1974 Porsche 911 Turbo (930)
These days, collector cars and classic vehicles are often viewed as assets similar to wine or fine jewelry. German banks have reinforced the narrative and have now begun suggesting clients actually invest in classic cars.
The investment advice comes from booming gains on vintage cars, especially those of German origin, in the country. Bloomberg reported on Monday that vintage Porsche 911s, for example, have gained 683 percent over their original value over the past 13 years.
It's true, the collector car market has roared to life in recent years, likely due to rock-bottom interest rates that have pushed up values of most assets. Another rather strange statistic from German banks: the local OTX classic car index, which measures the values of the top 20 most-valuable cars, increased four times over from 2005 to 2018. The OTX index gains, which mostly tracks Audi, BMW, Daimler, and Porsche cars, handily outdo the 204-percent gain in Germany's DAX stock index over the same time.
1955 Mercedes-Benz 300SL gullwing
Yet, the banks aren't advocating every client sell their stocks switch their portfolio to classic cars. Instead, a classic car can help create a well-rounded investment portfolio. And it should be the right car at the right time. According to the report, financial experts believe a car with the most potential should be valued at around $116,000 today. Under the figure, authentification, storage, maintenance, and other variables could drag down the future return.
Although rare and vintage cars continue to command big bucks, we may already be seeing the market reach a plateau. In 2017, the average sale price at the Amelia Island Concours d’Elegance dropped from $420,551 to $332,345. Classic car insurer Hagerty also tracks the market's "heat" via its own index, which dropped 7.4 points from 2015 to 2017.
There will likely always be a collector car market, no matter the case. And Hagerty has already predicted what 2018 models could one command six-figure prices and beyond.