From the February 27, 2012 issue of National Underwriter Property & Casualty • Subscribe!

Good Investment Vehicles

While an unabashed love of classic cars is what really drives collectors to spend millions or even tens of millions on the hobby, the purchases—in addition to providing ego boosts and adrenaline rushes—often prove to be good investments as well.

Indeed, given the low returns on more traditional investment plays, some underwriters report collector cars are becoming even more popular these days as buyers view them as a way to park money in a relatively safe investment—while also getting a lot more enjoyment than what a stock or bond provides.

“We’re the largest underwriter of fine-art collections in the U.S., and one of the trends we’ve seen is that when the parents pass, the children are liquidating the art collections and redirecting [the dollars] to other collectibles,  such as classic cars,” says Ron Fiamma, vice president and director of private collections for the Private Client Group division of Chartis.

Adds Donald Soss, a vice president in Fireman’s Fund’s Private Wealth group: “Wealthy people want to put their money in stable assets, and we’re not seeing a lot of devaluation in these cars, especially if they are not driven. It’s a hot market right now—not least because the HAGI (Historic Automobile Group International) classic-car indices have outperformed the S&P 500 for the last six years.”

Recent auction numbers demonstrate the growth: In January at the Barrett-Jackson auction in Scottsdale, Ariz., one of the hobby’s biggest buying events, the company generated more than $92 million in gross sales—a 32 percent increase over 2011.

European sports cars from the 1950s and ’60s are still seen as the gold standard among investors; interest in American muscle cars from the ’60s—which had been soaring in recent years—has flattened out.

Buying trends agents and insurers should be alert to: Pickup trucks from the 1950s and ’60s are starting to garner more attention, especially from entry-level buyers, notes McKeel Hagerty, CEO of Hagerty Insurance. “We’re also seeing increasing interest in early Japanese collector cars and British bikes like Triumphs and Nortons.

“We do espouse that cars are a good investment; if you can afford to buy a Mercedes Gullwing, it’s pretty much guaranteed you’re not going to lose money,” adds Hagerty. “But I don’t know too many people who collect who say they do it for the valuations; it’s about the passion and fun.”


Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.