Park this in your vault: Classic car returns outpaced gold

Market Watch: Park this in your vault: Classic car returns outpaced gold Classic cars showed an impressive performance in 2011 — one that outpaced gold, according to the Historic Automobile Group International (HAGI), an independent research house and think tank specializing in the rare classic motorcar sector. Gold futures saw a return of around 10% in 2011. By contrast, the HAGI Top Index, which measures the performance of 50 key collectible classic cars, advanced by 13.89% last year. The return of the Top Index, excluding Ferrari and Porsche, achieved 21.65% growth that year. “We’ve discovered that classic cars move independently of any other investment area, and that’s a very attractive attribute for collectors and investors alike in this day and age,” said Dietrich Hatlapa, founder of London-based HAGI. “The figures demonstrate very clearly that this is not a uniform market; performance varies from marque to marque and from model to model,” he said. “Choice and timing are key, and that’s what makes it so fascinating, applying a judgement call on a model or marque you consider is due for rotation.” Hatlapa pointed out that the classic car sector “has many attractions in this day and age,” with supply broadly finite. “They’re not making Bugatti Type 57SC Atalantes anymore; the market is global; the asset class is uncorrelated with other investment classes,” he said. “Historic cars are a tangible asset with real asset characteristics, a highly sought-after feature since the financial crisis of 2007-2009 [and] once a model has become collectible, it’s never become uncollectible.” Of course, you’d have to be able to afford one of these rare autos, plus store and insure it. A 1939 Mercedes-Benz 540Z Cabriolet-A purchased in October 2007 for £660,000 ( $788,295) sold for £848,500 in December 2011 – for a return of 28%, according to Dave Selby, a senior analyst at HAGI. Gold investments, in contrast, don’t require such thick wallets — for less than $200, you can buy a share of the SPDR Gold Trust, an exchange-traded fund backed by gold. But it’s arguably a lot less fun to look at.