Skip to main content
Part of complete coverage on

How to get rich quick: Buy a classic car?

By Stephanie Ott, for CNN
December 2, 2013 -- Updated 1346 GMT (2146 HKT)
The 1952 Jaguar "C-Type" was last night's biggest draw at Bonham's historic car auction, fetching $4.8 million when the hammer went down. The 1952 Jaguar "C-Type" was last night's biggest draw at Bonham's historic car auction, fetching $4.8 million when the hammer went down.
HIDE CAPTION
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
The allure of classic cars
<<
<
1
2
3
4
5
6
7
8
9
10
11
12
>
>>
STORY HIGHLIGHTS
  • Auction house Bonhams sold Ringo Starr's vintage car on December 1
  • Classic cars rose 430% in value over the past decade
  • Investing in classic cars bears risks such as maintenance costs and lack of liquidity

(CNN) -- If investing in credit default swaps or commodity derivatives doesn't exactly fill your heart with a sense of wonder and excitement, then a product with a little more va-va-voom could be a surprisingly viable alternative: vintage cars.

Records have been tumbling recently for classic cars sold at auction. Last week, a 1964 Ferrari went for $14.4 million at the "Art of the Automobile" sale, smashing the previous record of $6.9 million for the same model. Sotheby's sold off 31 classic and concept cars and auto-related items for nearly $63 million in just over two hours at the auction in New York City.

Over the past decade the average value of classic cars has risen by 430%, according to Knight Frank's Luxury Investment Index. This compares to 273% for gold and a comparatively meager 55% for the FTSE 100 over the same time period.

Read: Take a peek at the world's most exquisite libraries

Classic car investing can be lucrative
This 1960s car sold for how much?!

Indeed, in only July a 1954 Mercedes-Benz was snapped up for $29.6 million, the highest price for any car ever sold at a public auction -- dwarfing the previous title-holder by $13.3 million.

And just yesterday, Ringo Starr's 164 Facel Vegal was auctioned off for a cool $553,000 alongside a host of historic cars at Bonham's, during a series of lots that netted the auction house a cool $27.6 million of sales.

"The fact that a car was previously owned by a celebrity will more often than not push the value up, but of course it depends on who the celebrity is" said Bonham's spokesperson Chloe Ashby.

"The demand for vintage cars is rising," she added. "Along with jewelry and Asian art, cars are now in the top three collecting categories."

Dietrich Hatlapa is founder of the Historical Automobile Group, an independent investment research house that specializes in classic cars. He says that vintage motors offer a unique appeal, particularly in the wake of the financial crisis.

"People have been more drawn to tangible assets over the last 10 years. Classic cars are fun, you can drive them and they have become a lifestyle as well. It's also a way to pass on wealth from one generation to the next."

Read: Rare Psalm book sells for $14.2 million

Someone shouldn't go into the vintage car market for pure investment purposes but have a passion for classic cars.
Dietrich Hatlapa, Historic Automobile Group founder

The value of classic cars has jumped 39% this year alone, according to the Historic Automobile Group Index (HAGI), which tracks the financial performance of 50 rare and exotic classic cars.

However, there is a sense among industry experts that these growth trends will slow down. "I would be surprised if the demand and value can continue at the same rate over the next 10 years," said Andrew Shirley, editor of the Wealth Report.

There are also risks to investing in vintage cars, as opposed to the more conventional alternatives, like bonds.

"The big difference to mainstream investment options is the lack of liquidity. You can't sell your car next door," Shirley said.

"It will take a lot of research and a long time to find someone to sell your car to for the right price. There are also slight fluctuations in trends, so it might be that at that time an Aston Martin isn't as much in demand as a Ferrari."

It's also not a one-off investment -- there can be substantive costs involved in maintaining the car. "You have to look after them to keep them in good condition, especially if you want to keep driving," Shirley said.

Accordingly, Hatlapa advises against throwing your money at a classic car if money is all you're hoping for in return.

"Someone shouldn't go into the vintage car market for pure investment purposes, but have a passion for classic cars," he said. "The most valuable return from owning a vintage car is the satisfaction that you have something you're passionate about."

ADVERTISEMENT
Part of complete coverage on
CNN Style
July 17, 2014 -- Updated 1046 GMT (1846 HKT)
L.A. artist Christine McConnell styles herself as a glamorous pin-up, but her sumptuous cakes evoke the Tim Burton-esque realm of fantasy.
July 7, 2014 -- Updated 1651 GMT (0051 HKT)
A new generation of creatives are taking code to a more colorful realm, using digital media to push the boundaries of art.
July 3, 2014 -- Updated 2004 GMT (0404 HKT)
From space vacuums to dial-less phones, 50 objects offer a colorful glimpse into daily life behind the Iron Curtain.
July 1, 2014 -- Updated 1536 GMT (2336 HKT)
Every June, 200,000 perfectly styled people attend the Glastonbury Festival, known as much for the music as the glamor on its muddy fields.
June 23, 2014 -- Updated 2324 GMT (0724 HKT)
What does an acclaimed chef do for an encore after he's closed the best restaurant in the world? Starts looking for the key to all creativity.
June 26, 2014 -- Updated 1255 GMT (2055 HKT)
French photographer takes us on a nostalgic trip to the golden age of Hollywood with images of glamorous movie palaces of the art deco era.
June 25, 2014 -- Updated 0854 GMT (1654 HKT)
BASEL, SWITZERLAND - JUNE 17: Visitor walk next to the artwork 'Continuel Mobile - Sphere rouge' by Michelangelo Pistoletto in the Unlimited section of Art Basel on June 17, 2014 in Basel, Switzerland. Art Basel one of the most prestigious art fair in the world, which runs until the 22nd of June 2014 will showcase the work of more than 4,000 artists selected by 300 leading galleries. (Photo by Harold Cunningham/Getty Images)
Over 92,000 people flocked to Art Basel, a top international contemporary art fair, to see works by the likes of Damien Hirst and Jeff Koons.
July 15, 2014 -- Updated 1311 GMT (2111 HKT)
CNN bring you the latest from the Olympics of architecture, this year directed by the Pritzker Prize-winning architect Rem Koolhaas.
June 18, 2014 -- Updated 1130 GMT (1930 HKT)
After years of research art experts and scientists have found a painting hidden underneath Picasso's 1901 masterpiece "The Blue Room."
June 10, 2014 -- Updated 1654 GMT (0054 HKT)
A convoy of the world's most luxurious supercars drives from England to the Monaco Grand Prix, causing a stir along the way.
June 10, 2014 -- Updated 1654 GMT (0054 HKT)
This is what happens when seven world-class architects design bus stops in a tiny Austrian village.
June 3, 2014 -- Updated 1120 GMT (1920 HKT)
A new exhibition in New York shows that when it comes to the art of origami, it takes a lot more than just folding paper.
May 26, 2014 -- Updated 0607 GMT (1407 HKT)
Vivid Sydney, a festival of light, music, and ideas, sets the sails of the iconic Sydney Opera House alight.
May 23, 2014 -- Updated 1321 GMT (2121 HKT)
Atlanta's High Museum of Art is showcasing 17 visionary concept cars worth millions.
May 12, 2014 -- Updated 2122 GMT (0522 HKT)
Flamboyant gowns, sparkling jewels and A-list celebrities.
May 19, 2014 -- Updated 1543 GMT (2343 HKT)
Wealthy Asian collectors propel sales sky-high at the annual art extravaganza.
ADVERTISEMENT