Why do some cars rise in value when all others fall ?

We are often asked what are the determining factors that make one Investment Vehicle rise while all others fall around them. To answer the question in part, we can turn to the Property Market, which comprises of properties in great areas, mid range properties in reasonable areas, and lower quality properties in outlying areas with little or no growth. 

The property in the most desired area, such as absolute waterfront or close to an attractive area of a major City will always grow the most, whilst a property miles from the nearest schools, shopping centres and other facilities will realise little or no growth, although could well be a good Rental Return  consideration. Cars do share part of their valuation with property, inasmuch as the most desirable ones with the most desirable styling of which there are not so many left, attract the highest yields. Cars that were produced in massive numbers and are fairly featureless and bland, will always drop in value for almost their entire lifespan. This will be true of many of the current mainstream cars that are on our roads today, primarily because of their similarity.

A 1990's 2 Door

Just as an older property will firstly reach a point where it is worth more when flattened and re-developed, many of todays cars will be scrapped. That said though, a small number of older properties survive, and just become old, and as such become somewhat attractive due to their " Oldy Worldy " look. They may of course also be in an amazing location, although that is another subject. They may also go on to become " Heritage Listed " which cements their part in our history. Where the similarity lies is in the fact that when some cars become older, and are no longer seen every day, their inherent value begins to rise as more people begin to want something that is unique and stylish. If these cars then become even more rare, and if they were a good and reliable car when they were on the road every day, up goes their value again. If they were also a car with very High Performance or other distinguishing features, up goes the value again. If we are talking Race or Rally Cars with special history, up they go once more. The rarer the model, the higher the price will go, which is similar to both Property and Art.

Of course the trick is knowing what car will reach " Classic Status " and when, and this is a real art that takes many years to learn and appreciate. Fortunately for us, we have jointly been across many era's of cars, and have bought, sold, built and rebuilt all of the cars that are now considered Classics at one time or another, and so have seen these cars firstly drop in value,  then plateau for many years, and then finally rise significantly. Just as with property, there is a pattern to Classic Car Investing, although the returns are far, far greater than in the property sector.