Forget Investing in Property and Shares – Classic Cars Deliver a Staggering 469% Return.
During the last year, the classic car industry has been the main topic of conversation in the motoring world, especially amongst investors, collectors and car enthusiasts. Classic cars have become global news, with major media organisations all over the world reporting enthusiastically on their increasing values and investment potential, as they continue to outperform stock markets, property, jewellery and just about every other tangible asset.
We hear a lot about the “classic car boom” and “classic car investments”, but do we actually understand what is driving this growing interest, and what are the advantages of such an investment?
The classic car market famously boomed in 1988, but crashed in the early ‘90s, with some prices collapsing by as much as 40%. Many commentators were sceptical when classic car values started to rise again after the millenium, but as it emerged, the circumstances are different this time.
Nowadays, cars are valued for their history and provenance, rather than purely on their condition, as was the case in the ‘90s. There is unprecedented demand for quality classic and historic cars, as their numbers diminish year on year and more new buyers enter the market. With growing interest from places like China and India, prices have soared and the market seems to be heading in only one direction.
According to the luxury investment index set by Knight Frank, classic car values have increased by 469% in the past 10 years. Over the same period, luxury London homes and the FTSE 100 have risen by 135% and 51%, respectively. Similarly, the Historic Automobile Group International (HAGI), an independent investment research organisation, reported that classic cars have been one of the best performing investments over the past decade, with the value of exceptional historic cars climbing 12% in just the last year alone. Compared to the beginning of 2009, the price of such cars has risen dramatically, by up to 163%.
The UK classic car industry, which is estimated to be worth over £6 billion, is now considered to be the most sophisticated in the world. During the last year, UK market growth has been steady, and with savings rates expected to continue at record lows for the foreseeable future, classic cars could be considered a better investment than properties.
Most importantly, unlike other traditional investments such as stocks and shares, classic cars are not liable for capital gains tax on any profit, as HMRC views cars as depreciating assets. Moreover, any car that was made before 01 January 1973, and is registered as historic is exempt of road tax and MOTs are no longer compulsory for a car built prior to 1960.
Equally important, unlike modern cars, classic cars tend to hold on to their value and their value is likely to appreciate. Therefore, by investing in a classic car, not only are you likely to get a good return on your investment, but most importantly you get the pleasure of driving something unique, something that stands out from all the computer-driven modern cars that now dominate our streets.
Another factor to consider is the social side of motoring. With a vibrant classic race scene and events such as the Silverstone Classic and Goodwood Revival, as well as numerous organised owners clubs and tours, classic cars are not only an amazing mechanical piece of history but are also now a core part of an exclusive lifestyle.
The increasing use of finance is also driving growth in this market, allowing buyers to fund and secure some of the finest cars in the world. Oracle Finance enables collectors and investors to acquire their dream car by creating competitive finance packages, tailored to each individual’s precise needs. Our specialist classic car team has over 20 years experience in the industry, and would be more than happy to assist you with any of your requirements. Whether it’s financing, refinancing or equity release you’re looking for, we always do our best to create the perfect finance solution for you.