10 July 2015

Graph of the Week: The Average Classic is Not an Investment

Last week’s graph examined the value of the Hagerty Hundred Index (average condition #2 value of Hagerty’s 100 most popular insured vehicles by year, make and model) since 2007 and showed that the average classic hasn’t appreciated noticeably at all, and certainly hasn’t made big returns for its owner when it has come time to sell. This graph drives that point home by showing the Hagerty Hundred against five other financial instruments, including “Blue Chip” collector cars, which we define as the 25 most desirable postwar classics and are both rare and towards the very highest end of the price spectrum.

The Hagerty Hundred has seen the least amount of change among these other indices. Perhaps most glaringly, it hasn’t even kept up with inflation. People have of course sold a car for significantly more than they paid for it over the last few years, so it is possible to make money on one, but these people have typically operated at a much higher price point and in a smaller pool of rarer cars. The average classic car owner is still in it for passion and the enjoyment of tinkering and driving rather than any financial gain, while the “investment” and “speculation” in buying and selling classics have usually taken place with more expensive low-volume models. Cars are best left for fun. Investing is best left in the stock market.

19 Reader Comments

  • 1
    Craig Battuello Napa Valley,St. Helena,Ca. July 22, 2015 at 15:02
    Recent customer, A week ago.. I bought my 1959 356 A 1600 Super Porsche Coupe in 1967. I bought it because I like the lines of the body style, the 31 miles to the gallon and it was easy and fun driving. I paid $1850 for it, that was $600 more than a used 1959 VW, in 1967. I had no idea, nor did I buy as to be a collector car at that time. This is the only car I held on to. My other cars I had were a 1940 Candy apple red Ford 2 door coupe, a 1941 Plymouth coupe, a 1955 Chevy, a 2 door Hardtop, a 1973 Toronado, and a 1971 Camero. They were all just daily driving cars. I traded in the 55 Chevy I bought used for $525 from a car lot, the going price, traded for a 1964 VW Bug. The salesman said he really didn't want the car, gave me $25 for it. The other cars were given away to friends and replaced by other cars. A 1971 Monte Carlo, a 1978 Monte Carlo, most of these cars turned out to be wanted by collectors, and I have seen more than $10,000 for some of them. Glad my Porsche was my favorite. This was also true for my brother-in-law. He had the typical hot rods, belonged to the local hot rod club called the Oposers, in Sacramento, Ca. He went through that phase, then had a slow down, his next car was a Model A coupe , with a rumble seat. His next one was a 50's Hardtop Porsche convertible, then a P1800 Volvo, as his family grew, he sold them all. I rode in his El Dorado, and liked the comfort and ride, shortly afterwards, I bought my 73 Toronado, both cars had 455 V-8's, got 17 miles to the gallon, gas was 35-40 cent a gallon. When I bought it my friends said why are you buying that car?, gas is going to be 50 cents a gallon in five years! I am sure there are many more stories out there the same as mine.
  • 2
    chris Wilmington NC July 22, 2015 at 17:22
    Well this graph would seem to fly in the face of any of us that own and have watched the prices of cars like ANY aircooled Porsche 911, 356, even 914 soar. What about E30 BMW M3's, Mercedes...... the list goes on. Can you tell us what these figures were derived from (car values on the graph). I understand the blue chip cars always being high flyers, but I find it hard to believe the afore mentioned haven't kept up with or exceeded inflation at least, as meager as it's been (inflation).
  • 3
    patman Muskegon, MI July 22, 2015 at 19:47
    I would like to know the "real" difference between a "classic" and a "vintage" car. I am pretty sure I know the difference but then this is hearsay around here. Also, if you keep a classic car in pristine condition does it make a difference as far as the value of the car?
  • 4
    William Butterman modesto california July 22, 2015 at 21:12
    this is really just a reflection of the larger reality that all the financial gains of the past 5 years have gone to the top 1% of our society and the middle-class has lost ground therefore limiting their ability to pay for cars that are not museum pieces. No surprise here. In the future if the middle-class gains a larger share of the income increase and the upper crusts share levels off prices will readjust and classic cars in general will see large scale increases in price. Demand remains but cash is in short supply
  • 5
    Dennis Scottsdale, AZ July 22, 2015 at 10:42
    Where's the list?
  • 6
    Greg D SFO July 22, 2015 at 10:57
    Kinda funny that your average is flat. Every car that I like has tripled in the same time frame....
  • 7
