Well people are always asking me for alternative investments. I respond that in most cases of time Classic Cars are one of the very best alternative hard tangible investment choices. But we are not talking your typical hot rod your uncle built when he was a kid.
Were talking truly historically documented marques. Not always European, but most often the iconic brands, Mer-Benz, Ferrari, BMW, Bugatti, Alfa Romeo, Jaguar, Maserati, Aston Martin, Roll Royce just to name a few. There are also a limited number of American Brands like Duesenberg, Cadillac, Cord, & Shelby that fall into the same club. These investments grossly out perform even the strongest of Stocks, Bonds and some cases even precious metals bull markets!
These brands produced cars that have even during economic “doldrums” of the last several years. Classic Cars have all of the true requirements for an honest investment.
All of the classic marques only produced very limited numbers of any model. Often during the period of the from 1970 back to the 1920’s many of the most coveted models of automotive history seldom had even 500 in total production. Most often very tiny production runs of 20-50 cars were every built.
Needless to say, classic cars also includes classic race cars that were owned or drive by very famous owners, who could have also been the driver. Or even better the winning driver, owner and team. These famous race cars may have also been the first or only car of a particular to ever win a famous race or championship. Classic cars often have ultra rare “coachwork” designers. Such as Zagato, Vignale, Touring, Ghia, Bertone, Figoni et Falaschi, Pininfarnia, just to name a few.
So when you combine all of the possible requirements for a great investment. Classic Collectable Cars, Motorcycles, Aircraft have a true ability to out perform most of the strongest stocks over almost any time period. Also these cars create a true lust among automotive collectors all over the world. The industry that supports auto collectable investments, companies like Gooding & Co., Bonhams, RM, Christies and many other auction houses is always trying to help people with all levels of money for investments in cars, motorcycles, aircraft to find new buyers who are always willing to pay more.
So tangible hard assets investments are all to often better than owning most stocks. With Cd’s, TIPS, Bonds paying ROI and are calculated below even 1%. The actual interest is eaten alive by the inflation that your federal government and wall street tell you does not exist. Like precious metals, when the price keep holding and going higher over 3-5-10 yr time frames the reality is that the best proof of inflation. Now to what matters and another excellent example of how classic cars have just this weekend proven again that stock are not worth the risk.
This weekend in August is know around the world as the Monterey Classic Auto weekend. Four of the most important events in the classic automotive car culture are taking place this weekend in Monterey. The bigger news is the outstanding new world record prices paid for classic cars at the legendary auctions this weekend.
In 2012 the combined sales of classic collector cars set a then record of $220 million USD. Which was a 33% increase over the 2011 sales totals. Now because the US economy has been such a mess and White House economic policy non productive.
The Classic collectable market has been, once again the only bright spot for alternative investments.
This year investors are looking again to collector car auctions as a better choice than equities or other traditional investments.
Friday night investors pulled out there wallets and began what could be rush to buy multimillion dollar collector cars, on a scale that has not been seeing over 20 years.
A Ferrari 275 GTB/4 NART Spyder set an amazing world record all time high price for any Ferrari ever sold at auction. $27,500,000.00. In less than a year the price index for collectible Ferrari’s has surged by an average greater than 34.3%. But several models like the 275 GTB/4 have increased by price multiples! The proof of just how strong these rare cars rally to unthinkable prices. Can be seen also in the recent auctions in Arizona during the this spring. Gooding and RM sold two Ferrari’s both 250GT models from the 50’s and 60’s. Each of these cars sold for over $8 million each!
The Monterey Auctions on Saturday night provided a better estimation for 2013 the combined totals for sales will blow away the 2012 record of $220 million. The total for 2013 is now looking like sales exceeding $325 million. Need I remind the people that in 2011 the highest recorded price paid at auction for a Ferrari, was an unthinkable $16,400,000.00 for a 1957 Testa Rossa prototype in August of 2011.
