This is why collector cars are better than hedge funds image

If you noticed, there’s an interesting trend today – almost every limited series by an exotic automaker – Lambo, Ferrari, McLaren – gets effectively sold out months ahead of the official presentation.

This is not something that happens on a whim – since the value of the higher-end classic cars has jumped no less than 500 percent during the past decade alone, thus outperforming hedge funds with triple digit profit figures. You might ask what’s the connection between collectible classics and collectible moderns? Well, the thing is that making it extremely hard to find will make sure that for years its value will not go down. This has been done for years, and this is what helps the explosion of the prices for collector cars. It’s incredible still – models that were worth at the low end of a six figure can now be sold for a million or more. The inflation has reach even the lowest levels – cars that were worth pennies decades ago are worth much more today.

According to the Frank Knight Luxury Investment Index, the figures are telling the truth. Up until March 2016 during a half decade period, the luxury and classic cars value has jumped 161 percent. During the ten year period, the values were even more astonishing – up 467 percent. Meanwhile, hedge funds had a profit of 4.75 percent in five years, and just 7.83 percent over a decade. Classic even outperform other alternatives – wines, coins, and even art. There are exceptions though – a 1957 Ferrari 335 Sport sold in February for upwards of €32 million, a record for the currency, but a 1968 Ferrari 275 GTS/4 NART Spider failed to snatch its high bid of €17 million.