Guest post: Speedbox – Cars as an investment
Are cars a good investment? Some definitely are with recent news of a McLaren F1 supercar from the early 1990s selling for a whopping $35m recently. Not a bad return for a vehicle that cost about $1m when new. The McLaren’s price was relatively cheap when compared to an ultra-rare Ferrari 250 GTO from the early 1960s that sold for $66m back in 2018.
Even Australian cars are getting in on the action with a 1971 Ford Falcon GTHO Phase III selling for $1.15m in February this year surpassing the $1.05m paid for another GTHO Phase III in June 2020 that had been owned by Australian fast bowler Jeff Thomson. Both cars had an original retail dealer price around $5000. For those who don’t have a lazy million to spare, a Torana GTR XU-1 was recently sold for $210,500.
If you want something a bit newer, other examples include a 2017 HSV GTSR W1 sedan that fetched $365,000 – almost $200,000 more than its new price whilst a Holden GTSR Maloo, with the interior still wrapped in delivery plastic, sold for $230,500 being more than double its new price.
Those are all road registerable cars – race cars can reach even greater prices such as the $2.1m paid for the Holden Commodore race car used by Peter Brock to win Bathurst in 1982 and 1983. Yet it is not just those cars we readily identify with that reach significant prices. A 2001 Honda Integra Type R recently sold for $148,500 being more than double its retail price when new.
It does raise an interesting question as to whether a canny buyer can secure a windfall by purchasing and holding a specific car. It is very unlikely that a Mazda CX-5, Hyundai Elantra or similar vehicle will ever increase in value over the years to warrant the holding cost. But there are a host of other cars that could be worthwhile investments even for those who don’t want to mortgage their house. The Renault Megane RS Trophy or the Volkswagen Scirocco R could be viable opportunities or the early Toyota Celica GT4 Group A or Mitsubishi Evolution X would also be likely contenders.
My interest in the investment potential is also tweaked by the onset of electric cars in the future. I have already posted on that subject but the intersection between new electric vehicles and older ICE sports cars is intriguing. Will sports ICE vehicles increase in value especially among those who yearn for the sound of the exhaust and challenge of changing gears? In any event, I decided to test the theory and purchased a rare(ish) Toyota 86 TRD edition a couple of years ago. Time will tell whether it will be a profitable decision.
Of course it doesn’t have to be a sports car. Have you looked at the price of older VW Kombi vans lately? Virtually anything pre 1970 starts at $80,000 with some being double that amount.
Many years ago, I owned this car – a 1974 Holden Torana L34. I kept it in immaculate condition and it was factory original. It even had the high output ‘track pack’ which was extremely rare for road registered vehicles (the track pack was an option sold by GMH supposedly for race cars only). In March 2021, an L34 was passed in at auction for $360,000 which was not surprising given others had sold for in excess of $500,000 previously.
I sold mine for $16,000 in the mid 1980s. Aaarrrrggggghhhhhh.
I turned down a Dino Ferrari for about $40,000 in the 80’s…..however the upkeep and need NOT to use it would have made owning it impractical.
Demographics play a big part in value. People who aspired to a GTHO when they were young and poor can now afford one will bid up prices.
The next generation will want something from their youth, so the GTHO and Torana will be worth less than a 90’s icon.
I buy LP’s. Early AC/DC are wildly popular but no one wants anything much pre Beatles (some exceptions). In 10 years time the AC/DC fans will be gone or going. Time to sell now??
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Turnip says:
August 20, 2021 at 9:34 am
Demographics play a big part in value. People who aspired to a GTHO when they were young and poor can now afford one will bid up prices. The next generation will want something from their youth, so the GTHO and Torana will be worth less than a 90’s icon.
Yes, that’s interesting and I’ve been wondering the same thing. By the 2040’s – 2050’s, a GTHO will still be a very interesting car but the Boomer generation will be very elderly, or even dead. Will their children want to splash $1m+ on a car from the era? Some will of course, but I think you’re correct that most will look to something more recent such as the 1990’s – 2000’s.
There are many ‘interesting’ cars from the time (and later) that won’t break the bank today. It remains to be seen whether they will be a good investment.
