Last Updated: 2025-04-09
Author: Daniel Fehn
For many enthusiasts, classic cars evoke nostalgia and the thrill of owning a piece of automotive history. But beyond the passion, can they also be solid investments?
The Barrett-Jackson Mini-Index
Back in 2008, the auction giant Barrett-Jackson promoted their "Barrett-Jackson Mini-Index," showing that a select group of collector cars had outperformed major investment benchmarks over the previous five years. According to their data at the time, collector cars returned a 16.4% gain, compared to:
- 4.0% for the S&P 500
- 5.1% for the Dow Jones
- 11.2% for gold
The seven models used in their index were:
- 1957 Ford Thunderbird
- 1967 Jaguar XKE
- 1967 Ford Mustang Shelby GT500
- 1970 Chevrolet Camaro Z/28
- 1970 Plymouth AAR ‘Cuda
- 1965 Austin-Healey Mk III
- 1967 Chevrolet Corvette 427/435
While this mini-index looked promising, a few important realities should be kept in mind:
- High-End Bias
Most of these cars are rare, high-end collectibles with premium price tags. It’s unclear whether these models were carefully chosen years before the index was published or simply “cherry-picked” based on known performance after the fact. - Additional Ownership Costs
Unlike traditional investments (stocks, bonds, gold), owning a classic car can involve substantial ongoing expenses:- Interest (if financed)
- Maintenance and repairs
- Storage fees
- Insurance
- Restoration costs (if applicable)
- Selling commissions and taxes
These costs can significantly impact your overall return.
Hagerty’s “Blue Chip” Index
Hagerty, a well-known name in collector car insurance and valuation, created its “Cars That Matter Blue Chip” Index to track 25 popular models. Between mid-2006 and mid-2010—when the broader economy was struggling—the index showed a 61% increase. This dramatic growth may have been partly driven by investors looking for tangible assets when the stock market was especially volatile.
Volatility in the Collector Car Market
Like the stock market, collector car values can swing wildly based on trends and economic conditions. A classic example is the early 1960s Ferrari 250 GTE four-seater:
- In 1987, you could find one for $30,000–$40,000.
- By 1990, prices soared to around $250,000.
- Shortly afterward, they plunged to about $50,000.
- Only in more recent years have they rebounded to around $100,000.
This rollercoaster pattern illustrates how timing matters enormously. To profit, you would need to sell during a peak—often easier said than done.
The Emotional Factor: “Buy What You Love”
Many high-end collectors, like Jay Leno, openly state they purchase cars because they enjoy them, not because they expect to sell at a profit someday. If someone is willing to pay any price just to own a specific vehicle, that sale might not reflect the “true” market value. Luxury and passion play big roles in the collector car world, which can blur the line between investment and hobby.
Considering the Average Car Collector
Enthusiasts with more modest budgets usually don’t buy the rare six-figure and seven-figure classics. In fact, many buyers talk themselves into believing their middle-tier classic car is an “investment,” when in reality any profit may barely beat (or fail to beat) inflation once expenses are factored in.
- Restoration can add value, but it also involves substantial time and money.
- Picking the Right Car is as tough as picking the right stock. You have to choose a model with potential, buy it at a fair price, invest in improvements (if needed), and hope the market values those upgrades when you sell.
New “Collector” Cars and Limited Editions
Modern cars marketed as “instant collectibles” (like a brand-new Ford Mustang Shelby GT500) tend to depreciate just like any other new vehicle. Values often hit bottom 15–20 years later. While certain low-production or anniversary editions may hold their value somewhat better, there’s no guarantee they’ll climb above their original purchase price within a reasonable timeframe—especially after the costs of maintenance and storage.
However, you could look at vehicles from the late 1990s or early 2000s that are now at or near the bottom of their depreciation curve. They might one day appreciate—though, again, there’s no guarantee.
Custom Cars and Hot Rods
In recent years, the market for custom and restomod vehicles has grown significantly. Popular TV shows and builders (like Chip Foose) have spotlighted unique creations that blend classic aesthetics with modern tech. If someone takes a less-desirable model and transforms it into a showstopper (with modern engines, updated interiors, and other comforts), that vehicle can draw a premium at auction.
Why Custom Cars Might Appreciate
- Individuality: A one-of-a-kind custom ride stands out.
- Modern Drivability: Suspension, brakes, and interior comforts can be upgraded, making it more appealing to a broader audience.
- Pop Culture Influence: Television, online platforms, and social media can drive demand for trendsetting builders and unique designs.
Conclusion
If you’re thinking of buying a classic or collector car purely for investment, proceed carefully. While certain high-end and historically significant models can (and do) rise significantly in value, it’s difficult to time the market. Just like with stocks or real estate, you’d need to buy low and sell high.
Bottom Line:
- Buy a collector car because you love it, not solely because you expect to profit.
- Recognize that volatile market conditions and hidden ownership costs can eat into returns.
- If you do see appreciation, consider it a pleasant bonus rather than a guaranteed outcome.
Ultimately, the real “profit” for many enthusiasts is the joy of driving a piece of automotive history, showing it off at events, and sharing that passion with others. If one day you can sell it without taking a big financial hit or even turn a profit, then you've come out ahead by enjoying your toy over the years and making money off of it