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Investing in Classic Cars: Better Than Gold (Part 1)

Widely regarded as the greatest investor in the world, Warren Buffet has been known for making excellent investment decisions, such as buying into Coca-Cola and American Express. However, he did make a mistake when he was given the opportunity to dabble in the classic car market. In the year 1980, he was offered the Harrah Collection, which consisted of a total of 1,400 classic cars of the finest quality, including a 1913 Pierce-Arrow, 1932 Rolls-Royce Salamanca, and 1932 Bugatti Coupe. He could have owned the collection for less than a million dollars, but he passed. Several years later, a small portion of the collection was sold at an auction for $69 million.

This shows the unpredictability of the classic car market, and experts have failed for many years to analyze and track its movements. Unlike commodities such as gold and wine, no independent market index has been available to enable investors to understand the machinations of the classic car market, until a few years ago.

In 2007, a banker by the name of Dietrich Hatlapa wanted to expand his small collection of classic cars by acquiring a 1960 Porsche RS60 Spyder. However, he was disappointed and astonished to discover that no credible historic price-performance information existed at that time to provide guidance for his investment, and he had no way to compare his intended purchase with other assets. As such, he decided to develop the first authoritative independent classic car index by establishing a research organization called the Historic Automobile Group International, or HAGI.