So little time, so many cars. (sigh)
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I bought a 1969 Fiat 124 AC coupe from a mate in my car club for $3000 in early 2018. Laid up cover with Shannon’s is $12,000 (as in off the road, not running). It’s complete, virtually no rust, very low mileage (55,000 miles, confirmed when I realised the original ball joints are still riveted into it as Turin used to do). Currently being overhauled and made nice for Club Rego. Best estimate is it’s been off the road for 15 years. Value? Probably around $15,000. ACs in vgc are fetching around $25k-$30k, which does not represent value to me, but it is what it is. They’re fun cars to drive, and I love the social aspect of my club.
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As for the crowd of political/bureaucratic/activist lunatics on the horizon about to start ramping up rules and legislation around electric vehicles….and what this implies for the rest of us. I have begun raising the expression, ‘dirty renewables’ with all and sundry. Particularly APS snowflake work colleagues who’ve never thought through their pixie dust accounting methods. Petrol cars have on balance over the life of a car less ‘impact’ on the environment. The energy/material/emissions input into manufacturing electric cars, and then sustaining them; is greater than that for petrol cars. Even hybrids have a greater impact. And electric vehicles are woefully inefficient as well in the range stakes.
In general power generation terms for comparison; a modern, low emission coal-fired power plant is cleaner over its life than the wind/solar equivalent, with the added benefit of being able to meet its key mission: reliable baseload. Wind/solar cannot even do that, and the energy/material/emission input to build the equivalent wind/solar energy generation capacity is obscene. To use the language of the loonies.
(Adam – there may be an op-ed in this and I have flagged with Rafe.)
Petrol engines could however, do with a bit of technological development on the fuel efficiency front.
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My first car was a Cortina GT manual that had beautiful dark red leather bucket seats racing gear and fitted twin exhausts. It was such a lovely little thing but came to grief when a guy in a stolen van with heavy equipment missed a corner and hit my baby mid ships where it was parallel parked. I often look for one like it but can only find later models. The closest I have found is listed at $120,000.
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I think I’m still in the bad books for selling our 2nd car for 2 large. 2004 Toyota camry 80k on the clock. I avoid mentioning this when in ear shot of the missus
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… sold last year to a middle eastern chap via gumtree.
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mem, my first car was an olive green, ’66 Cortina. It wasn’t a GT. It was a manual and it was a great, reliable little car for a first time driver. For a four cylinder car, it was quite large. Used to load it up with niece and nephew and a couple of their mates, plus two dogs. Plenty of room room for all. Didn’t have a heater to start with, when my friends and I would go partying or clubbing, I always made sure I had lots of blankets.
Not great up hill though.
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Have you looked at the price of older VW Kombi vans lately?
The mate of a mate is a retired Kombi mechanic of many years experience.
He has about 6 Kombi shells in his yard. They are his retirement finances – does up one a year in his idle time and sells it for about $140,000.
PS – great news today from grandson doing HSC this year. He just picked up a vehicle mechanic apprenticeship starting in November. A bright ray of sunshine in a Gladys-induced gloom.
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Similar thing is happening with new and used (certain) Rolex watches. Generalised asset inflation I suspect. Keep the stocks of tinned food and loo paper up.
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Good to see Turnip back.
The prices on XE ESP Falcons & VK Group A Blue Meanies recently are mind boggling.
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Any view on Miatas with a non-OEM knob? Asking for a friend.
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The numbers are not the whole picture.
Given the de facto MMT policies operating at the moment, how does a million dollars in today’s Monopoly money compare to that $5000 original price for the Phase III?
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Sunbeam Alpine II in the shed awaiting restoration, red, rusted out left rear inner guard and some rust in the sill.
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<blockquote>Generalised asset inflation I suspect.</blockquote>
Bingo.
Check up almost any collectible for confirmation.
Some of the prices paid in recent times for ‘art’ pieces in London, for example, are truly eye-watering.
Not included in the “CPI” index, of course. Because that would spoil the ‘low inflation’ narrative of the central planners.
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I have noted the dramatic decrease in Holden or Ford utes getting around on our roads. Yes you will still see them, but the are rapidly diminishing. If you have the cash and the space would be worth putting one away.
