There are wealthy people in the world, the value of their wealth grows. The demand for luxury goods such as works of classic cars are increasing.
A classic car is considered to be at least 30 years old. Buying a vintage car is not only a capital investment, but it is also important for prestige. The market for classic cars is governed by the laws of supply and demand, and this is limited to what has been produced in the past. Cars do not arrive dozens of years, so the potential growth of their prices is large. Investments in mines have already established themselves in foreign markets, primarily in the United States and the United Kingdom. The prices of classic cars are influenced by factors other than those on which the share prices on the stock exchange depend. The situation on the capital markets has no significant impact on the valuation of cars.
There are a lot of cars that can be of interest to connoisseurs, but the Aston Martin, Bentley, BMW, Bugatti, Ferrari, Ford, Jaguar, Maybach, Mercedes, Rolls-Royce and Porsche are all the rage. The first is the capital gain resulting from the increase in the market value of the vehicle. This depends on factors such as brand, age, technical condition, uniqueness, the number of copies available, as well as the demand for the model, and this may depend on the fashion. Demand is also affected by the macroeconomic situation, which affects the level of wealth of society. The value of a car may be higher when used by a well-known person – an artist, a known politician, or a head of state. The second way to make money on classic cars is to rent them, for example, to a wedding, a ride, a show, a movie, or an artistic event. Very expensive cars belong to luxury goods, so in difficult times, even when wealthy people lose a lot of fortune, demand for such goods may decrease and their prices may be more adjusted than cheaper vehicles. The Hagerty’s Cars That Matter “Blue Chip” Index, the 25 most sought after car brand, increased 350% between 2007 and 2015. At that time, the Ferrari brand index, the highest-priced brand among classic cars from 1950-70, rose by 600%. It should be added that after the outbreak of the financial crisis in 2008 took place a short-term correction of the old Ferrari prices by 25%, after which the index continues to rise to the present. The average price of a car belonging to this index is currently $ 5.6 million versus $ 0.8 million in 2007. The most expensive of these, the Ferrari 250 LM, the 1963 vintage, is valued at $ 17.7 million, and yet in 2013 it cost half that amount. Germany’s post-war classics have also enjoyed a high growth rate – the corresponding Hagerty Price Guide Index of German Cars has increased over the last 9 years by more than 300%. $ 1.75 million was paid for the Mercedes-Benz 300 SL. Prices of British, American, and the cheapest cars were priced at below 30,000. dollars.
The allocation of capital for the purchase of a vintage car is a form of diversification of the investment portfolio. By doing so, it can reduce its sensitivity to stock market fluctuations. However, it is important to realize that the market for classic cars is relatively inexpensive, so investments in these are only suitable for people who are able to freeze capital for longer periods of time. Buying a classic car requires specialized knowledge, so it is worth the help of an expert. The investment decision should include inflation, insurance, garages, repairs, maintenance, as well as the lost benefits that capital could bring if it was otherwise invested or located in a bank.