Expert’s view

Making money: investing in classic cars

Are vintage cars a sound investment – or just a very expensive hobby? 

With initial payment costs, insurance, maintenance and fuel to factor in, buying a car is one of the biggest financial outlays that many people can make. Purchasing an old banger may sometimes lead to more regular repairs while buying a shiny new whip can also involve other charges and fees.

Not all car investments will drive your finances into a deep black hole though – some may even put you on the road to riches. Here we look at the classic car investment market and which models are predicted to rise in value. 

Are classic cars a good investment?

According to the Knight Frank luxury investment index, the value of luxury goods grew 129% over the past ten years, The Motley Fool reported. Classic cars, rare whisky, handbags and wine, all “notched increases” in value of more than 100% over the past decade. Second to rare whisky, which rose in value by 478% in ten years, classic cars saw a 6% 12-month change and 193% over ten years. 

Investing in a modern classic car could “lead to significant gains in the medium to long term”, said Annie Button on Finance Monthly. Tech entrepreneur Tom Wood, CEO of Car and Classic, said it’s a “buoyant market” and online auctions have made it “more accessible to more people”. Wood added: “Modern classics – that’s anything from the eighties to the noughties – are really flying, both from an interest and a pricing point of view.”

The classic car market is “currently in rude health so there’s never been a better time to dabble in a bit of four-wheeled financial speculation”, said Auto Express. You need not break the bank by “spending hundreds of thousands on some Italian exotica in order to make a profit”.

Collecting cars “isn’t always about making money” though, Button added. Some buyers think of them as “passion projects”.

So, is it just an expensive hobby? 

A number of experts were asked by The Motley Fool whether luxury items such as classic cars should be considered for alternative investments. The answers were quite resounding…

“These aren’t investments, they are just expensive stuff that might increase in value”, said Richard Warr, professor of finance at Poole College of Management, NC State University. “You should buy luxury items because you want to own them and they bring you pleasure. Trying to justify your purchase of a classic car as an investment is basically trying to justify your hobby as something more legitimate!”

When asked the same question about luxury items, Dr. Pamela Drake, professor of finance at James Madison University, said: “Absolutely not. Not only do these have price risk, but there is physical risk to these assets, which would require substantial insurance. Not worth it. Haven’t we learned from Beanie Babies?”

1939-1940 MG TB

1939-1940 MG TB

Dean Smith/Hagerty 2022 UK Bull Market list

What are the hottest collectables?

If you are looking at classic cars for collecting or investing, how do you know which models are “ripe for a boom”, said ThisIsMoney. One good place to start is the 2022 Hagerty UK Bull Market list, which looks at classics that are “at the bottom of their depreciation curves”.

The Bull Market list is an annual compilation of cars that “should be both a pleasure to drive and live with” and highlights emerging trends and changing tastes across the enthusiast car scene, Hagerty explained. 

The automotive enthusiast brand and classic vehicle insurance provider has “donned its prognostication hat” and the company’s analysts have “taken a crack at predicting what the hot sellers are going to be before values actually rise”, Forbes reported. “On the surface, it’s a bit like watching stock trends.”

Hagerty’s selection of ten classic and modern-classic cars spans everything from “humble family hatchbacks to high-performing supercars”. According to the company, Britain’s ten hottest collectable cars for 2022 are: 

The hottest collectable carsHagerty price guide range
2010-2015 Ferrari 458 Italia£104,000 to £200,000
1998-2002 Maserati 3200 GT£8,900 to £26,650
1939-1940 MG TB£25,200 to £59,900
2001-2006 Mini Cooper£900 to £6,650
1996-2004 Porsche Boxster£4,875 to £12,650
1961-1994 Renault 4L£2,800 to £8,400
1993-1995 Renault Clio Williams£8,400 to £24,267
1977-1986 Rolls-Royce Camargue£25,000 to £70,000
1969-1976 Triumph TR6£6,200 to £31,000
1979–2002 Volkswagen T3/T25 camper£5,600 to £23,750

Source: 2022 Hagerty UK Bull Market list

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