Classic car prices have dropped for a second year in a row – seeing a decrease of 10.4% during 2016 – according to the Coutts’ Passion Index.
Interest rates have continued to drop during the last five years, which has meant classic cars seemingly taking up the title of a ‘safe-haven for investment,’ but this drop could indicate that classic cars are no longer as ‘safe’ as once thought.
Coutts recorded a 10.4% drop in classic car values – a further drop on that seen in 2015. The strong inflation has drawn on investors as well as the underlined customer- base of enthusiasts. It remains to be seen whether the large financial returns once guaranteed are a thing of the past, but if they are it could open the market up to the true car collectors.
Spokesperson for Dietrich Hatlapa of Historic Automobile Group International commented: “Those who were in it just for the money have moved on. The market is now more in the hands of the collectors and specialists, which I think is good news for the real enthusiast.”
The Coutts’ Passion Index monitors any changes in the values of collectibles, not just classic cars. The index puts the fall down to a drop in average prices in the $500,000-plus market that it reviews. It is currently unknown exactly what has caused the market to dip.
According to the report, classic car values saw an increase of 399% between 2005 and 2014, with 2013 and 2014 seeing the largest increases – 27.4% and 40% respectively. With a 1962 Ferrari 250 GTO going under the hammer for $38million at the 2014 Monterey Car Week contributing to said figures.
This overall increase across the last decade shows classic car values are still very strong and look to continue to be a sound investment.
When looking at the classic car market as a whole for 2016, Knight Frank’s Wealth Report shows an overall growth of 9%, further cementing the classic car market’s future.