When a 1962 Ferrari 250 GTO sold at auction for over £22 million in the summer of 2014, the story made global headlines. Those in the know, however, were not surprised. Once reserved for the uber rich, car collecting has gained traction with the masses in recent years. In particular, the enormous baby boomer generation has entered the classic-car market tout suite. Whether for nostalgic or investment reasons (or both), these new buyers have sent valuations skyward. But are they making the right bet?
Just like any other collectible, from art to comic books to sports memorabilia, vintage cars are extremely sensitive to economic conditions. When the economy is healthy, there are typically more buyers and more demand, which often results in rising prices. It is therefore important to note that the value of vintage cars actually increased by 21 percent during the global recession, according to the Historic Automobile Group International (HAGI). While that fact alone does not guarantee that every buyer will make money, it is a fairly good indication that the market is for classic cars is on the upswing. Read the rest of this entry »