Navigating the Classic Car Investment Landscape

In the world of investments, where often traditional assets often dominate the conversation, however, collectibles as an alternative investment opportunity are gaining even more momentum – take classic cars:

Recent statistics from Monterey’s auctions have sparked discussions about the current state of the classic car market. Sales figures just exceeded $400 million, marking a decline from the previous year’s $473 million. The sell-through rate dipped to 68 percent from the previous 78 percent. Notably, even renowned brands like Ferrari experienced challenges, prompting a crucial question – Is now the time to invest in classic cars?

Despite the market’s transitional phase, notable sales at Monterey showcased the enduring appeal of classic cars. The 1967 Ferrari 412 P Berlinetta and the 1957 Jaguar XKSS Roadster, among others, emphasised the timeless allure of these automotive icons.

Amid fluctuations, one segment of the classic car market stands out is the pre-war classics. Crafted before or during World War II, these vehicles continue to captivate enthusiasts and collectors alike. Brands like Bentley are experiencing success with pre-war continuation series, and millennials are embracing these classics in rallies, emphasising a deeper connection beyond mere investments.

Several indices provide valuable insights into the performance and volatility of classic cars as an investment class. The Knight Frank Luxury Investment Index reports a 25 percent growth in vintage cars over the past year, positioning them as the second-best performing luxury asset after fine art. Meanwhile, Hagerty’s data reveals the resilience of classic cars during economic downturns, with affordable classics and muscle cars showcasing impressive growth.

Ferrari, Mercedes-Benz, and Porsche remain the giants in the classic car market, with Ferraris often dubbed the “blue chips of the sector.” The market’s resilience is evident in Ferrari’s sales growth and the enduring appeal of Muscle Cars. While the recent dip in sales raises caution flags, the classic car market, like fine wine, boasts an inherent rarity that adds to its allure.

As the classic car market undergoes transitions, potential future classics are emerging, such as sporty 90s marvels and unique recent models. The comparison between classic cars and fine wine is apt, as both assets see impressive returns over a decade.

The classic car investment landscape is dynamic, filled with historical charm, resilience, and the promise of enduring value. While recent market shifts may raise eyebrows, they also present opportunities for discerning investors. As the winds of change swirl around the classic car market, poised investors may find an opportune moment to drive into this world of passion, craftsmanship, and timeless beauty. Now, more than ever, classic cars offer a compelling intersection of nostalgia and investment potential, inviting enthusiasts and investors to take the wheel on a road to wealth.

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(Source: TRA, City AM & BM Magazine)

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