Specialist insurance puts you in the driver seat to protect your investment 

In the first week of December South Africa will see one of the biggest private collection of classic cars in the country go under the hammer. With names like the 1960 MGA Coupe, the rare 1971 Boattail Buick Riviera, a Ford Capri Perana V8, and an original Ford Mustang Mach, classic car enthusiasts may decide to rev up a gear and turn their passion into an investment.

But, says Tarina Vlok, MD at Elite Risk Acceptances, a specialist high-net worth insurer and division of Old Mutual Insure, if you want to protect your vintage or even super car investment, it should always be treated with care and you should make sure that it is properly insured.

“Luxury super cars prove popular as alternative investments, but meticulous maintenance is a must,” says Vlok. “Bespoke vehicles with expensive price tags present a unique risk to their owners and in many cases the risks are amplified with classic cars, depending on how rare the vehicle is.”

She adds that some clients go to extreme lengths to protect their investment, including never driving the car and turning the wheels by hand, as well as parking it behind security-controlled glass walls.  “They understand the risks that come with buying such a car, what their insurer expects of them and why it is important to ensure it remains immaculate, but they also want to enjoy looking at their investment.”

Surprisingly, amidst global semi-conductor shortages, production delays and missed build slots, the pandemic hasn’t stopped the growth and demand for luxury and classic cars amongst high-net-worth individuals. Luxury automaker Porsche says it’s achieved a record result for the first three quarters of 2021: having delivered 217 198 vehicles worldwide between January and September.

According to Knight Frank, the value of the classic car market internationally has over the past 10 years appreciated more than that of watches, wine, jewellery, stamps, and art. Furthermore, a report by Fortune Business Insights, suggests the global luxury car market size is set to grow to USD 655.0 billion in 2027. The massive investments in luxury cars can be attributable to several reasons, among which comfort and quality stand out. Moreover, the growing trend of electric luxury vehicles worldwide is also fuelling the demand. Major luxury car manufacturers are launching electric variants of their vehicles, due to growing environmental concerns and increasing fuel prices.

What you need to know about protecting the value of your investment

Vlok says that there is no standard book value for these cars once they’ve been traded, because there aren’t high enough volumes of them being sold in South Africa. So you need to partner with specialists that have the experience to understand the specific requirements in managing, maintaining and insuring these luxury super cars.

Below are her top tips on what to consider when purchasing your fancy four-wheeled treasure, whether before the end of 2021, or if you are considering turning your passion for classics and supercars into an investment in 2022.

 

“Luxury, style, exclusivity, and scarcity: We know that your risk requirements are as unique as your bespoke motor vehicle; with elegance tailored to align with your style and individuality. What you expect from your car, you expect from your insurance: impeccable performance, absolute reliability and one-of-a-kind protection,” concludes Vlok.