The prices of rare classic cars are rising at extremely fast rates and vehicles are now emerging as a surprise option for high-stakes investors, even for they aren’t interested in taking the cars for a spin themselves.
An increasing interest in high-end vintage cars has led to prices rocketing by about 30% over the past decade. By comparison, the MSCI stock market index has risen just 10.5% and gold by only 4.5%.
A classic Australian car like the 1968 HK Monaro GTS 327 was bought out of the card yard for $3796. Now it is being sold for more than $350,000. A 1971 XY Falcon GTHO Phase 3 recently sold for $1.2 million – 218 times its original price.
Mike Selby, owner of Australian Muscle Car Sales, told The Australian Financial Review classic cars have “appreciated more than a waterfront house in Vaucluse.”
Mr Selby explains this price rise: “There are so few. The market is limited, money is cheap, people are not travelling overseas but still want to enjoy life.”
While many on the market are car tragic’s, attempting to cling on to history as modern cars become less customised and automobile production grows more autonomous, some are in it just for the investment opportunities.
Lex Pedersen is the portfolio manager of Chrome Temple Investments and runs the Mach 1 fund, designed for investors who have a passion for prestigious vehicles. The fund targets limited production models that appear set to rise in price over the coming years.
However, Mr Pedersen makes it clear where he stands.
“A collector leads with their heart. We take an unemotional approach. We put results before romance.”
The Mach 1 fund has a minimum investment of $100,000 and targets an annual return of eight to 12 percent.
These classic old cars can even be purchased by a self-managed super fund. Although you won’t be able to actually get behind the wheel if used for a super fund – the cars must be held in storage rather than being used or leased.
A quick yet important note before you close this tab and empty your bank account on an old school car: you’ll need sophisticated knowledge of cars and their functioning, as well as the resources to research previous owners of the car, how often it’s been restored, how revered it is in car collecting communities and plenty more.
So while the path to becoming a vintage car collector or investor is far from a simple one, there’s undoubtedly something satisfying about seeing these sleek old vehicles turning heads as their value keeps rising.