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Classic Car Prices Inflated By Investors

By raccars Published

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There's good news for those who invested in a classic car over the last year, as a report due to be released by the Hagerty Price Guide, shows an 8.4% increase in values for the first half of this year. The report by the specialist insurer suggests that investors are seeking out alternative assets, with classic car prices increasing by 487% over the last decade, above art values which are up by 252%. This kind of alternative investment isn't subject to the capital gains tax which affects the more traditional assets, such as bonds and shares.

2014 set a new record for a classic car sale at auction, when an investor paid £24 million for a 1962 Ferrari 250 GTO in California. The Hagerty report names the Fiat Dino 2000 Spider as the classic with the biggest appreciation in the UK market, going up 45% from £45,000 a year ago, to £65,050 now, closely followed by the Fiat Dino Coupe at 43% and values up from £21,675 to £30,900. The Lamborghini Countach LP400S Coupe is next, gaining 42% from £21,050 a year ago, to £29,850 in May.

Data analysis saw cheaper marques from the Seventies and Eighties outperforming the more traditional supercar brands, such as Ferrari and older classics. For example, the Mercedes-Benz 300SL Gullwing Coupe remains very desirable but has hardly gained in value over the last 12 months, sitting at about £1 million.

The top 20 list of biggest gainers was also marked by some popular classics. The original Volkswagen Golf GTI was in sixteenth place, with appreciation of 33% in just a year, now worth £10,463, up from £7,890. In fact, none of the most appreciating classics boasted an average value above £500,000 and most fall below £100,000 in average value, showing the top end of the market is slowing down considerably.

The report suggests that keen investors turn their attention to Fords for future appreciation, particularly the Mk1 Ford Cortina, with prices starting at £4,800. The Seventies Mk2 Escort RS 2000 as seen in TV series, 'The Professionals,' starts at £7,600. Land Rovers are recommended as another good investment prospect, Series I models in particular. The later Series II, IIA and III can still be found for less than £10,000 and early Range Rovers with two doors for £9,100, but prices are expected to rise very quickly.

Investing in classic cars is not considered a sensible strategy by financial advisers.

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