Experts from Hagerty Classic Car Insurance have released a report that looks at collectibility and what top vehicles will likely be good investments.
What Is "Collectible"?
In its simplest form, a car is considered collectible when it is “the fun car you don’t have to have,” says Hagerty President McKeel Hagerty. From a valuation standpoint, a car becomes recognized as collectible once it is fully depreciated and has started increasing in value. It is fully collectible once it has appreciated past its original purchase price.
“The general rule of thumb is it takes 25 years for a vehicle to fully depreciate and start climbing in value,” Hagerty said. But in the past few years he has seen enthusiast-oriented vehicles (think 2000s-era Pontiac GTO) fully depreciate in 10-15 years before they start their climb. That’s when it becomes interesting—if you’re smart about it, you can find some pleasantly undervalued automotive gems that, given a few years, will retain and even increase in value.
What pushes the pricing? The usual things: How many of them were made, how well they fared on the racetrack, how beautiful they are, and the veritable prestige of their mother brand. It explains why, say, a Honda Accord is not collectible and a Ferrari 488 is.
“Most modern cars drop in value immediately and keep going down and never come back,” said Karl Brauer, the senior editor of Kelley Blue Book. “But if something is truly collectable, after some time, they will eventually swing back up and keep going. It just takes more than a year or two.”
How to Spot a Gem
“If enough time passes, almost anything is collectable, and that includes cars,” Brauer said. “Any sort of special car with an enthusiast following, including Camaros and Mustangs, if you stick it away for 30 years and don’t drive it much, it’s going to be collectible.”
In today’s market, and because of platform sharing (what automakers do to save money—they create one version of an underbody, as it were, for a model they can sell globally rather than many different versions tailored to specific regions), the sub-$100,000 luxury car is not that much different from a brand's nonluxury counterparts. They're all pretty good; the differentiation relies mostly on options and branding.
“If you have a car—at any price–that is extremely beautiful, it helps a lot,” Brauer said. “But you really have to think about how long you’re willing to wait.”
Of course, to really reach the highest echelon of collecting, you have to go exotic. Most Ferraris, Lamborghinis, Aston Martins, Bugattis, McLarens, and the like will be highly collectable, so it’s interesting to consider the lesser-known versions of these brands.
What to Watch For
Thinking of making a purchase with Bitcoin? In today’s market, the fastest-growing trend is the affinity for “poster cars” of the 1980s. The kids who grew up with those cars on their bedroom walls and in popular TV shows are now at a point in life to start collecting cars.
With newer items, avoid anything too utilitarian. Or at least be prepared for it to take twice as long to appreciate—a vehicle that is valued for practicality will take much longer to become collectible than a vehicle sought after for its performance and drivability appeal.
“Vintage station wagons now have a cult-like following and do show up at car shows,” Hagerty said. “But it took more than double the amount of time than the performance vehicles of the same era.”
The thing to remember is that cars should be enjoyed. Virtually any well-preserved auto example that is 30 years old will find a willing buyer who will appreciate it for more than just a basic form of transportation. So buy something you will have fun using. Cars must be driven to fully appreciate their mechanics and beauty—the investment value will follow naturally, if you’re patient (and gentle on that stick).
“It’s safe to say the majority of vehicles purchased for the fun factor will become collectible sooner,” Hagerty said. “But you should give 100 percent consideration to it being a fun car that you want to own and be less concerned about how the masses will view it in the future.”
In short, lean back, relax, and drive. And give it 30 years.
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