2023 Investment Trends in the Classic Car Market
Knight Frank’s The Wealth Report for 2023 indicates major growth in the classic car market worldwide.
Classic car investment trends
Unsurprisingly, investment in classic cars took a knock during the pandemic when auctions and sales were postponed.
During 2022, interest in this asset class rose significantly, with a massive 25% growth in investment over the previous year.
Sports cars from the golden age of motor racing were among the highest sellers. Buyers splashed out on rare, limited production models with unique histories or driven by the legends of the sport.
Younger collectors, especially from Asia, were the driving force behind a rebounding market that has risen by 185% in value over the past decade.
Are classic cars a good hedge against inflation?
Classic cars whose characteristics include rarity, historical significance and quality can provide a hedge against economic fluctuations. The challenge is to predict which models will exhibit the kind of explosive growth experienced over the past 10 years.
The classic car market has always been nuanced. There are strong segments and weak segments.
In the words of Dietrich Hatlapa, founder of Historic Automobile Group International (HAGI), “Broadly, the classic car market has neither a positive nor an inverse correlation with other sectors.”
“In other words, the classic car sector marches to the beat of its own drum. That’s a feature which many collectors find attractive.”
Classic cars relative to other luxury assets
In 2022, classic cars were the strongest performers after fine art, which rose by 29%. Luxury watches, handbags and fine wines lagged behind, with year-on-year growth of 18%, 15% and 10% respectively.
Forecast value of the classic car market
The global classic car market is projected to grow to US$43.3 billion by 2024. That’s according to market data and research company Statista.
If estimated prices at auction are anything to go by, the predicted US$12.5 billion increase in market value over four years is accurate.
Sought-after cars from the Fifties and Sixties are going under the hammer with reserve prices of around US$2 to US$2.5 million. Collectors are prepared to pay top dollar for original Ferraris, Porsches and Mercedes.
New entrants in the market have an appetite for later model vehicles, including luxury cars and sports cars from Japan and Europe. A wider demographic, bolstered by wealthy millennials, is expected to push growth over the next few years.
A way to leverage the value of a classic car
If you own a high-value classic car, you don’t have to sell in order to unlock its cash value. Instead, you can opt to use a classic car to secure a short-term, asset-based loan.
Pawn My Car is the South African specialist when it comes to loans against classic cars. We offer loans against a wide range of classic and luxury vehicle models, with competitive interest rates and no hidden costs or penalties.
Loans are approved within 24 hours. No credit checks are conducted. Pledged assets are insured and securely stored.
For more information, contact us on 0861 112 866 or simply complete and submit our online application form.
