There are many aspects of classic car ownership, with some people thinking of a vehicle as an investment. German bankers have recommended that investors should look to vintage cars as an alternative for low interest rates. Jens Berner, a car expert at Suedwestbank AG’s asset management unit said “for customers with more than 1 million euros in liquid assets, a classic car can be an attractive addition to their portfolio in terms of yield and value stability. After the financial crisis, requests for alternative investments such as art, wine or classic cars had risen sharply.”
The OTX Classic Car Index was started to compare classic cars to other asset classes. The index is composed of cars that are at least 30 years old and come from southern Germany based manufacturers. From 2005 to 2018, the OTX quadrupled. Suedwestbank calculates the index every year by multiplying model prices provided by the magazine Motor Klassik with registration numbers from the Federal Motor Transport Authority.
The OTX covers a lot of luxury carmakers such as Porsche. Porsche 911 owners saw a value increase of 683% over a thirteen year period. Managing director of vintage car market observer Classic-Analytics Frank Wilke said “classic cars can be a good investment if you buy the right car at the right time and at the right price.”
Classic cars do make good investments, but they should always be managed with caution. Berner advised people to consult an expert. “Counterfeits are a big issue, for example when a vintage car is first disassembled into individual parts and then re-assembled into two cars by mixing it with some new parts. If there are suddenly 300 cars on the market of a series of which only 200 were originally built, then something is wrong.”
Liquidity can be an issue as well. Berner suggested that customers should only invest in classic cars with a minimum value of 100,000 euros.
This kind of advice can be applied to classic car collectors in the UK. It’s always best to get as much information as possible before investing in something.