My kingdom for a horse (or a classic car)

Dries Laurs, Luc Renneboog

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper investigates the price determinants and investment performance of classic cars comprising various categories starting from veteran cars (built between 1888 and 1907) up to modern classics (built between 1975 and 1990). We examine a sample of 29,000 classic car auction sales conducted globally between 1998 and 2017. A hedonic pricing methodology is used to construct several classic car price indices, which enable a risk-return analysis. Classic cars appreciated annually by 3.37% and 5.63%, respectively in real and in nominal terms before transaction costs. Investments in ‘blue chip’ classic cars (12.50%) and Italian classics (11.28%) generate the highest annual nominal returns. On a risk-adjusted basis, classic cars have outperformed equity and other emotional assets such as art, but underperformed bonds and gold over the past two decades. The risk-adjusted returns on the category of affordable classics are similar to those of equity investments.
Original languageEnglish
Pages (from-to)184-207
JournalJournal of International Financial Markets, Institutions and Money
Volume58
DOIs
Publication statusPublished - Jan 2019

Fingerprint

Car
Equity
Hedonic pricing
Transaction costs
Emotion
Price index
Auctions
Methodology
Risk-return
Assets
Art
Veterans
Risk-adjusted returns
Investment performance

Keywords

  • Alternative investments
  • Collectibles
  • Emotional assets
  • Hedonic regression
  • Collectible cars
  • Vintage cars

Cite this

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My kingdom for a horse (or a classic car). / Laurs, Dries; Renneboog, Luc.

In: Journal of International Financial Markets, Institutions and Money, Vol. 58, 01.2019, p. 184-207.

Research output: Contribution to journalArticleScientificpeer-review

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