Beyond the Road: Luxury Cars as an Investment
Just as certain works of art appreciate in value over time, so too can select luxury cars. While not every vehicle will become a collector's item, those produced by renowned brands and with unique features or historical significance often hold their value or even increase it. This article explores the world of luxury car investments, with a particular focus on Porsche as a prime example.
Why Luxury Cars? The Allure of Engineering Excellence
Brands like Porsche have a legendary status in the car world, blending innovation with timeless design. Unlike regular cars that depreciate the moment they leave the dealership, certain luxury cars have a strong potential to appreciate over time, making them a lucrative and prestigious investment.
According to the Knight Frank Index classic cars have appreciated 185% in the last decade, making it one of the best performing asset classes.
The classic car market is forecasted to achieve a CAGR of 6.7% from 2022 to 2031 according to growthmarketreports.com.
Investment Profile: Luxury Cars
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Risk: Moderate - high
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Expected Return: 15%
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Investment Horizon: 2–11 years
What Makes a Luxury Car a Sound Investment?
Several factors contribute to a luxury car's investment potential:
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Brand Reputation: Established brands like Porsche, Ferrari, and Aston Martin have a long history of producing desirable vehicles.
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Rarity and Limited Production: Cars with low production numbers or special editions tend to be more valuable.
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Historical Significance: Vehicles involved in significant events or owned by famous individuals can command premium prices.
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Condition and Provenance: A car's condition and its ownership history are crucial factors in determining its value.
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Mileage: Low mileage generally increases a car's desirability and value.
Porsche: A Case Study
When it comes to luxury car investments, Porsche is one of the standout brands that consistently attracts high returns. With a long history of producing iconic models, Porsche has mastered the blend of performance, design, and exclusivity.
Porsche's production strategy, which limits the number of special editions and rare models, creates scarcity that drives up value over time. The Porsche 918 Spyder, for instance, was produced in only 918 units and has already become a prized collector's item, often selling well above its original retail price.
The Porsche 911 series is iconic and has maintained its desirability over the decades. For example, the 1974 Porsche 911 Carrera RSR Turbo 2.14 fetching $3,245,000, a world auction record for a Porsche 911. Porsche’s reputation for performance on both road and track ensures that its cars remain sought after by collectors and enthusiasts alike.
Luckily, there is a desirable 911 model available on our app right now. It is a real collector’s gem, cherished for its classic design, low mileage, and air-cooled engine. Due to its rarity and heritage, it has a stable and growing demand, which reinforces the low risk rating of this asset.
1988 Porsche 911 (930) 3.2 SC Targa in Guards Red - available on Splint Invest right now!
Story Time: The Porsche Auction Block
The 1970 Porsche 917K—a racing legend in its own right—is being sold for a staggering $16-$18.5 million at RM Sotheby’s. This incredible appreciation in value showcases the potential for luxury cars, particularly classic and race models, to deliver outstanding returns for their owners. This racing car was driven by David Hobbs and Mike Hailwood in the 1970 Le Mans 24 Hours. In 1971, it was Immortalised as the winning car in Steve McQueen’s Solar Productions film “Le Mans”. These are only a few of many reasons for this car to be a motorsport icon and investable asset.
Investing in Luxury Cars: Considerations
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Storage: Proper storage, including protection from the elements and potential damage, is essential for preserving a luxury car's value.
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Maintenance: Regular maintenance and servicing help to maintain a car's condition and can contribute to its long-term value.
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Insurance: Adequate insurance coverage is crucial to protect your investment.
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Market Research: Stay informed about market trends and the specific value of the model you're considering.
This seems like a daunting task to deal with all these problems by yourself. That is why Splint Invest and our expert partner The CarCrowd take care of everything on this list.
The Final Lap: Owning a Piece of Automotive History
Luxury cars are not just machines; they are pieces of automotive history and engineering excellence. While investing in luxury cars can be rewarding, it's important to approach it with careful consideration. By focusing on established brands, rare models, and proper maintenance, you can increase your chances of acquiring a valuable asset. Porsche, with its rich history and iconic vehicles, offers a strong foundation for those seeking to invest in luxury cars, but also Ferrari, Lamborghini, Mercedes, Audi, and others produce collectable cars.
Want to invest in a classic car but don’t know which one to get? Here’s a list of the top 10 investment cars you can buy today!
This blog is the second part of the series based on our recent Collectibles Report 2023/2024. In this blog we deep dive into two major categories of art and cars, providing market performance and insight from our expert partners.