Classic Cars As an Investment

Certain classic vehicles have always had potentially interesting investment status. The more exclusive low volume manufacturers have traditionally staked their reputations on building glamorous and expensive low production number vehicles. As a result these have always had an allure for the enthusiast and investor alike.

In the 1980′s Classic car values rose dramatically with peak prices being reached toward the end of the decade. Those that had the foresight to hold on to their sought after models prior to this certainly reaped the benefits when it came time to sell especially those lucky enough to own certain Italian marques. As we moved into the 90′s values dropped considerably echoing the period of recession that was being experienced in the housing and financial markets. It was not until around 2004/5 that values started to quietly creep up again.

The last 12/18 months have seen some very interesting auction results with some record breaking numbers being achieved. It is interesting to note that competition machinery has seen some large increases in value and this has helped to increase the desirability and value of comparative road going models.

With this rise in value the potential for profit has opened many peoples eyes to the opportunity. Over the last few years we have seen the emergence of three Hedge Funds that specialise in buying rare and exclusive vehicles with the potential to increase in value and provide good returns for those lucky enough to be involved.

The quote below is from Eleanor Thorneycroft of The Classic Car Fund;

"Classic cars have been consistently performing as a non correlated investment. If the investor chooses the right car they can benefit from the continual upward trend and potential profit- but they should be prepared to buy and hold onto the investment, take a car that has already been well restored or in excellent condition and be prepared to store and run it (or enjoy it in rallies) keeping it at its best. Classic cars, that is investment grade cars over 15/20 years old or with a particularly strong heritage, are in limited and dwindling supply so with the assumption that their classic lines will be appreciated through the ages and across all nations, a cleverly chosen classic should bring plenty of joy to the eye, the generations to come as well as to the pocket."

If one looks at the numbers in isolation then it makes a pretty compelling read with overall growth of around 12% across the industry as a whole since 1990. This picture is met with some suspicion from more traditional investors preferring a less illiquid investment strategy. Like it or not though it appears that for the time being values are continuing to rise with each high profile auction achieving ever more stratospheric results.

http://www.theclassiccarfund.com

Simon Cave
http://www.love-classic-cars.com
The place for all classic car fans to meet and swop stories of ownership, overheating and scraped knuckles!

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