Values of top-end classics have increased nearly 500 percent in the last decade

You’ve probably noticed that the prices being asked for collector cars have exploded over the last decade or so. Cars that were worth low six-figure sums at the start of the 21st Century now go for millions. And cars that were worth millions now go for tens of millions. The inflation at the top of the market has had a knock-on effect lower down, too, and even classics that were once worth only a couple of grand are starting to reach unattainable values.

Figures released by the Frank Knight Luxury Investment Index bear that out. In the five years to March 31, 2016, values of luxury and classic cars increased by 161 percent. Over ten years to the same date, values went up an astonishing 467 percent.

By comparison, according to data from Prequin, hedge funds returned 4.75 percent over the same five-year period, and 7.83 percent over the same ten-year period. Classics have also outperformed other ‘alternative’ investments such as wine, coins and art.

There are, however, indications the market may be slowing, supply catching up to demand as owners look to cash-in. Dietrich Hatlapa, of Historic Automobile Group International, said: “The number of cars being offered has risen significantly. We have more auction houses and more auctions. One-day auctions are now over two days, and the number of dealers has more than doubled in the last five years.”

The market is starting to value originality more than Pebble Beach trophy-worthy condition, but equally appears to be getting more fickle. A very rare 1957 Ferrari 335 Sport race car sold for more than €32 million ($35 million) in February this year at RM Sotheby’s Paris sale, a record for the currency. And yet an equally rare 1968 Ferrari 275 GTS/4 NART Spider failed to sell at RM’s Monaco sale in May at a high bid of €17 million ($18 million).