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As Collector Car Prices Rise, Ferraris Represent Among Best Investment

Wealthy investors buying cars for good returns and no taxes

A growing number of wealthy investors and collectors are buying classic cars as a good investment for their rapid appreciation and low taxes. In the collector car hobby, few represent as good of an investment as FerrarisFerrariItaly, 1947 > present233 models
5131 photos
37 videos
. In a list of the top selling cars at auction in 2012 hold most of the top places, and a Ferrari 250 GTOFerrari 250 GTOItaly, 1962 > 19646 photos
built for Stirling Moss grabbed the record for the most expensive car ever sold at auction last year when it made $35 million.

A recent report by the Financial Times indicates that of any investment in the last decade, collector cars represent the best return on investment. Certain collector cars returned better dividends than blue chip stocks, real estate or precious metals. Among an index of the top 50 collector cars, the average car increased in value by 16% in 2012 alone.

In addition to the quick gains, cars offer a second advantage as an investment. In most places, buyers only pay sales tax when they purchase the car. There is no capital gains tax like with selling stocks.

For example, a 1959 Ferrari 250 GT BerlinettaNissan Gloria Gen.11Japan, 1999 > 2004 sold at auction in 2003 for $1,195,691. The car sold for $6,710,000 in 2012, an improvement on the original investment of 561%. In comparison, the Financial Times found that real estate in Manhattan appreciated 220% in that time, and real estate in Hong Kong appreciated 395%.

The top Ferraris are the models from about 1959 to 1969, especially the 250Ferrari 250 GT Gen.1Italy, 1954 > 196435 versions
353 photos
1 video
and 275Ferrari 275Italy, 1963 > 19672 series
14 versions
258 photos
series cars. Two 250 TestarossasFerrari 250 Testa RossaItaly, 1958 > 19585 photos
last year sold for $12 million and $16.3 million respectively. Other Italian cars from the period have seen gains as well, but not as high as the Ferraris. Outside of Italy, car collecting has almost become regional. Americans pay big money for muscle cars from the 60s, and MercedesMercedes-BenzGermany, 1924 > present197 models
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33 videos
and certain PorschesPorscheGermany, 1931 > present43 models
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29 videos
from the 50s and 60s get good money in Continental Europe. The British appear willing to pay for LotusesLotusUnited Kingdom, 1952 > present68 models
951 photos
7 videos
and JaguarsJaguarUnited Kingdom, 1922 > present53 models
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16 videos
.

The biggest danger of these rapid price increases is a second bubble in collector car prices. In the late 80s, investing in cars reached a similarly fevered state until the cars became over valued and prices fell through the floor.

Web sites like Bring a Trailer attempt to comb the web to highlight the best deals on fun, affordable cars for enthusiasts. When the site started a few years ago, most of the cars were $20,000 or under, but the prices have been slowly ticking up for the past two years.

There are still deals out there. Cars from the late 80s and early 90s are still available for reasonable money. Case in point the Jaguar XJ220Jaguar XJ220United Kingdom, 1992 > 19941 photo
that will go for auction on March 9 for an estimated quarter of what it cost new.

10. 625 Ferrari TRC

The tenth most expensive classic to be sold in 2012 was a 625 Ferrari TRC with an auction price of $6.527.000. Only two cars of this kind were made, which may explain this extremely high result.

9. Ferrari 250 GT

On ninth position we find a Ferrari 250 GT, which received a bid of $6.600.000 from a wealthy Ferrari enthusiast.

8. Ferrari 250 GT Berlinetta Competizione

Another Ferrari comes eighth on this list. $6.710.000 were offered for a 250 GT Berlinetta Competizione dating from 1956. The car had been a successful racer at the Tour de France, which was not only held for bicycles back then but also for cars.

7. Rolls-Royce 40/50hp Double Pullman Limousine - The Corgi

With a bid of $7.343.000 at an auction in Britain, this Rolls-Royce Silver Ghost made it into the top ten for 2012. This 101-year-old model, also designated "The Corgi" was the inspiration for a toy car by Corgi Toys.

6. Bentley 4½ Litre Birkin Blower

Dating from 1929, from the days of the legendary Bentley Boys, this Bikin Blower - named after driver Henry Tom Birkin - set a record auction price of $7.867.000.

5. Ferrari 410S

With its sleek body designed by Carozzeria Scaglietti, a twelve cylinder engine and 340hp, this Ferrari 410S from 1955 seduced a buyer into paying an amazing $8.250.000.

4. Ferrari 250 GT SWB California Spider

Another record car, another Ferrari: This Ferrari 250 GT SWB California Spider obtained a bid of $8.580.000, which makes it the fourth most expensive classic in 2012.

3. Ford GT40 Mirage

This 1968 Ford GT/Mirage sold for $11 million at RM's Monterey auction on August 18, 2012. It was the most an American car has ever sold for at auction. This GT40 was part of the first three cars to be painted with the blue and orange Gulf livery. It started as a Mirage, which was a company built more aerodynamic bodies for GT40s and were among the first to use carbon fiber. It was also the camera car for the film Le Mans.

2. Ferrari 250 GT LWB California Spider

Second place goes to another Ferrari 250 GT California Spider, this one however with a long wheelbase layout. Dating from 1960, this car obtained a bid of $11.275.000.

1. Mercedes-Benz 540K Special Roadster

However, the first place goes to a Mercedes 540K Special Roadster that was sold in 2012 at a Pebble Beach auction for the exorbitantg sum of $11.770.000. The car had passed the last 40 years standing in a garage until it found a new, well-funded owner.