After years of speculating about the potential impact of Brexit on the UK classic and collector car world, we’re finally here. At 11 pm on December 31st, 2020 the United Kingdom ended the transition period from its membership in the European Union and began trading under terms agreed with the EU just a few days before. The result has been a lot of new red tape and a fair amount of confusion.
“We could plan for a no-deal, as we knew what that would look like, but we only found out what was in the treaty a week before we had to put it into practice,” said Peter Bonham Christie, founder of Straight Eight Logistics, one of the UK’s top historic vehicle transport firms. “Now, about 90 percent of my working life is spent working with the customs agency.”
Any new system was always going to cause confusion at first, but Britain’s new relationship with the EU comes with a raft of new bureaucracy where almost none previously existed. “When you load a car onto a trailer or into a lorry, it becomes ‘goods’” Bonham Christie told me. “You need a ‘green card’ from your insurer for each element—the car, the towing vehicle, and the trailer—and as you’re transporting goods, you also need an ATA Carnet. It’s not as if we haven’t done this before—the system has been the same for entry to Switzerland for years—but it adds a new layer of cost and complexity to the process.”
An Access/Temporary Access (ATA) Carnet is like a passport for goods, a bond that guarantees that your items won’t disappear after they enter the country. There’s a set fee for each—currently around a few hundred pounds—but there’s also a returnable bond payment that has to be presented. This is 40 percent the value of the goods, hefty enough for a £20,000 Triumph Stag but eye-wateringly expensive for a £5m Ferrari. Specialist finance companies offer to put the money up for you at a set rate of interest. Again, for the standard enthusiast this could be a fairly affordable payment, but for very expensive cars that their owners wish to take to an event in Europe, it could run into many thousands of pounds.
The new costs and paperwork are also affecting British exporters. I spoke to Julian Majzub, owner of classic-specialist manufacturer Blockley Tyres and a well-known historic motorsport competitor. “Blockley would struggle without the volume of its sales to Europe,” he said. “The paperwork, aggravation, increase in costs, real delays and inconvenience to customers will impact us… on top of which, we haven’t factored in the people who will no longer order from British sources, irrespective of the price. Obviously, we’ll make the best of it, but I’ve now got quite a heavy monkey to carry on my back that my competitors don’t, in a dog-eat-dog world where my competitors have been trying everything to shut me down, well before Brexit. So, let’s see what happens.”
Dealers serving the enthusiast market have not been greatly affected: It’s a naturally quiet time of the year for classic sales and British buyers tend for the most part to prefer purchasing right-hand drive cars from their own country. For those selling more expensive cars though, things are different.
“Our business is very international,” said leading collector car dealer Max Girado “Our last car we sold to Hong Kong. Before that, from Italy to Belgium. The [new] rules are quite draconian, and everyone is getting used to them. With time we will all adapt, [but] from a business perspective, Brexit has not helped us in any way.”
Dealers of more modern collectable cars have their own specific issue—the addition of a 20 percent value-added tax (VAT) to the import of used cars from Europe that are less than 30 years-old. “This is a real problem,” I was told by Edward Lovett, top dealer and the man behind thriving online sales hub Collecting Cars. “A buyer searching for a rarer modern performance model might typically have looked in Europe. Now that comes with a hefty additional cost.”
Auctions have their own complexities to deal with. UK-based auction houses have historically held sales all over Europe and also welcomed EU-consigned cars to their British auctions. Now cars (and their sales rostrums, speakers, and other paraphernalia) will have to be temporarily imported, with all the extra paperwork that entails. But, have sales been affected? Mark Perkins, founder and managing director of Historics auction house set an optimistic tone when asked about their Monaco sale scheduled for 23rd April. “Significant collector car consignments have already been sourced from UK vendors, together with serious consignment interest received at our UK and European offices by non-UK domiciled vendors. Three months before the sale, it’s too early to comment meaningfully on bidder registration but that again will give us some useful insights into UK/International buying patterns.”
“As with all new measures, it’s a matter of acclimatization and familiarity with the rules,” Perkins continued. “Clarity is the imperative.”
Perkins’s statement alludes to one of the key issues mentioned by many of the people in the industry that I have spoken to: The rules just aren’t all clear yet. Whether UK historic vehicles are still exempt from EU low-emission zone regulations, whether spares can be boxed together under one carnet, and what happens to them if they’re used; the answers to tricky details like these are impossible to find in official literature and will only be discovered later, as the rules are tested. At least, as Peter Bonham Christie told me, the current COVID crisis could be unexpectedly acting in the industry’s favor. “The [current UK mandated] lockdown has given us breathing space to find out how it is all going to work,” he told me. “To be honest, the perishable goods transporters are taking the pain for all of us.”
Others fear that COVID could be shrouding the true depth of the crisis. “How much of the down turn we have yet to feel is COVID and how much is Brexit?” Julian Majzub pondered. “[The British Government] say everything is down to COVID and when the country comes off furlough in June, then we’ll see the state of things and where unemployment really is, and that is when the new reality will start to dawn.”
It’s a fair prediction to say that summer 2021 may be a watershed for the UK historic vehicle hobby. What effect this may have on the average enthusiast is yet to be seen, but everyone I spoke to was determined to work around the problems and get back to normal as soon as possible. “Once matters are clear we would anticipate business as usual,” Mark Perkins told me. “Whatever happens, the UK remains a key market for classics, both domestically and further afield.”
Brexit was the stupidest move England could of made. It’s significant that in a poll taken after the vote to leave after the initial hysterical vote was taken the same folks wanted to stay. With all the additional burden in complexity, cost and other nonsense, it’s a terrible idea. And Boris Johnson needs another job. But not this one.
Europe is behaving like a petulant loser in a game of football. Instead of saying OK you have left now let us get back to a free trading situation. But no, it is there mantra to disrupt as much of our trade and services as possible, starting with denying blue badge holders the rights in Europe to trying to cripple tge shellfish industry. The answer is oh so simple , if tge EU bans shellfish exports we ban their wine exports, if they ban our livestock we ban their cheese and so on. I bet one week of the Europeans being hamstrung would resolve all “free trade” issues. Q.E.D.
It’s been a pretty polarized discussion. For myself, it was never about logic – it was a view based on emotion. (I buy cars that way too.)
It was untenable to me that unelected faceless Euro-bureaucrats held sway over UK laws. I can’t imagine anyone in the USA would ever be comfortable with that situation. Britain will muddle through, it always does.
KS::they still do (bureaucrats)~ the vote was not thought out, an emotional one, heightened by the ‘political process” (pols sturing it up, conflating possible outcomes, focusing anger, etc) much like the current/near past in us of a. Shame
However – bureaucracy is simply a human organized system put together to administer our needs. We must monitor, adjust, and set policy for these entities to follow (I call it ‘putting a human face on the bureaucracy”) or they self rule (fox in the hen house) and become unruly (lay man can not understand). It takes a good while for the tail to wag the dog, I agree w/U we need eternal vilegance, but it is a ‘we need them, they need us’ kinda dynamic. I don’t wanna do it. I want my time spent on family, the job, entertainment, etc. Not this administering. My neighbors and I DO monitor them – w/interest and action~
Credit check agencies and Companys House show Straight Eight Logistics being Liquidated shortly after this article! This chap would have know is financial position at the time of writing. I hope the creditors and HMRC were taken for huge amounts.