As classic cars keep growing in popularity both for investment as well as a pastime - with rising values to match- getting-in on this trend sounds like a straight forward proposition. According to Christian Arm, one of the founding partners of Etzel Classic Car AG, investing in classic cars however can have its pitfalls. "Selecting vehicles purely from the perspective of where one can expect maximum value cannot be done without extensive market and technical knowledge" says Mr Arm. "Aside from getting it right with the acquisition cost, professional classic car investing requires correct storage, maintenance and also restoration."
Many classic car purchases - notably those private acquisitions that blur emotional and financial aspects - may for these reasons not hold up to the promise of a financial return. However, a balanced portfolio of, well-selected vehicles from the 1950s through to the 70s along with pre-war models and "modern classics" comes with plenty of promise: the German Classic Car Index DOX continues to outperform the mainstream DAX and a whole host of other asset classes. Real assets remain generally popular with investors, and with classic cars in particular there is the undeniable fact that supply is very limited.
"Investors looking at the classic car market from a return perspective need a highly focussed approach and extensive expertise if they aim at keeping up with or beating the DOX" agrees Ralf Hohwieler, Etzel Classic Car AG's fund expert.
Fund operations offering classic car investments can be an alternative for accessing this market while rising demand is making outright vehicle purchases more challenging. However, these offerings aren't always comparable: "Some funds invest in other asset classes such as art and collectibles or public stock along with classic cars" explains Mr Hohwieler. "Investors should ascertain they are investing in a dedicated classic car fund - if that is what they want. They should also ensure that the set-up, transparency and disclosure on offer meets with their expectations".
Both Arm and Hohwieler however agree that for most the investment and the emotional side come hand in hand. "There is no sign that demand for classic cars is coming to an end anytime soon", adds Mr Arm. "We generally find investors will want to benefit from the increase in classic car prices, yet at the same time have physical use of the vehicles. This truly makes investment in classic cars so special, combining passion and returns."
The Etzel Classic Car AG has various business activities in the field of classic automobiles, including an investment fund. info@etzel-classic.ch
Many classic car purchases - notably those private acquisitions that blur emotional and financial aspects - may for these reasons not hold up to the promise of a financial return. However, a balanced portfolio of, well-selected vehicles from the 1950s through to the 70s along with pre-war models and "modern classics" comes with plenty of promise: the German Classic Car Index DOX continues to outperform the mainstream DAX and a whole host of other asset classes. Real assets remain generally popular with investors, and with classic cars in particular there is the undeniable fact that supply is very limited.
"Investors looking at the classic car market from a return perspective need a highly focussed approach and extensive expertise if they aim at keeping up with or beating the DOX" agrees Ralf Hohwieler, Etzel Classic Car AG's fund expert.
Fund operations offering classic car investments can be an alternative for accessing this market while rising demand is making outright vehicle purchases more challenging. However, these offerings aren't always comparable: "Some funds invest in other asset classes such as art and collectibles or public stock along with classic cars" explains Mr Hohwieler. "Investors should ascertain they are investing in a dedicated classic car fund - if that is what they want. They should also ensure that the set-up, transparency and disclosure on offer meets with their expectations".
Both Arm and Hohwieler however agree that for most the investment and the emotional side come hand in hand. "There is no sign that demand for classic cars is coming to an end anytime soon", adds Mr Arm. "We generally find investors will want to benefit from the increase in classic car prices, yet at the same time have physical use of the vehicles. This truly makes investment in classic cars so special, combining passion and returns."
The Etzel Classic Car AG has various business activities in the field of classic automobiles, including an investment fund. info@etzel-classic.ch
