Driven by rarity and future value, as well as emotion, nostalgia and fancy, South African investors are seeing iconic automobiles as lucrative investment opportunities.

In the past, classic cars were mostly the playthings of millionaires, but these days a classic car can sell at an auction for as much as $30 million – and it’s a trend that has been rising in the past two decades.

But within those two decades, it’s the last 10 years that classic cars have made their stance, “appreciating more than that of watches, wine, jewellery, stamps and art” .

From BusinessTech, here are some numbers:

Among the most popular classic car brands, the latest price index compiled by the Historic Automobile Group International shows that Mercedes-Benz has been the best performing marque, increasing in value by just over 85% over the past three years.

Ferrari also did well, posting an increase of 65% and sending Porsche into third place with a rise of almost 60%.

A 1960s Ferrari Dino that might have sold for R25,000 in the 1980s, may sell for as much as R6 million today – while an E-type Jaguar worth R50,000 in the early 1990s might fetch upwards of R2 million in 2017.

The best-performing classic cars in terms of return on investment have been the Ferraris from the 1950s and ‘60s, Sanlam noted, with the highest price paid for a Ferrari believed to be more than $50 million for a 1960’s Ferrari 250 GTO.

However, here’s the bad-ish news: not all classic cars are a sound investment.

Like everything, homework is imperative to know which vehicles will appreciate rather than depreciate (yeah, yeah that’s first-year accounting coming into play) – so here are some tips on what to look out for, outlined by those who went further than first-year financial studies:

• Younger classics – 1970s, 1980s and early 1990s models with V8 engines and preferably manual transmissions.
• Mercedes models from the 1970s are becoming sought after, with prices rising steadily.
• Go for brands that have continued with their ranges through the years, such as the Porsche 911 range.
• There have been various iterations of the 911 models, and the 1970 and 80s versions are now being hunted down.
• Other desirable brands include the sports version of the BMW 6 series, Maserati, Mazda MX5, and Toyota sports cars.
• The key driver behind the popularity (and thus high prices offered) for classic cars is scarcity. Because of this, South African classics are becoming a popular option for global collectors, as the country offers a decent price point.

Got it? Sweet.

Here are some pretty examples, in pictures, of the “most popular classic cars among South Africa’s high net-worth individuals, listed by price” according to a wealth report from New World Wealth in 2016.

Mercedes Gullwing 300sl (1950s) – $1.5 million

Porsche 550 Spyder (1950s) – $2 million

McLaren F1 (1990s) – $10 million

Ferrari 250 GT California Spider  (1960s) – $18 million

Ferrari 250 GTO (1960s) – $24 million

Absolute beauties. BusinessTech lists a few more – here – just in case you’re looking for the one you own.

If it all just got a little too surreal upon your realisation that you have, in fact, always owned one of these classics, it’s all good. Breathw, pop over here and set up a free consultation with our trusted financial advisors, Consequence, who will give you a peace of mind while they go through all your investment options.

What are the liquidity and tax implications? How does it fit into your overall estate? Would you be best served by investment funds or a share portfolio or perhaps both?

While they will answer all those questions, perhaps you want to just keep it quiet and let it sit for a little bit longer under that dust sheet in your grandpappy’s garage.

[source:businesstech]