The classic car market has definitely seen its ups and downs just like the stock market in the last couple of years, but this begs the question how has the classic car market “performed” in comparison to stocks?
Believe it or not, Hagerty Insurance Co. (Hagerty insures many classics against loss and/or damage) actually has come up with a way that they track the values of classic cars in much the same fashion as the stock market in order to see which one is a better investment over time. Hagerty currently has seven different “collector car indexes” that are kept up with on their website ( Hagerty.com). These market trend indices are a little hard to find on the site, but if you click on “vins and values” on the bottom of the home page under “Articles and Resources” and then click on Market Trends you will be at the collector car index page where all seven of the different indices can be chosen. The different indexes are:
1. Blue Chip
2. British Cars
4. Muscle Cars (my personal favorite)
5. German collectibles
6. 1950s American
7. Affordable Classics
Each fund is made up of different models and that is explained on the website when looking at the fund’s performance chart. For example, The Muscle Car index is made up of 15 models and measures their increase or decrease in value over time. The values of the cars in the fund are pretty much determined by various auction results and appraisals. Each fund has its own commentary provided as to how that fund has performed and to some extent what expectations may be in the future.
A quick overview of this tells us that muscle cars have been pretty flat in performance for the last three or four years and that 1950s American cars are still down somewhat from the 2007 and 2008 peaks. The affordable classics index (representing classics under $30,000) is very revealing in that it has been the most volatile, but seems to be peaking at an all-time high right now.
Meanwhile the Blue Chip index is reported to have increased over 80 percent in the last five years – I would venture to guess that most investors in the stock market have received nowhere close to that kind of appreciation.
One other index that I might like to see would be that of an “old pick-up truck” index as that area of collecting is absolutely on fire. Trucks are hot right now and it doesn’t matter if they’ve been restored to original or been customized to the hilt. A 1936 Dodge Brothers pick-up that had been completely customized sold at auction this past weekend for $90,000. We can all agree that is serious money.
Many “experts” discount the high values of collector cars with the assumption that as the “baby boomers” die off in the next 20 years that the market for these cars will collapse accordingly as there will be no interest in them. I guess time will tell the tale, but its been my experience that rarely do antiques and collectibles go down in value.