For most, the joy of owning a beautiful classic car and the perks that go with it are what attracts a buyer. Many do not consider the fact that they could potentially treat a classic car purchase as a sound investment. However, for many years, classic cars have been a popular option for investment. Finding a rare gem and restoring it to its former glory is not only an enjoyable process but one that can mean making a tidy sum of money when the time comes to sell the car.
In recent years, we’ve seen a number of classic cars sell for mind-boggling prices. As recent as August 2017, a 1956 Aston Martin DBR1 sold at auction in California for over £17m. A few years earlier, in 2014, a 1962 Ferrari 250 GTO broke the all-time record at auction, also in California, and sold for £32.4m.
While sales like these are certainly one in a million, for the past decade we have seen an ongoing rise in value for classic cars in the market. According to the Knight Frank Luxury Investment Index, in the past five years, the value of classic cars has increased by 117%. Look further back and over the last ten years, it has increased by a staggering 362%. For the past decade, classic cars have consistently maintained their status as the most popular and valuable alternative investment, outstripping other luxury items such as watches, jewellery, art, antiques and wine. And within the last 12 months, the sale of classic cars still saw growth, while new car sales dropped.
But apart from the overall appeal of owning a classic car, why is it that they have maintained their status as great investments? For one, physical commodities tend to perform well as investments, especially in the current time where financial markets, economic climate and political circumstances are volatile and even more unpredictable than usual.
This plays a large part in why the value of classic cars is on the rise. A tangible object with easily understandable and justified value is something that people can more easily relate to and put a price tag on. The fact that it can also be enjoyed while it's still in your possession (unlike wine), also contributes to classic cars being the most popular alternative investment. It’s entirely possible to make use of a classic car and take it for country drives at the weekend, and all the while it’s still gaining value.
Classic cars are also growing to attract a newer and younger demographic than we typically see, which could further impact the growing market. Collectors are typically baby boomers with expendable cash, but younger collectors in their 30s are also getting in on the classic car scene, bringing the alternative investment to a new generation. This increased exposure to different generations only furthers the popularity and demand of classic cars in the market.
If you have a classic car that you’d like to turn into a valuable investment, our restoration services can help you transform your classic car. We also offer consignment and brokerage services if you’re looking to sell your classic car and are ready to make a return on your investment. Contact us today to find out how we can help.