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I wonder how much my beautiful Aqua green blue GTS HZ Sandman panel van with 12 slotters and twin system V8 four speed (and not forgetting the clarion tape deck…stereo mind you) absolutely immaculate condition……I wonder how much that would be worth these days?!
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For run of the mill models I suspect the best that can be hoped for is slightly slower price depreciation, even with the elites forcing <strike>over-priced golf carts</strike> EV on us. But this is in the UK news today:
Used car prices soar to record levels due to ‘supply constraints’ on new vehicles (20 Aug)
USED CAR prices have soared to record levels due to “supply constraints” in the new car market, according to AutoTrader.
<blockquote><em>New data from the car retailer has revealed average used car prices have increased by a massive 15.2 percent year on year with some vehicles up by more than 50 percent. The increase also marks 66 weeks of consecutive price growth among second-hand vehicles.
Richard Walker, AutoTrader’s Data and Insights Director has blamed delays with new car production on why demand has surged.
Semiconductor shortages have pushed back delivery times with road users not prepared to wait.</em></blockquote>
It’ll be interesting to see whether China starts throwing their weight around, since so much semiconductor capacity is in close proximity to their sphere of interest. Maybe cars should go back to the old style – engines and wheels and no silly screens.
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Heaps Struth, absolutely heaps. Sandman’s are very rare and desirable today as a collector’s car.
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Bear is that the one with the knob driving it?
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Pogria says:
August 20, 2021 at 3:40 pm
mem, my first car was an olive green, ’66 Cortina. It wasn’t a GT. It was a manual and it was a great, reliable little car for a first time driver. For a four cylinder car, it was quite large. Used to load it up with niece and nephew and a couple of their mates, plus two dogs. Plenty of room room for all. Didn’t have a heater to start with, when my friends and I would go partying or clubbing, I always made sure I had lots of blankets.
Not great up hill though.
I came from flat country up on the Murray. When first drove to Melbourne had to drive up Punt Road hill but had never to that stage tested the handbrake. Got caught halfway up behind van and started slipping backwards and, being new to hills, didn’t have a clue what do. Panicked and stalled but at least kept foot on break until gallant young man came to rescue. (We met a week later for coffee and he ended up marrying my best friend who I took along for company. We are mates still, so happy ending story.)
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Are cars good investments, well for the Falcon GT that was my first car i’ve been offered 15 times what i paid , after over 25 years of hard use and nothing but normal maintenance, so it seems they can be investments. I have other Aussie classics too, a decade of using my Sandman as a daily driver back in the day i’d get a nice return. But its not about the money and those who tell me they wish they’d kept theirs for no reason than the financial return they could have got miss the point. For me they aren’t investments they are cars and i use them for what was intended (hint: my user name) but they are my cars and no amount of money being offered will get them from me.
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I’m pissed now. Had a E48 Charger years ago. I’ll be in my room crying. Didn’t have space for all of them. Had 6 different valiants at the same time. Best one was VG hardtop 440 5 speed.
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As the major car manufacturers are now putting all their product development into electric cars and none into ICE, I’m betting that current high performance ICE cars will be the ones to collect. Add to that the novelty value of Australian manufactured cars, and I have put away a Ford Falcon with the supercharged 5.0 V8.
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HK 327 GTS … traded in for $1900 — on a Mazda R100
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Sorry, $1200, not $1900
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Still got my stock VE SS with less than 100,000 km.
At least doubled in value, and low km isn’t necessarily less than 100,000 km when it comes to value, prolly cos it’s an NA V8.
American Learns about the Aussie Holden HSV Maloo Ute
$1 Million
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I don’t think I6’s command anywhere near the value of V8’s,all for a piddling 10% saving in fuel economy on the highway.
The VE was designed off the BMW M5, i.e. designed for the V8.
Other versions are just a downgrade.
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Brockie’s Bathurst winning A9X Torana beaten around Bathurst by a stock VY SS Commodore.
VE/VF on the newer chassis and Gen IV V8 engine should trounce the Gen III LS1 VY.
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That’s a beauty of a car
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