Investment vehicles

Classic cars have outpaced other forms of investment

It is commonly believed that cars fall in price over their lifetime. And that is the case for most cars – but there are exceptions. Typically, these are well-maintained, classic cars that also have an interesting and unique history.

One example of a classic car is a 1973 Porsche 911 Carrera RS. 1,580 units of this car were produced at the beginning of the 70s due to the fact that a minimum production volume was required to approve a model for racing.

The fact that this Porsche was produced in very limited numbers, has competed on the race track and/or may have had a prominent owner determines its attractive price. In fact, the prices of a number of classic sports cars have outpaced other forms of investment such as shares, bonds and gold (as indicated in the graph).

Other important factors that foster a positive price trend are the condition and originality of the car. A car with a high level of originality has no, or only a few, repaired or replaced parts. If the car has been restored, the restorer who performed the job and the resulting quality are highly significant factors.

According to Haggerty’s price index, which constantly monitors the value of classic cars, a perfectly restored example of a Porsche Carrera RS cost an average of 235,000 US dollars in 2006. In 2015, this figure rose to 899,000 dollars – an increase of 282% in the space of a mere nine years.

What has contributed to this incredible price rise for certain car brands and models?

The price increase is due to a range of factors in combination, and car collectors are very similar to art collectors in this regard. One of these factors is rarity. Obviously, no more examples of the Porsche 911 Carrera RS were produced after 1973. Other factors are utility value and interest in owning a beautiful collection that can be enjoyed and shown off.

In addition, a general increase in the population’s prosperity in recent decades has played a significant role. This applies to both new and old economies where growing prosperity has intensified the pursuit of healthy returns.

How do you get hold of the right investment vehicle?

As with other investments, you need to do your homework and, preferably, know the market. A good example of this is the property market where the prices of certain types of property are not affected in fluctuating markets with their booms and slumps. On the property market, this applies in particular to properties with the right location. In the case of investment vehicles, it is primarily a question of the previously described factors. In any case, it is important to ally yourself with the right experts and advisers – preferably those with the right connections.

In our experience, Selected Car Investment’s ability to judge the car’s originality, condition, production volume and history makes a significant difference when selecting the right car for your investment.

We have also noticed that it is extremely difficult to gain access to the most interesting investment vehicles for people who do not have the right network. Our aim and raison d’être are to make use of our skills and network to turn your dream car into your dream investment.

WE FIND THE BEST INVESTMENT FOR YOU

When your investment is focused on returns, it is, of course, important to know which brands, models and years will offer you the best security. This requires expert knowledge of the classic car market, the right network and a finger on the pulse of the financial markets. If you don’t have this expertise yourself, you will find Selected Car Investment’s advice and guidance of great benefit.