    Gary Platz Colonial Heights,Va. July 22, 2015 at 11:57
    We own several Mopars and enjoy showing, driving and cleaning them.We're not concerned about flipping them for we have owned one almost 44 years , another for 30 years and a late model for 17 years.The most recently acquired one has been owned for over five years.Three out of the four have appreciated in value but, not to the point where we can sell them and then buy an island.We enjoy the camaraderie of other Mopar owners and their appreciation of everything Mopar. Thanks, Gary Platz
  • 8
    Mike Marsh Brandon, MS July 22, 2015 at 12:11
    Where does one find a list of your top 25 "Blue Chip" and The Hagerty 100? Thanks
  • 9
    Thom Steele Somewhere, TX July 22, 2015 at 12:45
    Thanks for the summary. Please don't tell my wife.
  • 10
    driver seattle July 23, 2015 at 01:35
    Hmmmm. Depends on WHAT you bought in 2007. Short wheel base Porsche 911, E30 M3 BMW's, M1, ans CSL's and other "affordable" classics have appreciated in some cases along with stocks and other investments. "Blue Chip" cars just like blue chip stocks have appreciated exponentially! Cars like the mid 60's Ferrari v12's, (nevermind the GTO), Gullwing Mercedes, Lamborghini Countach, Even newer stuff like the Porsche 959, Carrera GT, and the Ford GT are going into orbit. I guess Hagerty is trying to make all of us "Small Fish" feel better?????
  • 11
    Dan McKeen Vermont July 23, 2015 at 07:09
    Dang, I keep telling my wife it is an investment........... We have a 1961 TR3, 75K miles, class 2, daily driver. paid 11K 13 years ago. Hagerty says insure for 25K. How about feedback from other TR owners? Dan
  • 12
    Chris Michigan July 23, 2015 at 11:49
    I have a 1973 Buick Riviera. I have spent a lot of money on this classic to the awe of many people. I know what it cost to refurbish these vehicles and the love and detail behind them. The vehicles they sell at auction are steals for unless you know the cost no one makes any money. This is a losing venture but a love of the past and a hobby of passion.
  • 13
    Eric LaCruze Jensen Beach, FL July 24, 2015 at 15:40
    Let's restructure that chart above with a Gold baseline and see how we do.
  • 14
    wayne sharaf watkins glen ny July 28, 2015 at 13:11
    how bout a link to what you consider blue chip cars.
  • 15
    SPORTWAGON400 alberta Canada December 14, 2016 at 17:51
    its true that most classic cars will never be an investment to make money. except in the case of many high end imports and super rare original cars. the entire point of this hobby is to preserve and enjoy the cars of the past that bring back such excellent memories. That in its self you can not put a price on I currently own 7 collector cars, mostly 60's GM A body cars and the joy I get from working on them and driving them is well worth the small amount I pay to own them. I currently work for an AUDI dealer and the $$ they waist on new cars is outrageous I spend a fraction and I get more smiles per mile then they ever will and if I decide to sell one or two of my collection I have not lost any money If I break even to me its a win win after all you can not drive anything for free In my opinion if your trying to make money in the collector car field your going to lose the biggest problem today are these ridiculous shows on TV where these morons fake the cars they buy and its not real the amount they claim to spend on these cars it has in fact hurt the car collector hobby almost as much as the circus called Barrett Jackson another farce where the owner can buy his car back if it does not bring the $$ he wants for it no matter what the hammer price is another game played
  • 16
    Jerry Drayton Decatur, Georgia December 14, 2016 at 18:30
    Your graph proves the truth of the adage: If you buy for love not money, you can't go wrong.
  • 17
    Dave A. Arizona December 17, 2016 at 10:37
    A lot depends on what sort of make or model of car you are talking about. For example, I bought my 1966 Corvette convertible 8 years ago for $42,500. It was in good condition but needed some mechanical and interior upgrades. Now you can't even find decent driver C2 Corvettes for much under $50K.
  • 18
    Ron NorCal December 18, 2016 at 16:14
    Tr3 Feedback- I have a '59 that my father gave me being an basically all orig. I believe to be a #2 I believe it's realistic value at about $15k no matter what others may think, and insure it at that. TR's don't bring the money like Healey's and even some MG's. Too bad because for what they are I Love it!
  • 19
    Jeff SE PA December 27, 2016 at 16:27
    Don't forget...I believe that this is all before factoring in the costs of ownership and holding costs of owning an old car (garaging, insuring, maintaining, etc.). Don't get me wrong I LOVE CLASSIC CARS, but as my dad always told me, "Very few people make money on cars."

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