24 December, 2018 | Warren Buffett may have advised investors to ‘never love a share’, but classic cars are an alternative asset class that ignites the deepest of passions.
A 1958 Porsche 550A Spyder, known as the ‘giant killer’ for its ability to chase down larger and more powerful race cars on the circuit, sold for $5.17 million – the top result – at Bonhams’ Scottsdale sale earlier this year. The top Ferrari result at the same auction was $2.6 million for a 1972 Ferrari 365 GTS/4 Daytona Spider.
Investing in classic cars can be an exciting and extremely rewarding venture, but it’s definitely not for the faint-hearted, says Leon Strümpher, a portfolio manager at Sanlam Private Wealth, and a classic-car investor himself. ‘These beautiful machines can take you on great ups and downs, as well as bring back memories of past eras. That said, it’s an asset class that can be analysed like any other, and it’s in the finer details where the rarity lies, and the real value emerges.
‘When approaching the classic-car market as an investor, do so as you would any listed asset on the JSE. Start with price, do your research, get a good database from which to reference, and take your time. Scarcity remains one of the most important aspects of appreciating prices in classic cars. Every classic car that’s left to rust, or is scrapped or shipped abroad leaves a gap that can’t be filled. And sometimes it does involve luck. Most of the cars that will become great investments in years to come will do so because of industry changes, like the emergence of electric cars and introduction of emissions taxes.’
For more news about classic cars visit our Motoring section.