As seen in The Press.
There probably aren't many people who have owned cars who don't regret selling at least one of them. Not just for emotional reasons but because, if they had hung on to them, they might just be worth a small fortune today.
Values for classic cars have skyrocketed since 2005, some models as much as 269 per cent to the end of 2014.
While unfortunately that doesn't apply to a 1989 Toyota Corolla with 180,000 kilometres on the clock it is certainly good news for New Zealand owners of vintage Ferraris and Lamborghinis and other sought-after vehicles.
Those clever car enthusiasts and savvy investors might not sleep so well though if they realised that if anything was to happen to their pride and joy they might not have adequate cover.
Many owners are putting themselves at financial risk by not accounting for the rapid rise in values, leaving their cars hugely underinsured.
Those lucky enough to own a Ferrari F40 will have seen their values more than double over the past few years but that could mean a significant shortfall if their policies have not been updated accordingly.
The problem is widespread and affects all types of classics, not just those at the top end of the market.
The issue arises because there are two main types of classic policy and they are both capped. With an Agreed Value policy, you know exactly what you will get in the case of a catastrophe. When prices are moving as quickly as they are at the moment it is vital that the value is updated. every renewal, or even in between.
Some owners think that they are protecting themselves by taking out a Market Value policy but often don't realise that these are also capped.
Another issue to consider with valuing classic cars in New Zealand is currency fluctuations - £100k was worth approximately $200k two months ago, now £100k is approximately $235k. Pricing here is based on European markets so any significant moves up or down in the New Zealand dollar versus the pound or euro will have a proportionate affect on the value of the vehicle.
With a limited stock of classic cars in New Zealand, replacements often need to come from Europe. After you factor in shipping, GST and certification the amount required to replace like for like will be significantly more than just the purchase price.
Of course the opposite end of the market is just as relevant. If you pay $35,000 dollars for a new car with financing but it is only valued at $30,000 under a Market Value policy, if that vehicle is stolen or written off in an accident you could find yourself $5000 out of pocket, and forced to catch the bus.
Reilly Price is an insurance broker for Crombie Lockwood in Christchurch