Classic car investors are enduring a tough start to 2018, according to the Historic Auto Group’s (HAGI) classic car indices.
The HAGI Top index, which tracks the value of “exceptional historic automobiles”, was down 4.7% in value in February, and has dropped 6% since the start of the year.
A dramatic decline in values for classic Porsches is partly responsible. Prices for vintage models of the German marque have fallen by 8.2% in the first two months of 2018, almost double the losses accrued by Ferrari (down 4.9%) and Mercedes-Benz (down 4.8%) over the same period.
It is the first negative start to a year for the HAGI Top since 2010, and is a far cry from the bullish days of 2014 and 2015, which posted 12 month returns of 25.1% and 17.6%, respectively.
Why are prices dropping? The sector has recently seen a large amount of investment money head elsewhere.
Bodie Hage, founder of Netherlands-based classic car dealer Real Art on Wheels, told the New York Times that 2015 “was a boom. Everyone was afraid of missing a car.
“There were a lot of opportunists around, and because of that a lot of collectors started selling.”
But now, it seems, the hobbyists are finding the sector to themselves again, and prices are declining.
HAGI also suggests the decline is due to changing buyer preferences. “Younger models in very good condition continue to outperform in this market,” HAGI asserts – the inference being that values are dropping for the classics of the 50s and 60s, which have historically achieved far greater sums than their younger cousins.
Despite the general downturn, HAGI does continue to strike an optimistic note. “The four original HAGI indices are worth well over three times their end of 2008 valuation while the MBCI (classic Mercedes-Benz) has nearly doubled since the end of 2011,” it says.
