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Classic cars top alternative investment asset classes, with 192pc growth in 10 years

November 1, 2017

 

Classic cars continue to power ahead as one of the top-ranking alternative investment assets, with growth of 192pc over the past ten years – despite a rocky year for vintage vehicles.

The asset class has performed consistently strongly against other alternative investment asset classes, such as fine art and wine, with a peak in 2015, according to transaction data between 2006 and 2017.

While current market conditions have seen some reversal in recent gains, driven by more cars coming onto the market which has depressed prices over the past 12 months, the classic car market has still grown 3pc since last year, according to a report by global art insurance specialist AXA Art.

It revealed that for the first eight months of 2017, 7,443 cars were sold at auction, an annual increase of 4pc. However, while more cars were sold, revenues declined, with auction turnover falling by 7pc over the past 12 months, to €890m (£674m).

An examination of the different segments shows that the small cap index (cars selling for less than €100,000) is the best performer in terms of quantity sold, while the top lot segment (cars selling for more than €1m) performed best in terms of actual turnover.

The mid cap index (cars selling for between €100,000 and €1m) grew proportionally in both numbers sold and revenue volumes. 

 

AXA found that classic cars in the $1m+ category accounted for 40pc of the market value, despite being just 2pc of the volume.

However, there is a growing trend for buyers purchasing small-cap to mid-cap cars that they remember from their youth, resulting in strong demand for Porsches from the 1980s, for example.

Chris Bentley of AXA Art, said: “Classic cars are purchased by people who are not typically driven by financial considerations but by an admiration of iconic design and high performance.”

 

 

Which models have outperformed the rest?

A top-performing entry-level classic car, the MG A, has increased from €17,000 (£14,900) in 2006 to €25,000 in 2017 (47pc growth).

Both convertible and coupè versions of the Corvette Stingray V8, a mid-cap model, have displayed continuous growth over the past 10 years, from €104,000 in 2006 to an average of €190,000 in 2017 (83pc growth). Prices recently spiked with one auction sale fetching more than €500,000 in May 2017.

With only 761 models of the Lancia Aurelia B24 “Spider” ever produced, its ten-year growth rate is a phenomenal 450pc (from about €200,000 in 2008 to more than €1.1m this year).

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