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Risk and return of classic car market prices: passion or financial investment?

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Abstract

This paper examines the risk and returns of classic car price indices over the 1994–2021 period. We calculate the central tendency, dispersion, shape of risk and returns, the unit root tests, and correlations. The results indicate a moderated volatility, a low range of returns, and a weak expectation of financial gain given the ancillary costs related to the auction, transport, insurance, guarding, maintenance, and restoration. There are low correlations among the classic car markets. These results provide a better understanding of the risk and returns of the classic car market for many actors such as individual and professional investors, collectors, and wealth managers. Investing in a classic car is more of a passion and emotional investment than a simple desire for financial gain.

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Data availability

The data that support the findings of this study are available from the corresponding author, upon reasonable request.

Notes

  1. See Le Fur (2021b) for a review.

  2. e.g., Goetzmann (1993), Pesando (1993), Mei and Moses (2002), Pesando and Shum (2008), Goetzmann et al. (2011), Renneboog and Spaenjers (2013, 2015), Dimson and Spaenjers (2014), Le Fur (2020).

  3. Krasker (1979), Jaeger (1981), Fogarty (2006, 2010), Sanning et al. (2008), Masset and Henderson (2010), Kourtis et al. (2012), Bouri (2014), Dimson et al. (2015), Faye et al. (2015), Lucey and Devine (2015). Masset and Weisskopf (2015, 2018), Aytaç and Mandou (2016), Bouri and Roubaud (2016), Le Fur et al. (2016a, b), Masset et al. (2016), Ben Ameur and Le Fur (2020). See Le Fur and Outreville (2019) for a review of the fine wine returns.

  4. https://500.com.

  5. 166 MM; 340 America; 250 MM; 375 MM; 250 Europa; 500 Mondial; 750 Monza; 500 TRC; 250 GT Tour de France; 410 Superamerica; 250 GT Pininfarina Cabriolet; 250 Testa Rossa.

  6. 250 GT Tour de France; 410 Superamerica; 250 GT Pininfarina Cabriolet; 250 Testa Rossa; 250 GT California Spider SWB; 250 GT SWB; 250 GT SWB Competizione; 250 GTE; 250 GT Lusso; 250 GTO; 250 LM; 330 GT 2+2; 275 GTB/2; 275 GTS; 500 Superfast; 275 GTB/C Series 1; 275 GTB/C Series 2; 365 California; 275 GTB/4; 330 GTC; 330 GTS; 275 GTB/4 NART Spyder; Dino 206 GT; 365 GTC; 365 GTB/4 Daytona; 365 GTS; 365 GTS/4 Daytona Spider; Dino 246 GT; 365 GTC/4; Dino 246 GT; 365 GTC/4; Dino 246 GTS.

  7. Dino 206 GT; Dino 246 GTS; 365 GT4 BB; 308 GT4; 308 GTB/S; 512 BB; 288 GTO; Testarossa; 328 GTB/S; 400/412; F40; F50; 550 Maranello; Enzo; 599 GTO; LaFerrari.

  8. 356 Pre-A; 356 Pre-A Convertible; 550 Spyder; 356 Speedster; 356 A-C Convertible; 356 A-C Coupé; 356 Carrera; 904; 911 2.0; 912; 906; 910; 907; 908; 911 2.2; 917 K; 914/6; 911 2.4; 911 Carrera RS 2.7; 911 Carrera RSR 2.8; 911 Carrera RS 3.0; 911 Turbo 3.0; 924 Carrera GT; 959; 911 Speedster; 911 (964); 911 (964) Carrera RS; 911 (993); 911 (993) Carrera RS; 911 (993) Turbo; GT2; GT1 Carrera GT ; 918 Spyder.

  9. Shapiro-Wilk, Anderson-Darling, and Lilliefors tests confirm these results.

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    Eric Le Fur

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Le Fur, E. Risk and return of classic car market prices: passion or financial investment?. J Asset Manag 24, 59–68 (2023). https://doi.org/10.1057/s41260-022-00288-8

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