1932 Bugatti Type 55 Super Sport Roadster.

Luxury Cars With a Profit Potential

Cars are a rather unique investment; each one has its own history and lineage of owners, with scarcity, aesthetic appeal and interesting technological improvements all playing a part in whether you will get a return on investment.

When looking for profits in the luxury car market, it goes without saying, a beat-up car with plenty of mileage on the dash isn’t going to fetch you a pretty penny.

The best investment cars that collectors are looking for are ‘barn finds’, cars that have been put in the shed out back and forgotten about, a window into another time.

Now-a-days, if collectors want to get a return on their investments, you won’t see them out on the street enjoying their toy, the car will be locked up, out of harm’s way, at most taken out once or twice a year.

Money is floating around in the luxury car market, with Indian market research company Mordor Intelligence estimating the value to be around US$410 billion (A$535 billion) in 2020.

Like most luxury markets, investors are trying to play the supply and demand game, ergo, scarcity equals profitability.

Classic cars tend to be the go-to for car investors, but a few younger models have seen a quick return on investment.

However, it has proven difficult to predict what cars will see their values rise as taste changes from generation to generation and as they say, lose half their value when it is driven out of the dealership.

Despite growth in the luxury car market over the last few years, investors and collectors found 2020 to be a bit of a dud year, with the market going quiet during COVID-19 induced lockdowns with auctions postponed or moved online.

Values are expected to recover in 2021 and volume set to normalise as the COVID-19 pandemic comes increasingly under control as live auctions start to take place again.

2014 Lamborghini Veneno Roadster

In 2019 this 2014 Lamborghini Veneno Roadster was offered at auction by Bonhams in Geneva.

2014 Lamborghini Veneno Roadster. Image: Bonhams

It was a find that investors love, it has just over 200 miles on the odometer the car had barely been driven out of the dealership to a garage.

It was also exceedingly unique, being ‘number 7’ of only nine made.

It ended up going for an eye-watering US$8.337 million (A$10.8 million) at auction, at that time the most-expensive Lamborghini ever sold at public auction.

With a retail price of US$4 million (A$5.2 million), the owner doubled his money in just five years.

The car is also unique in the fact that there is no roof, just a roll over bar, and is powered by a 6.5-liter V12 engine that produces 750 horsepower, just like the hardtop version, with the roadster version enjoying a top speed of 221 mph.

2012 Lexus LFA

An exotic, two-place, front-engine, rear-drive coupe, with technology and performance well above its original asking price, it might surprise you that Lexus lost money on everyone it sold.

2021 Lexus LFA. Image: Tim Andrew.

Hagerty, the United States-based car insurance company releases an annual Bull Market List, a collection of cars they believe are poised for growth in the year ahead, and for 2021, a good bet might be the 2012 Lexus LFA.

Buying one of these brand-new would set you back just US$350,000 (A$456,978), now Hagerty expects a value for a car in excellent condition to between US$558,000 to US$582,000 (A$728,193 – A$759,513).

The car has been compared to the US$650,000 (A$828,253) Ferrari Enzo, with the Lexus enjoying a 4.8 litre V-10 engine under the hood, co-developed with Yamaha.

The small unit generates 553 horsepower at 8700 rpm and revs to an exciting 9000 rpm.

Only 500 were made, and interest is well spread across age demographics, with Hagerty noting interest and quotes rising.

They are also appearing for auction more frequently, with 2019 seeing more auctions for this vehicle than all previous years combined.

2005–06 Ford GT

Hindsight is the curse for all investors, and plenty would have been kicking themselves that they didn’t pick up this bargain at US$150,000 (A$195,750) brand new, considering a 2006 Ford GT is now estimated to be worth US$337,000–$395,000 (A$439,787 – A$515,477), according to Hagerty.

Ford GT. Image: RM Sotheby’s

Interest in this car remains high amongst the boomer generation, with the arrival of the more expensive 2017 GT (average resale price of US$580,000, approximately A$756,903) helping to push interest in this model up.

The 2006 model was made in homage to the Ford GT4 supercar and has all the nostalgic feels and power to match the well-loved model, remaining effortlessly cool through the ages.

With 550 horsepower from a supercharged V-8 engine, it hits 60 mph in 3.3 seconds and a top speed of 205 mph.

Classic Car Market

Most money tends to be made on the historical cars; the ones were only a small handful have survived until this day.

Looking at the Historic Automobile Group International (HAGI) index illuminates an interesting trend in luxury investments.

The HAGI index functions similarly to the ASX 200 or S&P 500, it gives an in-depth look of the classic-car marketplace, measuring performance of exceptional historical automobiles.