The world record paid for any car still stands at $35 million for a private sale, back in June of 2012 for the Ferrari GTO made for and driven by Sterling Moss.
But Monterey this week has show that investors are again bidding and buying is not a fluke. Friday night also saw another rare Ferrari a 375MM racer, Spider that sold for 9.08 million USD. Again the basic of true investing is that this car was on 1 of a total of 12 ever made. The car had been in the collection of one family dating back to 1968.
A 1939 Mercedes-Benz 540K Special Roadster sold for $7.5 million. Bonhams also chipped in with the sale of a 1931 Bentley LeMans Roadster, Supercharged 4.5L engine that we for a whopping $4.7 million. Which might well be a all time record for a Bentley and that model in particular. The Goodings auction for Saturday night is expected to bring may additional record prices. A total of 160 collectable cars with 37 of these car expected to each bring a minimum of $1 million bid.
– World Auction Records Achieved “Goodings & Co.” on Saturday –
- 1957 Ferrari 250 GT 14-Louver Berlinetta, a record for a Ferrari 250 Tour de France at auction $9,460,000 (Lot 39)
- 1997 McLaren’s F1, sold for $8,470,000, a record for the marque at auction (Lot 51)
- 1935 Avions Voisin C25 Aérodyne sold for $1,925,000, a record for an Avions Voisin C25 Aérodyne (Lot 47)
- 1968 Ferrari 330 GTC sold for $946,000, a record for a Ferrari 330 GTC (Lot 5)
- 1985 Ferrari 288 GTO sold for $1,512,500, a record for a Ferrari 288 GTO (Lot 7)
- 1965 Ferrari 330 GT 2+2 Series II sold for $368,500, a record for a Ferrari 330 GT 2+2 Series II (Lot 12)
- 1964 Porsche 904 Carrera GTS sold for $1,595,000, a record for a Porsche 904 Carrera GTS (Lot 24)
- 1957 Dual-Ghia sold for $495,000, a record for a 1957 Dual-Ghia (Lot 25)
- 1965 Ferrari 500 Superfast sold for $1,980,000, a record for a Ferrari 500 Superfast (Lot 28)
- 2002 Ferrari F2002 sold for $2,255,000, a record for a Ferrari F2002 (Lot 34)
- 1956 Porsche 356 1500 GS Carrera Speedster sold for $1,485,000, a record for a Porsche 356 1500 GS Carrera Speedster (Lot 43)
- 1996 Porsche 993 GT2 sold for $506,000, a record for a Porsche 993 GT2 (Lot 48)
- 1963 Mercedes-Benz 300 SL Roadster sold for $1,622,500, a record for a Mercedes-Benz 300 SL Roadster (Lot 53)
We want to thank Jannell Grigsby, Media Relations at Gooding & Co, for the updated list of Gooding & Company for her cooperation to help provide examples of World Records paid by bidders at Monterey, California this weekend. The real issue is that investing in tangible hard assets is a great deal for millions for investors. Do not use all you risk capital. As any investment is a risk. Unlike Stocks, bonds or other investment instruments. You can drive your investment and get more years of enjoyment. Investing in collectable cars, motorcycles, aircraft, art, jewelry, books, stamps is a niche. Stick to something you know and really love to own.
Do not be in a hurry to flip a collectible investment. Look to hold it for at least 5-10 years. Also the rarity of the collectible cars assures that your limited and rare collectable car will always be in greater demand. Even the McLaren 1997 F1 that originally sold for just under a million dollars US.....sold this weekend for a multiple of 8.4 times it original purchase price! That gained value only took 16 years.
So when you hear some chide you about how gold or silver does not pay dividends, you can remind them that most stocks also do not pay dividends. When Bonds yield 6% or higher stocks would need to yield over 10% to be worth the risk. But your classic collectable car also gives you a level of enjoyment no paper investment can offer. You will also find that a larger group of automotive investors sleep better than any hedge fund manager.