Under the hood of the classic car industry

Like fine wine these engineering marvels seem to get better, and more expensive with time. Pythia Barretto examines the global fascination with classic cars.

Collection of Classic Cars

In 1886, Karl Benz put in an application to patent his ‘vehicle powered by a gas engine’. And the world was never the same!

Although people did travel before the invention of the car, it was never too far from where they lived. It certainly wasn’t with ease, or with speed. The invention of the car changed all that – slowly, but surely, encouraging and enabling more autonomy and freedom of movement.

With almost 1.5 billion cars on our roads today, it’s easy to see that the car has moved in status from being an item of luxury to one of necessity. Interestingly, most of these cars are in Asia, then in Europe, followed by North America. The ability for mass production, for the cars to reach the ‘common man’ was established by Henry Ford when he introduced the moving assembly line. Henry Ford who famously offered the masses the choice of hue in his mass-produced vehicles saying, “Any colour you like as long as long as it’s black.”

From 1886 to 2022 the car has undergone several iterations. But strangely, despite the newer, better and more luxurious cars available today, there is a great desire (almost bordering on a craze) for ‘classic’ cars.

Old? Vintage? Antique?

While all old cars are not necessarily classic, the term ‘classic’ encompasses all vintage, antique and collector models. It could include cars as recent as 10 years old, moving up to over 50 years. The points of reference to define ‘classic’ are also many.

In this article, we’re essentially talking about ‘desirable’ classic cars. The ones that people are actively looking to own and to consequently be the subject of envy. The ones that people are willing to open their wallets for.  And open them wide.

But why?

Again… buying classic cars stems from different motivations ranging from a deep love of cars to making a shrewd and sound investment. Yes! People truly do strange things for love! And some classic cars can actually provide better long-term returns than real-estate or art!

Caring for and maintaining, sometimes even restoring these beautifully designed and produced vehicles can cost a pretty penny. But it’s obviously not off-putting to those buying these cars off the market.

If you’re curious about how much a classic car would actually cost, a classic 1965 Mustang would set you back about USD 20,000. There are quite a few other cars that would be considered ‘collector cars’ in the USD 20,000 to 30,000 price range. Not bad you think? Well, you’re going to want to hold your breath for this one!

Ferrari 250 GTO is by far the most expensive classic car to be sold. At a whopping GBP 52 million!!! (approximately USD 60 million! at today’s conversion rate).

To buy or not to buy?

If you’re a car aficionado and all this car-talk has got your blood racing, here are a few things to consider if you want to make an investment.

Like every investment market, the car market is constantly shape-shifting. But currently, the appreciation of older cars is at a healthy high and values are strong.

If all you’re looking for is a to buy a classic, sit on it for a couple of years, and then sell it at a profit, you might want to re-think that idea! While you may be better off enjoying its beauty and performance, it’s going to need time, care and investment even if all you want to do is store it.

Like all other vehicles, classics work better when they are driven – carefully, of course! But if you’re going to store it, make sure you have expert advice on how to do it and what happens when you do decide to sell.

While there is plenty of advice available right from publications to clubs , the pricing of classic cars still follows the supply-demand principle of the market! The desirability of a car often drives how much a vendor can charge for it. Make sure you do your research before you write that cheque!

A good resource for keeping up with the classic cars market is the K500 Index. It is a wealth of information on classic cars, and has been compiled through verifiable and quantified auction sale results.

Did you know

  • In 1495, Leonardo da Vinci designed the first self-propelled vehicle, one that could be used without horses. It had a highly complex spring-winding mechanism, but was feasible!
  • The 1886 three-wheeled Benz Patent Motor Car, model no. 1, is regarded as the first automobile. Its patent no. 37435 is considered the birth certificate of the automobile.
  • The 1901 Curved Dash Oldsmobile, built in Detroit by Ransome Eli Olds was the first mass produced car, in the modern sense.
  • In 1903, Mary Anderson received a patent for the first windshield wiper but was ignored by the automobile industry.
  • Henry Ford is generally credited for the first assembly line production of cars. He used this in 1908 for his famous Model T. By 1917, 15 million Model Ts were on the market!

What’s the fuss about?

A few years ago, a classic car collector was envisioned as an older, wealthier person, looking to build his personal collection of cars. But the last few years, there has seen a change in demographics of car enthusiasts. The average age is considerably lower, with a younger crowd now wanting to invest in classic cars.

The Covid-19 pandemic is thought to have also impacted the classic car market. It brought with it a microchip shortage worldwide, which pushed up the demand for older cars. The popularity of online auctions of classic cars is another reason they can be bought more easily. An increase in disposable incomes following the Covid-19 restrictions and worldwide lockdowns is also helping boost sales of these classic beauties.

As with most else, the availability of classic cars is growing in the digital space. A few reliable and well used auction sites for classic cars are:

While these sites may be US-based, they have connections with auction networks around the world.

If you’re a self-confessed petrol head and would rather go old-school to be surrounded by the sounds of revving engines and the smells of leather and engine oil, these car shows may be more appealing.

  • Amelia Island Concours d’Elegance, Jacksonville, Florida, USA
  • Bonneville Speed Week, Bonneville Salt Flats, Utah, USA
  • Chantilly Arts et Élégance Richard Mille, Oise, France
  • Goodwood Festival of Speed, Chichester, Sussex, UK
  • RM Sotheby’s London, Battersea Park, London, UK

With the world continuing to open up for travel, you can now plan to attend these events. We’re confident that feasting your eyes on these truly remarkable automobiles will get your heart racing. Plus, if you’re considering an investment or an indulgence on a classic car, you will be able to see what it looks and feels like first-hand!

What the future holds!

As the world changes and governments and change-makers become more environmentally and climate conscious, there will definitely be changes to automotive regulations. While it is unlikely that classic cars will be outlawed or become obsolete, it will definitely encourage classic car owners to become more creative and adaptable with restoring, fuelling and maintaining their cars.

A big part of the allure of classic cars is the fewer numbers of them available or the performance standards to which they have been built. With these parameters not set to change, the craze for classic cars, especially those that offer a sound investment opportunity, will not change anytime soon!

A list of the Top 5 Classic Cars for Investment in 2022

Mercedes Benz 230SL

A two-seater sports car, popular for its driving comfort, four-speed manual transmission, 14” steel wheels and hardtop.

 

1966 Alfa Romeo Spider

Made popular in the 1967 film, The Graduate, this beauty is famed for its curvy edges and driving reliability.

 

Mazda MX-5 / Miata

This best-selling two seater convertible is a classic collectible and has excellent safety features.

 

Suzuki Samurai 1985

This efficient, off-road vehicle is desired for its 4-wheel drive system and lightness coupled with the power and stability it offers.

 

Chevrolet Corvette C4

This classic beauty handles excellently, has a high-performance engine and is extremely attractive to look at!

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