Collecting classic cars is now a game for the wealthy as the prices of these desirable vehicles have shot up over the past decade.
- In the last decade, vintage-car prices have risen 185%—more than other luxury items like art, watches, and wine.
- As electric vehicles (EVs) rise in prominence, classic, gasoline-powered cars may become an even more valuable novelty item.
- The collectible car market is expected to reach $18.7 billion in 2024, Bloomberg reports.
Why it’s news
As the car market changes, there could be unprecedented shifts in the collectible car market. If EVs reach the expected levels of popularity, gasoline-powered vehicles will become less common and a more valuable collector’s item. Classic cars that lack modern-day features would be an even more unusual addition to the lineup.
Several major car companies have committed to stop producing gasoline-powered vehicles in the next 15 years. Regulations like the European Union’s ban on the sale of gas vehicles by 2035 have sped up manufacturers’ plans.
For some of these wealthy collectors, owning classic cars is an investment. Unlike the stock market, classic cars cannot be hedged or shorted, but they are also unaffected by the rest of the economy, The Daily Upside reports.
Unlike other investments, classic cars seem relatively insulated from the changing world. This year, investors are watching classic car prices grow. In 2022, the 1992 GMC Typhoon had an estimated value of around $20,600. At the beginning of this year, its price had jumped 70% to $35,000, according to Classic.com.
Classic cars are one of the most popular passion investments among the wealthy. In a survey of 500 private bankers, wealth advisors, and family offices, around 34% said that their client’s go-to passion investment was cars, The Daily Upside reports.
Environmental awareness could have a further effect on the classic car market. When discussing emissions output, analysts typically are not considering classic cars. These vehicles are mostly meant for show and are not driven often enough to make a significant carbon contribution. Still, a growing distaste for gas-powered cars has led some collectors to modify their vehicles.
Some collectors have converted their classic cars to EVs, believing that this switch will make them more valuable to consumers in the future. For some collectors, this has paid off. For example, a converted MG MGB Roadster jumped from around $5,000 before its conversion to $108,000 after, The Daily Upside reports.
However, not all collectors are on board with this method, saying that converting the vehicles takes away what makes them special.