Newsletter 74 – Is It a Good Time to Invest in a Supercar?
IS IT A GOOD TIME TO INVEST IN A SUPERCAR?
Investing in supercars or collectible cars in South Africa can be compelling, but whether it’s a good time depends on your goals, risk tolerance, and long-term vision. Let’s break it down:
Market Trends & Growth Potential
Collectible cars (classics and rare models) have significantly outperformed traditional investments over time.
Globally, collectibles appreciated by 129% over the previous 5 years, and 404% over 10 years, versus gold at 195% and the JSE All-Share Index at 82% over the same decade.
Growing collector culture:
Despite economic headwinds, high-net-worth individuals are investing more in classic and high-performance cars, driven by nostalgia and potential financial returns.
South Africa’s supercar market is projected to increase by 9.1%, outperforming Africa’s average mainstream investment growth.
Recent performance shows variability:
In 2023, the classic, supercar and collectible car market dipped by about 6%, making it the second-worst performing asset class according to Knight Frank. However, some marques like Ferrari and Lamborghini still appreciated.
Price corrections can be healthy:
One Knight Frank commenter noted:
“In 2023 … Classic car values in South Africa dropped by 6%… It’s a correction in the market and that’s good for everyone in the collector car world as it prevents a really big bubble that would burst with more potency later.”
Operational Costs Are Real
Buying a supercar is only an investment if it appreciates in value. It takes knowledge of the industry and homework. It’s important to engage with a specialist company like Ferris Cars, who can advise on the ins and outs of finding, funding and purchasing the correct vehicle for your specific needs and criteria.
South Africa’s Unique Advantages
● Climate advantage: Dry and mild weather, especially in places like the Western Cape, helps preserve vehicles better than humid or cold climates.
● Automotive heritage: South Africa has a surprisingly rich automotive history, unique models and a healthy supply of modern classics.
● Asset security: Despite economic uncertainty, automobiles can be a safer investment than property and traditional investments. They are movable assets, attract no capital gains, and unlike traditional investments, they are tangible, physical assets that can be enjoyed.
Is It a Good Time to Buy?
For long-term appreciation and enjoyment, yes — the collectible market is growing. But if you’re seeking quick gains, be cautious.
Investing wisely requires deep knowledge, network access and patience. You also need to factor in maintenance, insurance, and storage costs.
There’s a temporary dip in the market, which shrewd investors will recognise as a buying opportunity. However, navigating it requires expertise, which is why you need Ferris Cars.
Final Thoughts
If you’re passionate, financially prepared, and looking at a long-term, dual-purpose investment and enjoyment, then now is a solid time to invest in supercars or collectible vehicles in South Africa, especially rare or historically significant ones.
However, if you expect short-term gains or lack access to expert valuation and preservation infrastructure, the risks might outweigh the potential upside.
If you would like help identifying specific models or finding trusted insurers, Ferris Cars is the company to contact. With over 30 years of in-depth knowledge of the supercar, collectible, and classic market, Ferris Cars is more than equipped to ensure you make an informed decision when purchasing your next investment.
Ferris Cars also offers a world-class service department, crypto payment options, and insurance and finance facilities.
Information sources: Knight Frank, Fourwheel Trader, Reddit
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