Words by Chris Walsh
In the dynamic world of luxury investments, high-end vehicles possess a unique allure, blending aesthetic pleasure with financial acumen. The recent surge in the second-hand luxury car market presents a golden opportunity for investors and aficionados alike. Here’s why your vehicle could be more than just a weekend runabout.
Market resilience
Recent reports from industry specialists such as the Society of Motor Manufacturers and Traders (SMMT) reveal significant growth in the used car sector, with luxury models standing out for their enduring value and appeal. In the first quarter of 2024, the UK’s used car market grew by 6.5 per cent, reaching nearly two million units – the best start to a year since pre-pandemic 2019. This trend continues into the second quarter, with Auto Trader noting a substantial uptake in transactions and consumer demand. April even saw the first month-on-month increase in used car prices in a year.
High-end safe haven
Amidst economic fluctuations, high-end used cars present a particularly stable investment opportunity. Models like the Audi R8 and Mercedes-Benz SL-Class not only maintain their value but have seen price increases, demonstrating their potential as appreciating assets. Their rarity and desirability shield them from the rapid depreciation seen in more common vehicles, making them particularly attractive during uncertain times.
The electric edge
The shift towards electric vehicles (EVs) has now reached the luxury segment, adding an exciting and previously unknown dimension to the market. Younger EV models in the high-end spectrum suggest a growing consumer interest that aligns environmental consciousness with cutting-edge technology.
Interest in high-end EVs such as the Tesla Model S and Jaguar I-PACE is becoming significantly more prevalent, driving the market with their dual benefits of luxury and sustainability. The global push towards greener technologies and the automotive industry’s commitment to reducing carbon emissions make this trend particularly significant.
Although the overall electric market is still maturing, the entry of luxury brands into the EV space signals a promising horizon for potential investment opportunities.
More than just metal
For those with high-end vehicles already adorning their garages, current market dynamics offer a favourable scenario for valuation growth. Continuous demand for luxury and performance cars ensures these vehicles serve as both joyous indulgences and significant financial assets. Models like the Porsche Boxster and Bentley Continental have shown resilience in retail price and demand, underscoring the enduring appeal of a well-crafted automobile.
Rare and vintage
Beyond modern luxury vehicles, the market for vintage and rare cars has thrived for decades. Collectors and enthusiasts seek models that exemplify fine craftsmanship and historical significance, offering real potential for appreciation.
Brands like Ferrari, Lamborghini, and Aston Martin, especially those with limited production runs or unique provenance, continue to be highly coveted, commanding premium prices at auctions and private sales.
There are many notable examples in this sector but a great example of market appreciation would be the Porsche 911 Carrera RS 2.7. Manufactured in 1973 with just 1,580 units, this model is highly prized for its blend of historical importance, performance and design. In 2012, these cars were worth around £250,000. These days, you can now expect an estimate of around £1.2m.
Broadening horizons
The appeal of high-end used cars extends beyond domestic markets. Internationally, there is significant demand for luxury British and European cars in emerging markets, where they are often seen as status symbols. This global demand helps sustain high resale values, making these cars attractive investment opportunities. International expos and auctions provide platforms for buyers and sellers worldwide, broadening the opportunities for investment and collection.
Practical considerations
Owning a high-end used car comes with considerations such as insurance and maintenance. Potential investors and owners must factor in higher costs associated with insuring premium models and ongoing maintenance to preserve the vehicle’s condition and value. Engaging with specialised insurance companies and maintenance services that cater to luxury vehicles can mitigate these costs and ensure the longevity and performance of the investment.
The road ahead
As we progress through 2024, the luxury used car market continues to offer an intriguing pathway for those looking to diversify their investment portfolios or indulge in the pleasure of owning a high-performance vehicle. With strategic insights and an eye for enduring value, enthusiasts and investors alike can navigate this vibrant market to find substantial rewards.
In summary, the high-end used car market is more than just a trading ground for luxury vehicles; it’s a dynamic arena where beauty, engineering and investment potential converge. Whether as an asset in one’s garage or a potential acquisition, these cars represent not just mobility but a journey through the realms of luxury and investment, promising thrill and financial prudence to those who venture forth.
