubble/bull run art/cars being the last to dip and last to pickup (2015-16 onwards)on realtive terms. Even the current pirce quotes on cars we see have only come around in the last 12 to 18 months (at the begining of the financial/realestate crash) = lag effect.

Everytime people say this time is different but the only difference is the way it happens and nothing else just like folks said India is decoupled 18 months ago and now they say we are very much recoupled/coupled depending on who you talk to and what their agenda is

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Old 25th February 2010, 12:45   #15
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Leave vintage cars aside, it's hard enough to insure any 10+ year old vehicle in India. Quoting a post from another thread:

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Originally Posted by GTO - Touring View Post
Insuring cars that are over 10 years old is a ROYAL PAIN:

1. Several insurance companies simply refuse to give coverage (including most non-govt run).

2. And when they do, it is killer expensive! My Jeep's (now in its 12th year) 3rd party insurance alone costs around 3,500+. Comprehensive coverage for a Jeep which has NEVER had a claim, thus enjoying 65% NCB, worked out to about 4,xxx (IIRC). Now consider that my Vtecs book value is 9 times more (4.5 lacs versus .5 lac for the Jeep) and costs only 6xxx to insure (also with 65% NCB). Thus, for a car that is 12 years old and is worth 1/9th the value on paper, I pay 2/3 the Vtec insurance premium.

I am seriously considering 3rd party only at the time of the next renewal. @ Invincible, try getting a quote from New India & Tata-AIG. They cover 10+ year old cars for sure.



PLus the fact that, if the claim amount due to you is like 75% of the book value, they will just offer to do a write-off on your car.
Related thread : Insurance for older vehicles (over 10 years) (Insurance for Older Vehicles - 10 yrs old or so)
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