“STYLISH INVESTMENTS” - CLASSIC CARS AS FINANCIAL ASSETS

 
 

Investment Property. Cultural Possession. Tangible Asset.

In times of low interest rates, banking and debt crises, the classic automobile has acquired a new meaning. From a plaything only affordable to a small circle of those who already have everything they need, the vintage car has been promoted to an investment property for cool, calculating investors. An investment that not only gives much more pleasure than traditional assets, but also higher returns and security. 

In contrast with, for example, share ownership, customers have a tangible asset in the form of a classic car and have unrestricted property rights to it. More and more people are now realising these benefits. According to a recent study by Mercedes-Benz Classic and Motor Klassik magazines, approximately 15 million citizens are currently interested in classic cars - 1.2 million already owning one.

 

The DAX share index is well-known. DOX is not a spelling mistake, but the "Deutschen Oldtimer-Index", which measures the market performance of classic automobiles. The index has been calculated since 1999 by the German Automotive Industry Association (VDA), and is based on the value assessment of 88 different vehicle models. It is therefore a serious measure to compare vintage cars as an investment with alternative investment opportunities. Over the period 1999 – 2009, the DOX recorded a huge increase. In comparison, the DAX was not even able to preserve its capital value. The current trend seems also positive for investors - in 2013 the DOX advanced 8.1 percent (2012: plus 4.2 percent). 

 

The real opportunities offered by the classic car market are, however, not really represented by these numbers. This is because the DOX only considers classic cars that were produced in large quantities. Pre-war cars, exotics, unique and original or faithfully restored vehicles are not reflected in it. It is these vehicles that usually have a much higher potential than other investment choices. So, at the auction during the Goodwood Festival of Speed in 2013, a Mercedes Type W196 Formula 1 racing car was sold for $24 million. The sale of a Ferrari 250 GTO by Bonhams auction house in Pebble Beach in 2014 reached a record price of $38.1 million exemplifying the current trend to invest in high quality assets. 

 

Not all Classic Cars are Equal

Our global presence at automotive trade events, such as the Bund Shanghai Classic or the Pebble Beach Concours d'Elégance, confirms our opinion of this positive yield development. A number of currently developing markets, including Asia, South America and Central America, are contributing to the growing demand for classic cars. In this exciting, growing market, Arthur Bechtel Classic Motors is your partner in the development of a customised portfolio.