Investing in classic cars

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2015-06-26 11:05:00

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Classic cars are an increasingly popular form of investment, with large increases in values at both the top and the bottom of the price spectrum. Whilst the rarest and finest examples have proven highly sought-after, with the world record price for a classic car being broken three times in the last three years and almost trebling in the process, 16 of the top 25 cars with the greatest value appreciation are priced at under $10,000. According to a NADAguide price survey, classic cars valued over $125,000 rose in value by 47% over four years, cars between $75,000 and $100,000 rose by 45% and cars between $25,000 and $50,000 rose by 39%.

As of 2011, two investment funds have been set up specifically for people investing in classic cars. The Classic Car Fund has been floated on the German Stock Exchange and is targeting assets of €350 million over the next five years. Another, the IGA Automobile Fund, is targeting £150 million over seven years and is looking to acquire cars such as the Ferrari 250 GTO, the Aston Martin DB4 Zagato and the Shelby Daytona. This illustrates that classic cars are now considered as serious investments at a corporate level.

Restoring classic cars can also be a rewarding hobby, as it can increase the value of the investment. They can also be entered into car shows and vintage rallies, where prizes can increase the value even further. The demographics behind the market should ensure that an investment in classic cars will reap rewards in the mid to long term. There is also the added pleasure and enjoyment of owning a tangible asset that you can enjoy on a daily basis.

Investment indices

The Historic Automobile Group International (HAGI™) is an independent research house and think tank with specialised expertise in the rare classic car sector. It produces a series of four separate indices which track the performance of various classic car models.

Using price indices such as these is important for anyone investing in a classic automobile.

Most valuable investments

The most valuable classic cars are, like any other kind of collectible, the rarest and finest examples. High-end manufacturers like Bugatti and Ferrari built hand-crafted cars in very small numbers, and this extremely limited supply added to the sumptuous designs can see their vintage vehicles regularly sell for over $1 million.

The world’s most expensive car, the 1936 Bugatti Type 57SC Atlantic, sold in 2010 for a price estimated to be around $30 million; only three were ever produced, and only two are known to exist.

Researching the markets

Research is important when investing in a classic car. There are a large number of organisations, societies and local clubs to get involved with, all of which can help with information and advice.

Research can also give you an insight into the changing market prices for a particular model; knowing the current price for a car and how much it has sold for in the past can give you a good idea of its value and whether it is likely to hold or appreciate in value.

The most valuable vehicles are those with their original parts and interiors, so it is important to check the serial numbers on the engine block, transmission, etc. There are a number of books available with serial number listings for different makes, models and years, along with the original paint colour codes and other details needed to check whether the car is authentic.

Cars which still have the majority of their original parts, or those which have restored using authentic parts, are those which will hold their value and appreciate as an investment.

Main article:List of classic car collectors’ clubs and societies

Where to buy investments

If you are thinking of investing in a classic car there are thousands of dedicated dealers around the world, along with specialist auctions and trade shows. A large number of classic cars can also be purchased through private sales, and there are a number of publications and websites with listings of those for sale.

With private sales however, it can sometimes be difficult to obtain a guarantee of authenticity that the majority of larger classic car dealers offer. This is where research can help to spot the tell-tale signs that a car is not as authentic as it seems.

Main article: List of classic car dealers

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