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Classic cars outperform art and equities

Monday, March 25, 2013 - 02:49

March 26 - Soaring returns for investors parking their money in classic cars has seen the market accelerate ever faster, but why buy an XKSS over stocks or even stamps? Joel Flynn puts his foot down to find out more

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It's Christmas 1949, and Clark Gable is presented with a Jaguar XK120 worth just over £1,000. This is the same car, still in Clark's Gable grey, today. Only now, says classic car expert Dave Selby, it's worth a whole lot more. SOUNDBITE: Historic Autogroup International Senior Analyst, Dave Selby, saying (English): "Jaguar XK120s have values anything from 50,000 to 300,000 pounds for ordinary cars, but this is not ordinary. It belonged to the actor Clark Gable, and this car has just sold for 1.5 million pounds." Classic cars like this have become a huge market for investors. And they don't have to have had famous owners. The Jaguar XKSS sells at prices 275% higher than in 2008. And it's a global market. Richard Graylen is business manager at JD Classics in Essex. SOUNDBITE: JD Classics Business Manager, Richard Graylen, saying (English): "The total global market is somewhere around 35 billion (pounds), and those are the cars that have quantified, so it's very much a global reach. More and more people from abroad are catching on to the idea of investing in classic cars." The classic car industry is worth nearly four billion pounds to the British economy alone. But not all models offer the same returns. Values can fluctuate quickly depending on fashion. And Selby says that's nowhere more evident than in the Ferrari market. SOUNDBITE: Historic Autogroup International Senior Analyst, Dave Selby, saying (English): "Over the last four years, or so, Ferrari has actually underperformed the overall market as we measure it. There are some models, remarkably, that are worth no more now than they were in 1989, which was the height of the classic car boom." Dave and his company created a classic car index in 2008. It measures the value of the world's most expensive classic cars. Since then on a month by month basis, the index has soared. It's outperformed wine by around 250%. And art would have earned you just a a quarter of the returns of classic cars in the same period. It's also outperformed global equities, and only gold has managed to keep up. Of course you can't drive a bar of bullion. And that's why Liam Cardiff keeps coming back to the classic garage. SOUNDBITE: Classic car investor, Liam Irish person, saying (English): "Investable entity and quality cars, there's always going to be a market for them, and from my point of view, there's no risk. And you know what? Even if there was a risk, I still want the car so I'm going to enjoy it." Classic cars may not offer annual returns, and owners will of course need to look after them. But unlike investing in stamps or a stock portfolio, very few other investments feel like 130mph.

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Classic cars outperform art and equities

Monday, March 25, 2013 - 02:49