The Rise of the Classic Car as an Investment

*This is a collaborative post about the rise of the classic car as an investment 

A 1962 Ferrari 250 GTO sold for £38 million at auction in 2023. That’s an extreme example, but it reflects a broader trend that’s been building for years. Classic cars have quietly become one of the more talked-about alternative investments, attracting buyers who want something tangible, something they can actually enjoy, instead of watching numbers tick up on a screen.

But buying a classic car with investment in mind isn’t the same as picking up a weekend toy. There are real costs, real risks and a few hard lessons that catch people out. Let’s take a closer look at how classic car investment works and what you’ll need to think about before putting your money into one.

Why classic cars have caught investors’ attention

Over the past decade, certain classic cars have outperformed more traditional assets like stocks, bonds and even property. The Knight Frank Luxury Investment Index has tracked classic cars as one of the stronger-performing collectible categories over the past decade, though returns have been uneven, with cars outperforming in some periods and trailing behind categories like wine and handbags in others.

Part of the appeal is scarcity. Manufacturers aren’t making more 1960s Porsche 911s or E-Type Jaguars. Supply is fixed, and as cars get scrapped, crashed or left to rot, the number of good examples shrinks every year.

There’s also the emotional side. Unlike a share certificate or a bar of gold, you can drive a classic car, display it at shows or simply sit in your garage admiring it. That dual purpose, enjoyment and potential financial return, makes them attractive to people who’d never normally consider themselves investors.

What actually drives a classic car’s value

Provenance

Not every old car is worth investing in. The ones that appreciate tend to share a few traits. Provenance matters hugely. A documented history, original parts and low mileage will push a car’s price up significantly. A 1973 Porsche 911 Carrera RS with a full service history and matching numbers will fetch multiples of one that’s been bodged together from spare parts.

Rarity

Rarity plays a big role too. Limited production runs, special editions and cars with a motorsport pedigree tend to hold or gain value better than mass-produced models. Cultural significance helps as well. Cars that featured in films, were owned by someone notable or represent a turning point in automotive design often carry a premium.

Condition

Condition is the other major factor. A car that’s been properly stored and maintained will always be worth more than one that’s spent years parked outside or crammed into a damp shed. This is where many owners slip up.

Professional car storage

If you’re serious about protecting your investment, proper storage is essential. Counties like Essex and Surrey have seen a growing number of classic car owners turn to professional facilities for exactly this reason. Dedicated Essex car storage facilities, for example, often offer climate-controlled environments that prevent the rust, damp and deterioration that can quietly destroy a car’s value over time.

The costs most buyers forget about

It’s easy to get excited about potential returns and overlook the running costs. Classic cars aren’t like shares that sit in an account for free. You’ll need to budget for:

• Insurance (which can be steep for high-value vehicles).
• Road tax.
• MOT testing (vehicles over 40 years old are exempt on a rolling basis, though owners can still choose to have one done).
• Ongoing maintenance.

Parts for older cars can also be expensive and hard to source. A replacement gearbox for a classic Aston Martin isn’t something you’ll find on a shelf at Halfords. Specialist mechanics charge accordingly, and even routine servicing costs more than it would for a modern car. Then there’s storage, which is a recurring cost you can’t afford to skip if you want the car to hold its value.

Which cars are worth a closer look right now

The blue-chip classics, Ferraris, Aston Martins, rare Porsches, have already seen massive price increases and entry costs are high. For buyers with smaller budgets, the more interesting opportunities tend to sit in what collectors call the “modern classic” category. Think cars from the 1980s and 1990s that are now old enough to be collectible but were produced in enough numbers that you can still find good examples.

The South East, and Essex in particular, has a thriving classic car community with regular meets, auctions and specialist dealers. That makes it a good area to start looking if you’re after a modern classic in decent condition.

Models worth watching include:

• The BMW E30 M3, which has already climbed steeply but still has room to grow for pristine examples.
• The Mk1 Mazda MX-5, one of the best-selling sports cars ever made, with early models now rising in value.
• The Peugeot 205 GTI, particularly the 1.9-litre version, which has seen strong appreciation in recent years.
• The Mercedes W124 E-Class, built to a standard that modern cars rarely match, and increasingly sought after.

It’s worth noting that trends shift. What’s hot today might plateau tomorrow. Buying something you genuinely like is a sensible hedge, because even if the value doesn’t climb as expected, you’ll still own a car you enjoy.

Risks you should be honest about

Classic cars are illiquid. You can’t sell one at the click of a button like you would a stock. Finding the right buyer at the right price can take weeks or months. The market is also cyclical, and values can dip during economic downturns when discretionary spending drops.

Fraud is another concern. The classic car world has its share of clocked mileages, dodgy restorations and misrepresented histories. Always get an independent inspection before buying, and check the car’s history through the DVLA’s vehicle enquiry service.

An HPI check will flag outstanding finance, write-offs and stolen markers, while marque-specific registers and owners’ clubs can help verify provenance for particular models..

There’s also no guaranteed return. Some cars that everyone expected to appreciate have flatlined or even dropped. The classic car market rewards knowledge and patience, not speculation.

The bottom line

Classic cars can be a rewarding investment, both financially and personally. But they demand more attention than most alternative assets. You’ll need to do your homework, buy carefully, maintain the car properly and store it in the right conditions. Get those things right, and you could end up with an asset that grows in value while giving you genuine pleasure every time you turn the key.

If you’re thinking about entering the market, start by learning as much as you can about the specific model you’re interested in. Join owners’ clubs, attend auctions, talk to specialists. The more you know, the better your chances of making a smart purchase instead of an expensive mistake.