How to Invest in Classic Cars?

Collectors try to gather unique trophy properties, precious items, and collectables to enhance the value of their investment, where diversification ensures higher returns and safety in market turmoil.

Classic cars have been giving one of the healthiest returns since 2005 when the average price of luxury machines increased four-fold.

The price of vintage machines increased rapidly till 2014 but declined slightly in 2015, while the overall returns were 331.9 per cent in 12 years from 2005 to 2017(as per Coutts Index).

It is advised to buy that one can afford in the category because there are a lot of costs associated with such deals, like insurance, event showcasing, transportation, maintenance, storage, and estate planning.

Some of the best pieces with higher residual value have limited owners, and they appear new but are available in fewer numbers in the market due to low production.

Rarity is the main factor driving the value of such asset class. Authenticity, celebrity ownership, and provenance are other factors which can get a higher price for such items at auctions.

How to determine the real value of a vintage machine?

To buy a vintage model, it is necessary to check the machine carefully. The ones that require a lesser amount of restoration work are preferred.

Some car enthusiasts buy non-running vintage with patches and welded sheets, as these may be sold for lower auction value, and with little restoration, one can attain the highest standards to be sold for higher values.

The Coutts Passion Index can be used to determine the real value of the classic car. The models mentioned by the index show growth in price since 2005.

One of the most successful is the Ferrari 250 GT SWB, considered one of the most powerful brands for such investment. It has always delivered maximum returns on investment in the long run.

One can buy in the blue chips or the ultra-rare - where the blue-chip ones include the 1950s and 1960s versions of Aston Martin, Maserati, Porsches, and Mercedes-Benz, but if there is a Ferrari, it is easy to make a decision.

Correspondingly the Porsche 911 delivered eightfold growth, up to 683 per cent in the last 13 years – as per the report by Suedwest bank’s OTX Classic Car Index.

The younger generation is not just buying the ultra-rare, they are seeking the versions from the 1980s and 90s where the experts are not just predicting a strong growth but the feature of accessibility through mobile app version to trade has led to an increase in passion for some of these vehicles from 1980- 90s like the 1989 Porsche 911 Speedster, and a 1988 Lamborghini Jalpa.

Storage and Transportation

Storage is the main concern for such investment where one can use purpose-built facilities or warehouses to hold the machine safely, or storage coordination can be hired, where it is showcased at museums and can be sponsored. 

Museum maintenance, documentation, and appearance can increase their profile and value in the long run.