Classic cars prove a much better investment than hedge funds

Figures released by an investment firm show that over the past 10 years, classic car values have soared by 467 per cent, compared with just 7.83 per cent for hedge funds over the same period.

The Frank Knight Luxury Investment Index found the classic car market has been in an exceptional growth period over the past decade. Vehicles are regularly being sold for astronomical figures as investors attempt to cash in on the rising values.
One of the driving factors of the boom was the financial crisis that struck in 2008. Many wealthy people took their money out of banks and invested in property such as cars and homes, and with the sudden excess of demand, prices soared.

With the worldwide economy gaining stability, the massive growth appears to be slowing. Despite the incredibly high growth over the previous decade, the past five years only saw growth of 161 per cent.

Dietrich Hatlapa, founder of the Historic Automobile Group International, told the Financial Times that supply was catching up with demand. "The number of cars that are being offered has risen significantly. We have more auction houses and more auctions. One-day auctions are now over two days, and the number of dealers has more than doubled over the past five years," he said.

Hatlapa also revealed that as demand increased, the market shifted its preference towards cars with provenance. He said that now was not the best time to buy as an investor, but for collectors it's exciting as more interesting cars are hitting auctions.
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