According to Credit Suisse, the index offered annualised returns of 12 per cent between 2010 and 2020.

The COVID-19 pandemic has changed the way the car buying scene operates, with in person viewings out of the picture as a result of travel restrictions, collectors were buying cars with millions of dollars, all with a mouse click.

According to luxury auctioneers and valuers Bonhams, the most expensive car they auctioned in 2020 was a 1932 Bugatti Type 55 Super Sport in Amelia Island, off the coast of Florida for US$7.1 million (A$9.3 million), not far behind was a slightly older model, a 1931 Bugatti Type 55 with Figoni coachwork which was auction in Paris to the tune of €4.6 million (A$7.1 million).

The classic car market has been a on a gentle decline according to the HAGI index however, peaking in September 2018 with a sluggish 2019 seeing prices fall 7 per cent.

However, the market is still strong, just four per cent off the peak following some impressive sales in 2020 with classic cars racing back with a six per cent growth, despite a dearth of events and in-person auctions.

The February 2021 index shows that the historic care prices have taken a hit over the pandemic, with the overall market falling 2.4 per cent for the year to date, with Porsche (-2.11), Mercedes (-5.19) and Lamborghinis (-3.59) feeling the pinch, only Ferrari have come out unscathed, with a small 0.03 per cent rise.

If you take out Porsche and Ferrari cars from the HAGI Top Index, the drop is more pronounced at 4.61 per cent.

1932 Bugatti Type 55 Super Sport

The aforementioned Bugatti was owned by the late Dean S. Edmonds Jr., a Boston University professor who had has the car in his stable since 1985.

Commissioned by Nathaniel Mayer Victor Rothschild, the car is now an exceedingly rare automobile.

1932 Bugatti Type 55 Super Sport. Image: Bonhams

After a few years the young Rothschild would pass on ownership where it would go through a few hands before ending up with the family of H.B. Murphie who would later auction the car at the Honourable Artillery Company in London.

The pre-auction estimates in 1985 was £100,000. Mr Edmonds ended up with a winning bid of £440,000, about £1.1 million (A$2.1 million) when adjusted for inflation.

So, when the Edmonds estate sold the Bugatti in 2020 for US$7.1 million (A$9.3 million), the car had increased value by roughly A$7.2 million.

1978 Ford Falcon Cobra XC

Interest in these classic cars is picking up, with Australian auction marketplace Grays reporting a big increase on classic Australian cars, specially of the Ford variety.

1978 Ford XC Falcon Cobra 4.9 : Ford
1978 Ford Falcon Cobra XC. Image: WhichCar

“We are used to seeing strong demand for classic Australian cars, but we’ve never seen anything like this. Clearance rates have never been higher, and we don’t foresee demand or prices falling in the near future” Grays CEO Chris Corbin said.

The recent Classic Car Auction conducted by Grays marketplace in February drove record numbers. Grays saw over 1.3 million total page views and nearly 200,000 unique visitors over the course of the auction that featured a range of classic Fords and Holdens.

The classic Australian car went under the hammer for $194,000 at the Grays marketplace, if you had bought the car brand new in 1978, it would have been just over $49,000 adjusting for inflation.

1966 Honda S600

Despite primarily being a motorcycle maker, the 1966 Honda S600 would have cost you about US$13,119 (A$17,132) when bought brand new in 1966, now a model in excellent condition is worth anywhere from US$29,500 to $38,500 (A$38,523 to A$50,274), according to the Hagerty 2021 Bull Market.

1966 Honda S600. Image: Silodrome

The car has a petit charm about it,The cute looking automobile was never imported to the US.

With the 1966 version of the model adding a hardtop coupe and beefing up the engine to a 606 cc, the S600 is a left-hand drive with 57 horsepower and four-speed manual transmission.

The car is rare even as the number changing hands increases, with a value change from 2019-20 of 17.9 per cent.]

1969 Honda CB750

A market dominated by boomers, according to Hagerty, the CB750 is becoming a popular must have amongst car collectors, with an apparent interest from Millennials helping potential return on investments into the future.

1969 Honda CB750. Image: Mecum.

Stock in the Honda CB750 has been increasing, with an 11.6 per cent increase in value between 2019-20, as the dependable, button-start motorcycle broke into the 60’s market dominated by European builds.

The bike is a style icon, and while a bit weighty by todays standard, it has stood the test of time and is enjoying interest from an increase of interest from car collectors.

According to Hagerty, the number of bikes in collections of five or more is growing by 13 per cent in the past year, boding good news for motorcycle investors.

If you had bought this bike brand-new in 1969, it would have set you back just US$10,981 (A$14,376), with current estimates of up to US$37,500 (A$49,094) if you sold now, according to Hagerty.

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