We have always known that Porsches are super to drive, now according to Germany’s Suedwestbank vintage car index, certain 30+ year-old classic 911 Porsches are also an outstanding investment, having experienced a 683 per cent increase in value over the past 13 years.
In a recent interview with Bloomberg, Jens Berner, vintage car expert at Suedwestbank AG’s asset management unit, said, “For customers with more than 1 million euros in liquid assets, a classic car can be an attractive addition to their portfolio in terms of yield and value stability.
“After the financial crisis, requests for alternative investments such as art, wine or classic cars had risen sharply.”
To accurately analyse classic cars against other asset categories Suedwestbank created the OTX Classic Car Index, comprising vehicles at least 30 years old from Audi, BMW, Daimler and Porsche that are all based in Suedwestbank’s southern German heartland.
From 2005 to 2018, the OTX quadrupled, easily beating the 204 per cent gain for Germany’s main stock index DAX, with air-cooled 911 Porsches being the standout.
Suedwestbank, a division of the Austrian Bawag Group annually calculates the index – made up of the 20 cars with the highest values – by multiplying model prices from specialist magazine Motor Klassik with registration numbers from the Federal Motor Transport Authority. However it is not always plain sailing: “Caution should always be exercised with classic car investments, said Berner, “especially now with prices being rather high.” He advises that investors always consult an expert.
“Counterfeits are a big issue, for example when a vintage car is first disassembled into individual parts and then re-assembled into two cars by mixing it with some new parts,” he said. “If there are suddenly 300 cars on the market of a series of which only 200 were originally built, then something is wrong.” He added.
Liquidity, too, can be a problem, depending on the model.
“For some vehicles, there are only a few potential buyers, but for others, such as the Porsche 911, the market is relatively large,” he said. Berner advises customers invest only in vintage or classic cars with a minimum value of 100,000 euros. At lower prices, the cost for expert reports, taxes, insurance, storage and maintenance are proportionally bigger drags on the return and a classic car should make up 10 per cent to 15 per cent of a portfolio at most.