Classic Cars investment could be better than gold
The Knysna Motor Show sponsored by Sanlam Private Wealth took place on Sunday the 30th April 2017 and once again shined the spotlight on the growing number of investments in classic cars.
The Knysna Motor Show was held on the Knysna High School sports fields and was organised by the Garden Route Motor Club, featuring some of the most rare and distinctive classic cars and motorcycles from around South Africa.
More and more avid classic cars connoisseurs are seeing the value in this ‘passion hobby’ and yielding the returns of their investments.
ShowMe had the pleasure of interviewing Sanlam Private Wealth Portfolio Manager at the Knysna branch, Leon Strümpher. He explained that over the past two decades the classic cars market has experienced a consistent rise in value. Just in the UK alone the value of the classic car market is said to be about £5.5 billion.
‘According to the Knight Frank Luxury Investment Index the value of the international classic car market has appreciated more than that of wine, watches, jewellery, art and stamps over the past 10 years,’ says Strümpher.
He points out that when it comes to investing in Classic cars, not all cars are equal and some may not be a good investment. ‘It takes a really deep knowledge of this industry and a lot of homework to know which ones will appreciate in value. Investment cars vary dramatically in price tag and returns, depending on their rarity and condition, and the size of the buyer’s pocket.’
According to Strümpher the younger classics: 1970s, 1980s and early 1990s models, V8 and preferably manual transmission are better investments. The Mercedes models from the 1970s are becoming sought after, with prices rising steadily. ‘The key is to get a vehicle from a good marque, such as the German, British and some American brands, before there’s great demand for that model.’
As many classic cars leave our shores for Europe or the US they are becoming scarcer every year. For foreign investors, South African vehicles are well priced, even when transport costs and taxes are taken into account and this drives the price.
‘Even though investing in a classic car can be an exciting and extremely rewarding venture, it’s not for the faint-hearted,’ Strümpher says. ‘It requires attention and time as well as resources – such as real estate to house your vehicles, so it’s best to do your homework. To avoid future pitfalls you should do regular maintenance, try to acquire a car with low mileage, look for rust and replace perished parts with original parts.’
With this all achieved it’s likely your classic car investment will be better than gold.
For more information on Classic Car investments or email Leon Strümpher