Hagerty.com

The market for Pre-war Greats


#1

Cars from the 1980s and later have become one of the hottest segments in the market for the better part of two years. The market for cars made before World War II, however, is only a little ways behind.


This is a companion discussion topic for the original entry at https://www.hagerty.com/articles-videos/articles/2017/10/20/pre-war-market-greats

#2

Interesting deep dive into this segment of the market. Long term ownership generally brings more value out of sale at auction but I think the percentages are skewed due to inflation. I’d like to see the percentages accounting for inflation.

For example, the Bugatti Type 57S Cabriolet by Vanvooren s/n 57513, first sold at auction in June 1991 for $1,398,715 and then sold at auction in March 2017 for $7,700,000 would indicate a 550% ROI, but accounting for inflation, the real ROI is 303% as $1,398,715 would be roughly $2,534,724 in 2017 dollars which is a 81.2% cumulative rate of inflation.

Still a remarkable ROI, but in terms of dollars, that’s a $1,136,009 reduction in actualized return… not a small sum.

My point is, empirical evidence suggests your pre-war greats index shows an increase of 103% over the past 5 years and a 216% over the past 10 years, retrospectively accounting for inflation it’s not this paramount. Unless the index does account for inflation but that is not specified in your article.

A lot of buyers make their buying decisions utilizing a number of mechanisms and tools to justify pricing and one of those tools I’m sure is utilized is the pricing guide and information Hagerty publishes and I’m just advocating that the right economics are applied so as to not give a false sense of financial latitude when one really takes into consideration long term ownership when comparing one investment vehicle (a pre-war classic) to another investment vehicle (a stock/fund).

Still they historically have been a hell of an investment and I’m really appeased that pre war cars still command this type of activity and appreciation in the market place seeing as the current trend is 80s/90s exotics, modern Japanese classics, vintage trucks and SUV’s, and still to an extent air cooled Porsches.


#3

You are correct in that the returns do not account for inflation. The article is intended to highlight that the market for Pre-war Greats (from Europe) is still very much alive and that some cars in that segment have seen excellent (nominal) returns over time. Coincidentally, those returns appear to improve the longer the interval between a car’s appearance at auction. Returns aside, one takeaway is that while a Type 57 Bugatti that hasn’t been to an auction in decades might go for big money, a pre-war Alfa, Mercedes, or Rolls that has sold more recently might be a great deal.