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
April 17, 2014 -- Updated 1234 GMT (2034 HKT)
Saatchi Gallery has teamed up with Google+ for the Motion Photography Prize, the world's first award for artists working with animated GIFs.
April 14, 2014 -- Updated 1614 GMT (0014 HKT)
iReporters from across the world share photos of 27 fascinating libraries.
April 11, 2014 -- Updated 1800 GMT (0200 HKT)
CNN was on the ground at Salone Internazionale del Mobile, bringing you reports on the latest designs as well as the most exclusive parties.
April 10, 2014 -- Updated 1439 GMT (2239 HKT)
From the British Museum to the Louvre, the world's leading museums are adding outlandish new wings designed by the world's top architects.
April 8, 2014 -- Updated 1415 GMT (2215 HKT)
The secret lives of male to female Mongolians are exposed in haunting new images.
April 7, 2014 -- Updated 1242 GMT (2042 HKT)
Redditor Shystone imposed old paintings over Google Street View photos to create a series of stunning composite images of London then and now.
April 4, 2014 -- Updated 1542 GMT (2342 HKT)
Korean artist transforms her tiny studio into fantasy worlds without the aid of Photoshop.
April 1, 2014 -- Updated 0842 GMT (1642 HKT)
CNN spoke to industry experts who shared advice on how to avoid the pitfalls, and make the right decision.
April 17, 2014 -- Updated 1503 GMT (2303 HKT)
Roulette table, chandelier, Louis Vuitton cushions -- Japanese truck drivers spending big to decorate their wheels.
March 25, 2014 -- Updated 1554 GMT (2354 HKT)
Shigeru Ban, the winner of the world's most prestigious architecture award, has been using his skill to help people in disaster zones for decades.
March 24, 2014 -- Updated 1130 GMT (1930 HKT)
Need to hide from the world? Do it in luxury.
March 20, 2014 -- Updated 1755 GMT (0155 HKT)
A $14,000 jumble sale find turned into millions of dollars for a man who wanted to sell it to scrap metal dealers.
March 21, 2014 -- Updated 0405 GMT (1205 HKT)
In another display of the city's commitment to 24-hour culture, Seoul has unveiled its biggest nighttime attraction yet, in a neon-studded shopping district.
March 20, 2014 -- Updated 1556 GMT (2356 HKT)
From Zaha Hadid to Mario Bellini, take a tour inside the private houses of some of the globe's most celebrated architects.
March 12, 2014 -- Updated 1309 GMT (2109 HKT)
South African artist Ralph Ziman worked with local artisans to create ominously beautiful beaded mock bullets and AK-47s.
ADVERTISEMENT