Posted on 11/23/21

Inflation vs. Classic Cars: Who Wins

Inflation vs. Classic Cars: Who Wins

The staggering $38.1 million dollars that 1965 250 GTO Berlinetta Ferrari sold at an auction recently brought attention to a classic Ferrari. This is a remarkable amount, but it's even more amazing how low the "Compounded Annual Growth Rate" of this amount works out.

Wikipedia states that the car's original cost was $18,000. This is a compounded return at 16.92% per annum over the past 49 years. This is a return that most investors would be satisfied with, but it's not too impressive. (Yes, this vehicle was purchased originally in Italy. It is unlikely that it was ever bought in U.S. Dollars.)

To compare, Silver has seen an average 7.61% annual increase in price over the same period. The consumer price index (i.e. The official inflation rate has increased to 4.24%.

The 1965 250 GTO Berlinetta Ferrari

This Ferrari is the latest record for a car that was sold at auction. However, the current record for a car that was sold privately is $52 million for a 1963 250 GTO Racer Ferrari. It sold less than one year ago. Amazingly, this car's compounded annual growth rate is the same as the record auction price. This adds up to $14 million! (From what I understand, the original prices were roughly the same.

How does this compare to a typical collector car? Hagerty tracks classic car prices and estimates that a 1969 Camaro (V-8 255HP, V-8) will cost you between $16,900 for "Fair" daily drivers and $38,000 for mint-condition show-stoppers. An original price of $2726 in 1969 gives you an annual return of 4.1% - 6.0%, vs. 4.3% CPI, and a 7.9% rise in the price for Gold during the same period.

It's safe for me to say that classic car owners are not in it solely for the "Return On Investment." New cars lose value rapidly as they drive off the lot.

Move Car will ship the Ferrari to you, the proud owner!