Investment Potential of Hyper-Luxury Cars
by William Szokol
The super luxury car market has seen astounding growth over the past six years due to an expanding market of young tech entrepreneurs. The app and tech booms have created a large number of multi millionaires in their 20s. These individuals have ample money and are looking to enjoy the luxuries of life, including exotic cars. This has allowed for companies such as Bentley and Rolls Royce to expand their production and greatly increase revenue. Rolls Royce, for example, introduced the Wraith, their first two-door model. They did so to cater to the new younger market, which in contrast to the typical Rolls Royce buyer, does not want to be chauffeured around, but would rather prefer to drive themselves. This expansion has allowed for Rolls Royce to increase registrations five-folds since 2009.
Just as exotic car companies have seen such great expansion in the recent years, antique super cars have seen steady appreciation over the past seven years. From 2008–2013 the HAGI index (Historic Automobile Group Index) has outperformed not only the MSCI World index, but also gold, fine wine, bonds and fine art. Antique Ferraris in particular have outperformed the Blue Chip Index and have been the best performing antique exotic supercar brand.
So the question then becomes, how would one acquire such an exotic supercar? The most obvious answer would be through auction. Purchasing through auction guarantees that the buyer pays a fair market price due to the competitive bidding nature of auctions. In addition, there is a condensed negotiation period and a guaranteed sale. However, there are some negatives to auctions such as the buyer’s premium that must be paid. So you might ask, how else could one purchase such a car? Another option is through Ebay Motors or luxury car dealerships. If you check your bank account and come to the realization that you are slightly short of being able to buy an antique super car, there still remains an option for you… Stocks such as Ferrari’s RACE, Fiat Chrysler’s FCAU or Ford’s F can be purchased enabling you to partake in the benefits of investing in hyper-luxury cars.
