Okay, let’s be honest. Many of you looked aside when I opined (with data and informed insight) that used cars and trucks are arguably one of the most intelligent investments in these tumultuous, financial times.
Guess. I was right (again).
According to a study that was released today via Classic.com, the top ten vehicle types have ranged from 58% return on investment (ROI) to a whopping 95% as of June 30, 2021. To put that into perspective, the S&P 500 has fallen from $4395.26 to $3818.83 (-13 %) and the NASDAQ has fallen from $14,503.95 to $11,177.89 (-23%). Even the US housing market, which is a 16% increase in median selling price from Q1-2021 to Q2-2022 will not be as good in the coming months due to mortgage rate hikes (e.g. Capital Economic projects a 5% drop in value mid 2023). To emphasize once again the big difference, the 100e best vehicle segment identified by Classic.com, the Porsche 911 Carrera 4 Coupe – 993 (1995 to 1997), still delivered a ROI of 26%.
The biggest reason for the explosion: online auctions. Like Zillow for real estate, Classic.com tracks vehicle list prices, sale prices, locations, etc. for collector cars to utility vehicles in both auctions and dealer sales. In the first half of 2021, 17,369 vehicles were auctioned online for a total of $589.4 million and during the comparable period in 2022, both numbers increased by 50-70% (28,904 vehicles for $920.6 million). “We see four factors driving this growth,” said Juan Diego Calle, the CEO of Classic.com. “The first is definitely a favorable economy. The second is the reduced availability of used cars due to the shortages of new vehicle supply. The third is the proliferation of online auctions, which has exploded since the start of the pandemic. “It’s time to buy cars from dealers so that they become familiar with the accessibility and transparency of buying cars online. And the fourth is a generational shift: we’re starting to see a large group of buyers in their 40s and 50s with disposable incomes, looking for a nice car from the 80’s or 90’s. They want cars to enjoy, not just collectibles.”
That said, even auctions outside of the internet have risen significantly. In the first half of 2021, the total for all live and online auctions was $1.2 billion (for 31,098 vehicles). By comparison, in the first half of 2022, all auctions rose to $2.2 billion (for nearly 45,000 vehicles) by one Mercedes-Benz goes for a whopping $142.3 million USD† In addition, dealers began to understand the new live purchase marketplace, which contributed to the auction numbers to create these incredible returns.
the top ten
The best-performing vehicle types over the past twelve months have been a mix of exotic vehicles, classic cars and utilitarian retro vehicles.
They were as follows:
1. Mercedes-Benz 200SE-W126 (1986 – 1991) 95% ROI
2. GMC Typhoon (1992 to 1993) 83% ROI
(2004 to 2006) 80% ROI
4. Porsche 928 – Basic model, automatic (1978 to 1982) 77% ROI
5. BMW 633CSi – Manual transmission, E24 (1978 to 1984) 73% ROI
6. BMW 540i – E34 (1992 to 1996) 72% ROI
7. Mini Cooper S Convertible – 1st Gene (2005 to 2008) 71% ROI
8. BMW 535is – E28 (1987 to 1988) 62% ROI
9. Honda S200 CR-AP2 (2007 to 2009) 59% ROI
10. BMW M6 Convertible – Manual transmission (2007 to 2010) 58% ROI
The worst ten
Shockingly, there were only 75 vehicle types that lost value in the past 12 months. These could likely be places to find value in the future (i.e. “buy low, sell high”):
1. MG TD (1950 to 1953) -18% ROI
2. Mercedes-Benz 230SL Pagoda (1963 to 1967) -16% ROI
3. BMW M5 – E39 (1999 to 2003) -15% ROI
4. Mercedes-Benz SLK230 Kompressor, R170 (1997 to 2004) -15% ROI
5. Lincoln Premiere – 1st Gene (1955 to 1957) -14% ROI
6. Mercedes Benz E250 – A207 (2010 to 2017) -14% ROI
7. BMW 635CSi – Manual transmission, E24 (1979 to 1989) -12% ROI
8. Mercedes-Benz 300SL – R107 (1985 to 1989) -11% ROI
9. Mercedes-Benz SL55 AMG – R230 (2003 to 2008) -11% ROI
10. Nissan Datsun 240Z (1970 to 1973) -11% ROI