Alternate Investments vs Traditional Portfolios
Fueled by passion and the desire for strategic investment-making, the classic car market is gaining momentum. Once just prized possessions, collector cars are now being recognized as alternative investments, offering diversification beyond traditional assets. Many classics continue to appreciate in value—often outperforming traditional investments like stocks and bonds over time.
Performance in the field
For much of the last two decades, the same amount of money invested in high-end, exclusive, sought-after classic cars suggested a higher return than the stock market.These collectible assets become noteworthy investments during times of uncertainty, as pricing and value tend to be tied to scarcity and emotional attachment, rather than the inevitable and unpredictable fluctuations of the economy.
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A Growth Market picking up speed
As demand for collector cars from iconic brands like Ferrari, Lamborghini, Porsche, and Mercedes continue to rise, these vehicles are becoming increasingly complex to acquire. This scarcity adds to their allure and value, making them highly sought-after assets.
$51.3B
Global MarketThe Global Collector Car market is substantial and growing. In 2021, it was valued at $31.1 billionand is projected to reach $51.3 billion by 2028.
$19B
US MarketIn the United States, which holds the largest share of this market, revenue was $15 billion in 2020and is expected to increase to $19B billion by 2048.
Passion-driven Value
Luxury cars stand out as investments because they offer something rare - a deep emotional connection owners feel to the asset.. In fact, classic cars recently ranked as a top passion investment among a selection of ultra-high net worth global investors. And according to a Q4 2023 luxury investment index, data showed that classic cars recorded an impressive 82% price increase.
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Even more, while Wall Street elites have always hedged their traditional investments with alternative investments like automotive assets, a new wave of younger enthusiasts are catching the car bug. Classic car buyers have expanded in today's market beyond the baby boomer generation to include those from Generation X, millennials, and Gen Z.Sources: Frank Knight; Hagerty, Market Trends 2023; IA Magazine