Forget stocks and stocks, the FT and the London Stock Exchange: the truly savvy investor buys classic cars, reads Octane Magazine, and hangs out on Goodwood Racecourse. And if you’re up for a float – in terms of investment – then go straight for these red cars made in Italy. Classic Ferrari values ââare accelerating faster than heroic driver Fangio ever did.
In the past 12 months alone, the cost of premium vintage Ferraris has increased by 55%, beating competition from Mercedes Benz (a mere 24% increase) and Porsche (13%), according to Historic Automobile Group, which tracks and publishes prices.
Dietrich Hatlapa, former investment banker and founder of Historic Automobile Group, said the rising value of Ferraris and other classic names cannot be easily explained by one factor. “It’s a cocktail of things: rarity, technical sophistication, racing pedigree and continued success in competition. But what you can say is that everyone who buys one of these cars is passionate about it.”
The supremacy of the Italian marque was underscored three weeks ago when a 1967 Ferrari 275 Spyder sold for $ 27.5million (Â£ 17.5million) at an auction in California. – the highest price ever recorded at a public sale in the United States.
That climbs to what is believed to be the highest sum paid for a car, the $ 35 million paid last year for another Ferrari – the 1962 GTO 250 originally made for the legend of the British race Sir Stirling Moss.
But it’s not just the rarest and most expensive Ferraris or Bugattis that are skyrocketing, it’s a whole range of cars right up to the mass-produced production sports cars of the past such as the E-Type Jag. , the best of which can now fetch Â£ 80,000 apiece.
All of the Historic Automobile group’s numbers are fed into an index, then compared to other investment “asset classes” and released as a wealth report by high-end London real estate agent Knight Frank.
This shows that over the 12-month period to the end of June, the value of older cars as a whole increased by 28%, compared to a 12% rise for the FTSE-100 index of major stocks and a collapse of 23% in the price of gold.
Measured over 10 years, the performance of automobiles is even more astonishing, with a value up 430% against 55% for the FTSE and 273% for gold – the latter still considered a safe haven in times of financial turmoil.
Hatlapa believes classic cars can soothe an investor’s wrinkled brow in tough times. “When there is a financial crisis, some fear that their stocks and their actions will become worthless. It is reassuring to see that [car] investment in the garage. It brings a smile to your face and if you want you can go out and drive it. There is the fun factor. “
While you’re likely to see photos in the media of very famous or very wealthy car enthusiasts – think Rod Stewart, Pink Floyd drummer Nick Mason or JCB mogul Sir Anthony Bamford – Hatlapa denies buying vintage cars is an elitist activity.
âIt’s really a mass phenomenon with a huge increase in events. If you really want to get involved, like a lot of people do, you can get a vintage model, even a Hillman Imp or something, and have it in. your own garage.If you go to the Goodwood Revival race meeting next weekend, you’ll find that thousands of ordinary people have brought their own [vintage] cars. “
The Goodwood Revival, described by organizer Lord March as the Glastonbury of the motor racing world, is already sold out and follows the Goodwood Festival of Speed ââearlier this year, where nearly 200,000 people turned out.
But it’s the modern Formula 1 racing tracks elsewhere that also help create values ââfor historic cars. Ferrari’s continued success at the highest level of motorsport is considered to help keep prices high. Rarity helps, too – less than 50 vehicles were made from some versions of the Spyder. The figures on the value of cars speak for themselves, although there are reports that auction volumes are declining.
But cars aren’t the only alternative investment whose prices are rising. The Knight Frank Wealth Report also shows that old stamps increased 7% for the 12 months ending at the end of June and increased 60% in the last five years and 255% in the last decade.
Coins have risen 9% in the past year and have climbed 225% in the past 10 years.
The value of antique furniture is down 3% year-on-year and nearly 20% from 10 years ago, while fine arts are down 6% year-on-year but up 183% over the decade.
Why these changes? Andrew Shirley, editor of the Wealth Report, notes that wine (up 3% year-on-year) and art have historically been more volatile than stocks and stocks.
âThis is not only due to economic conditions, but also to changing trends and fashions in the luxury collectibles market which can quickly create and deflate bubbles. This means that the index results for an asset class may not necessarily reflect the performance of individual pieces or works of art, âhe explains.