1962 Ferrari 250 GTO bearing chassis number 3387 - Image via TalacrestEnlarge Photo
For the past few years, some of the most solid investments a person could make were in classic cars. From 2012 onward, the value of vintage models has skyrocketed to heights the market has never seen before. But, nothing lasts forever.
The most recent report on the state of collectible items shows classic car values have (finally) dipped.
Coutts Bank showed the classic car market dropped 10.4 percent in 2016, reports The Guardian. The private bank says the market began to show major signs of appreciation about 10 years ago, when interest rates were brought close to zero following the global financial crisis, but post-2010 is when values began to soar. Since Coutts Bank began its value index in 2005, classic cars have shown a healthy return save for 2016's dip.
1957 Mercedes-Benz 300SL RoadsterEnlarge Photo
However, the bank's index shows prices at the top end of the market remain very healthy, while more typical classic cars continue to decrease in value. In turn, a gap has begun to widen between what is deemed highly desirable and merely collectible. Classic cars in Coutts' index need to sell for more than $500,000 and be sold more than 10 times to capture data and a solid timeline. Fun fact: seven of Coutts' top 10 classic cars sold are Ferraris.
Although the data compiled only shows 2016 values, the trend seems to have continued into 2017. The 2017 Amelia Island Concours d’Elegance brought in almost $20 million less than in 2016, and the average sale price of a car dropped almost $100,000. In April, Hagerty's classic car market index showed the industry was at its lowest point since 2012. Hagerty's all-time high came in 2015, which may have been the classic car market's peak in this current cycle.
What should savvy investors look into next? Photography and rare musical instruments—both showed enormous spikes in value in 2016. But if a car is a must, perhaps one of these babies will tickle your fancy.