Investment Snapshot: The Classic Used Car Boom in Australia
The used car market in Australia is booming. Used car prices are on the rise, representing the latest investment opportunity. According to Moody’s Analytics market analysis, used vehicle wholesale prices are 37% above the pre-pandemic peak set in February 2020.
Wholesale used vehicle prices across Australia continued their relentless advance throughout the first quarter of 2021.
And used car prices reaching new highs are driven by demand for new vehicles exceeding supply. In some cases, the wait time for a new car can exceed a year. Toyota’s production has fallen 40% this year alone, according to CarsGuide, with the brand stating:
Due to the effects of containments in various locations, it is difficult to maintain operation
Elsewhere, Grays, an online marketplace and auction house, has over 1.3 million pageviews and nearly 200,000 unique visitors in its classic car category. Grays CEO Chris Corbin said the interest was unprecedented.
We’re used to seeing a high demand for classic Australian cars, but we’ve never seen anything like it.
The ARB Corporation, a 4 × 4 accessories giant, is also reporting surges in the used car market. In its half-year results, it turned in profits of A $ 54 million in just six months, an increase of 113.5% from the same period last year. Chairman Roger Brown wrote to shareholders to explain:
The company experienced a pleasant recovery during the six-month period ended December 31, 2020 after the worst COVID-19 impacts encountered in the last quarter of the previous fiscal year.
At the lower end of the car scale, if you have a used Toyota RAV4, you might be able to get A $ 30,000 from the sale. This is for a vehicle that costs $ 31,695 Straight from the factory.
The real investment, however, is in the luxury classic used car market. With the market favoring sellers, vintage cars are now the main opportunity for sophisticated investors.
And this is mainly due to two things. Car enthusiasts spend more time looking for their next purchase on the internet and people who never thought of buying their dream car are now thinking about it.
David Nankervis, co-founder and managing director of Trading Garage explains that he has been overwhelmed by the business.
What we are seeing are people spending what you might call emotional money, perhaps to lift their spirits or to reward themselves. So you’ve got things like Volkswagen Kombis going for crazy money, Porsche money, to people who grew up wanting one, and suddenly decided that was the time.
To score the most money in the dizzying used car market, these are the vehicles that are worth considering.
The dream vacation van that hit the roads in 1949, the famed Kombi is keeping the market boom happy. Business magazine, The CEO Magazine, mentions that rare versions go way above what you would expect.
Selling prices for the coveted 21-window Kombi topped AU $ 200,000, while even the least popular versions hit AU $ 145,000.
CarsGuide reported in February that a rare 1960 Volkswagen Kombi Samba Microbus set what is believed to be a world record. The vintage used car fetched A $ 202,000, beating both a 1969 Falcon XW GT that sold for A $ 135,000 and a 1968 Holden HK GTS Monaro 327 coupe that sold for $ 96,000 in from the same auction.
A long-time staple in the Australian auto industry, Holden closed on December 31, 2020. This marked the end of an era that began in the early 1900s. Now it is proving to be a lucrative investment for any enthusiast who still owns the famous brand’s car.
The very last Holden to roll out of the Australian factory, a Holden VF Series II SSV Redline, went straight up to auction in January of this year, fetching a maximum bid of A $ 750,000. This far exceeds its initial retail price of around A $ 65,000.
In February, another legendary Holden made headlines by becoming the most expensive Australian road car ever sold. The orange Holden HSV GTSR W1 Maloo Ute, one of four manufactured, sold for A $ 1.05 million.
Going back in time, classic Holdens are also a good investment. In June of this year, a 1977 Holden Torana A9X fetched AU $ 800,000 at Lloyds Auctions, breaking records. Just two years ago, a similar Holden Torana sold in 2018 at Lloyds for AU $ 500,000, showing a significant increase in Holden values in just 2 years.
Alongside Holden, another Australian Ford, while still producing cars, also has a fair share of the classic car market. In fact, an extremely rare 1972 Ford Falcon XA GTHO Phase IV would be the most expensive Australian car ever sold according to seller Australian Muscle Car Sales.
Bought by a collector for around A $ 2 million, the company said in an online statement:
We believe this is the highest single price ever paid for a road car made in Australia.
It follows a record year for Australian classic car sales, including the February sale of a 1971 XY Falcon GTHO Phase III for A $ 1.15 million via Slattery Auctions & Valuations. It was only a few weeks after the 2018 sale of the previously mentioned HSV GTSR W1 Maloo.
Of course, names like Ferrari and Porsche have always attracted the interest of vintage car collectors. This year, however, the vintage market continues to climb. If you’re lucky enough to be sitting on a rare Porsche like the magnificent Porsche 356 Speedster, you could consider making between A $ 750,000 and A $ 950,000, according to Dutton Garage. Not bad for a car that started life at around $ 1,500.
Other desirable collector Porsches, like the Porsche 944, which first debuted at the 24 Hours of Man in 1981, are now selling for a pretty penny. One of the estimated 87 Porsche 944 Turbo Cabriolets from 1992 sold for A $ 58,650 at the Bonhams auction in 2017.
Another increase in values includes classic Ferraris such as Testarossa, Daytona and the famous classic Ferrari 330 P4 from Ford vs Ferrari. A rare classic model of these cars will almost certainly bring six to seven figures.
One of the rarest classic Ferraris, the 1962 Ferrari GTO, was auctioned off in 2018 for almost A $ 66 million. Winner of the Man’s, the vintage used car racer is the most expensive publicly traded car ever sold.
Typically, luxury car manufacturers are big money. A 1956 Aston Martin DBR1 broke auction records at RM Sotheby’s in August 2017 when one sold for A $ 30.7 million, a world record for a British-made car.
To learn more about the sky-rocketing prices of some of the best classic used cars, read The Most Memorable Classic Cars For Sale Under The Hammer. And for two-wheeler fans, take a look at the expensive motorcycles that go under the hammer.