Although classic cars have proved to be reliable investment assets with stellar returns on equity, some say that there is quite a bit of irregularity between the top performers in the classic car collectible lot and the seemingly-obvious choices.
The recently-published HAGI (Historic Automobile Group International) Index listed 50 of the most profitable investment collectibles in the classic car market. While cars like the Jaguar MK2 made the list, high performers like Porsche and Ferrari were not in the top slots for 2011, even after having delivered significant gains.
The HAGI Index reflects the prices of the most expensive and the rarest of classic cars such as the 1955 Aston Martin drophead coupe. The Aston Martin, incidentally, experienced quite a boost in its sale recently, when it was sold for £227,000 in 2011, having been bought for £181,000 in 2009. The current price tag is far beyond the reach of ordinary investors.
While many investors will be inspired to invest in classic cars after this happy piece of news, there is currently no data to suggest that cheaper classic cars have witnessed similar price hikes as the Aston Martin.
According to Mr. Dietrich Hatlapa, who published the HAGI Index, “Simply because a model or marquee has performed well in the past, it does not mean it will continue to advance at the same rate in the future. Often, there can be better opportunities among models that have underperformed. This market is highly segmented and affected by changing tastes and fashions.”
Alan Boulding works at Legal & General as a pensions strategy director and is a classic car enthusiast himself. He says, “A successful investment in classic cars will require foresight to gues which vehicles will become more popular over time. We haven’t yet seen big Chinese or Indian money coming into the market as we have with fine wines, so a speculator might go for the marques that have some historical connection in the East such as Daimler or Lanchester, but which are still very modestly priced over here.”
He went on to say that prices are given to fluctuate with the change in tastes and trends.
“In the future, they may not appeal to people who want to show that they are up with the latest. I’m mindful of Menzies Campbell, who quietly dumped his 12-cylinder Jaguar the moment he became Liberal Democrat leader as it didn’t convey the right environmental credentials.”
In addition to being unfriendly with the environment, the cost of upkeep of a classic car is another hassle for owners to deal with. But cheap classic car insurance is still quite easy to have, what with the maintenance of the car being a foregone conclusion.
Mr Boulding continues, “As a form of retirement savings, a car from the Sixties does offer something quite unique. These are from a golden period with sufficiently advanced engineering that they still keep up with modern traffic but are entirely mechanical and free of electronics, making them easy to repair.”
