Car companies change designs and models come and go. But for many, the cars of yesterday conjure up feelings of nostalgia for days gone by. And while the baby boomer generation was the driving force behind the classic car market for many years, today's buyers include those from Generation X, millennials and Generation Z.

The share of classic car insurance policy quotes from Gen Xers or younger increased from 54% in 2020 to 58% in 2021, according to Hagerty Insurance Company. Today, younger car enthusiasts are interested in more attainable cars while older enthusiasts are still collecting the more valuable cars.

“There are a lot of different vehicles that can be considered newer classics," says Jon Winstel, classic car underwriting specialist, Cincinnati Insurance. “I am seeing a lot of '80s-2000s German and Japanese vehicles driving the latest market trends. Some of the more popular ones would be E30 BMWs, BMW M series vehicles from the '80s to early 2000s, Porsche 944-, 924-, 928- and first-generation Boxster, to name but a few." 

Also, Japanese domestic-made vehicles manufactured in the last 25 years, “such as the Nissan Skyline, have a large presence in the market since the early 90's models can now be legally imported," Winstel adds.

And while on one hand a tuner—a car with many parts changed so it can go very fast—may be a popular type of performance car, on the other hand, classic cars are being electrified. “Not only are we seeing more new electric vehicles, we are also seeing an increase in electric vehicle conversions even in the collector car market," says Barbara LeMieux, vice president of underwriting, Hagerty. 

“Currently, only a small sub-set of collectors are doing this, but with the overall passenger car market moving toward electrification, a larger percentage of restorations could move in that direction," Winstel says.

As generations grow older, the definition of a classic car is changing. “We're also seeing great interest in newer vehicles, those from the '80s and '90s and 2000's. These cars represent the newest generation of collector vehicles," LeMieux says.

As clients' appetite for these new types of cars grows, they need to be insured as such. “They are used less frequently, they are used more lovingly, and they require a little more support to keep them on the road and in operation," according to Hagerty Automotive Intelligence team.

As classic car culture changes, agents and carriers have new opportunities to provide the products and coverages needed.

Whether it's an older classic car or a tuner, valuation is the most important factor when it comes to insurance. “The value of collector cars has increased significantly over recent years," says Paul Choi, president, American Collectors Insurance. “It is important to ensure that agreed value limits are revisited at least every three years to ensure the customer is appropriately covered."

Also, consider “diminished value in the event of a partial loss," says Matt Cluxton, director of private collections, Cincinnati Insurance. “Does the policy provide coverage for restoration of the vehicle plus any loss in value after restoration is completed? And is roadside assistance included with coverage?"

Agents must offer a flexible-use option that allows owners the ability to enjoy their vehicles. “People really take care of these cars," LeMieux says. “These are beloved possessions; but they also want to use them, they want to get out and drive them."

In 2021 and beyond, the classic car insurance market is extremely competitive and only becoming more so. “We are seeing other insurance carriers enter this market that may not have had an appetite for the risk or specialized in this niche in the past," Cluxton says.

Overall, the future looks bright. “I see the collector car market continuing to grow as there will always be new generations of collectors and the cars they collect will evolve depending on their tastes and the cars they grew up around," Cluxton adds. “There are emerging, rising and established collectors in this space, and I do not see that changing,"

Olivia Overman is IA content editor.