Is classic car investment worth it after fees?

Is it worth investing in classic cars?

Investing in classic cars, one of the luxury assets, is worth it only if the price rises by more than the round trip and the carrying costs, and the sale house sets much of the round trip. RM Sotheby’s charges 12% of the hammer price up to $250,000 on a car at its Monterey sale, while Historics in the UK charges 26% up to £250,000, plus VAT on the premium. In our worked examples a car must rise 24.4% in the first case and 49.1% in the second, with an example 10% selling commission, before the seller’s proceeds equal the buyer’s outlay, and 71.0% in the UK case with five years of low-cost running costs (Unmatched Capital’s calculation, set out below). Historics says its vehicle commission is negotiable, so the 10% is our input and not its rate.

The case for the category is real. Laurs and Renneboog, in a 2018 Tilburg working paper on 29,000 classic car auction sales held worldwide from 1998 to 2017, found that classic cars appreciated 5.63% a year in nominal terms, or 3.37% in real terms, both before transaction costs, on a hedonic price index built from those sales. A hedonic index is a statistical estimate, not an average of sale prices. Over two decades, the authors report, classic cars beat equities and art on a risk-adjusted basis and lagged bonds and gold.

Neither figure is what a buyer received. The Laurs and Renneboog returns are index returns before the auction commissions in the next section, and an owner pays for insurance, upkeep and storage on top. Classic cars share the round-trip problem with collectibles and watches, and add insurance, storage and upkeep that are paid every year.

Are classic cars going up in value?

Classic car values mostly fell or stood still in 2025 on the one dated index we could read in full, Hagerty’s UK Price Guide, where only two indices grew and both cover cars from the 1980s and later. Hagerty UK reported in December 2025 that only two of its indices, Hot Hatch and RADwood, showed meaningful growth against December 2024, and that nearly 80 percent of values in its Price Guide had dropped or stayed static. Its Classic Index and Best of British were both down, and Best of British stood at its lowest level since its creation in 2018. Hagerty gives no percentage for any index. Hagerty’s US pages could not be read, so no US index figure is used.

The UK Price Guide tracks more than 3000 models and updates quarterly. A team sets each price from insured values, public and dealer sales results and other data, so a Price Guide value is a considered estimate, not a transaction price.

Knight Frank described Monterey Car Week as a bright spot during a subdued year for classic cars, noted a yellow 1995 Ferrari F50 achieving US$9.2 million, and wrote that cars from the late 1980s to the early 2000s are now entering collectible territory. Its Luxury Investment Index, which covers more than cars, closed 2025 down 0.4% and has risen 38.6% over ten years; the page gives no figure for cars alone.

Source and measure	Period	Figure	What it leaves out
Hagerty UK, UK Price Guide values	Review of the year published December 2025; indices compared with December 2024	Nearly 80% of values down or static; two indices growing	No index percentages; estimates, not sale prices
Laurs and Renneboog, 29,000 auction sales (working paper)	1998 to 2017	5.63% a year nominal; 3.37% real	Before transaction costs; auction sales only
HAGI Index (the page shows a Top Index chart as an image)	Published monthly since 2008	Not readable	Fact sheets sit in a members’ area
K500, an index of 500 collectible cars	Auction results since 1994	A level of 535.442, undated	No returns or dates on the public page

Neither HAGI nor K500 could be used for a return, because the public pages gave no dated figure.

Do the best classic cars behave differently from the rest?

Classic cars at the top of the market have behaved differently from the average: in the Laurs and Renneboog paper, blue-chip classics returned 12.50% a year nominal against 5.63% for classic cars as a whole. Italian classics returned 11.28% a year nominal, and these two segments had the highest nominal returns in the study. The authors found affordable classics earned risk-adjusted returns similar to equities.

Hagerty UK saw the same split in 2025. It wrote that the very best cars still seemed to be in demand at almost every price point, citing a 1954 Mercedes-Benz W196R Streamliner sold for a shade over €51 million (£45.1 million). The Shelby Cobra Daytona coupe showed the largest value increase of any car in its Guide.

The top end also fell. Hagerty recorded Jaguar down 21.4% in the 12 months to December 2025. Hagerty attributes the fall in large part to a £3.6 million reduction in the mean value of the XKSS, the largest downward movement of any car in the Guide, which shows how one very dear car can move a marque figure.

A published index describes a segment, so a buyer should test a particular car against its own segment, as the sibling article on watches does with brands.

What does it cost to buy, hold and sell a classic car?

A classic car costs its buyer a premium on the way in, plus VAT or sales tax in some countries, then insurance, storage and upkeep every year, and a commission on the way out. The figures below are as published, except the seller’s commission, which is an example input, and the last column says what kind of figure each is.

Cost	Figure	Kind of figure
Buyer’s premium, Historics	26% of the hammer price up to £250,000, 20% from £250,001 to £2,000,000 and 12% above, plus VAT on the premium where applicable, which makes 31.2% on a £30,000 car at 20% VAT; the premium may be varied by announcement before the sale	Published terms, undated page
Seller’s commission, Historics	Negotiable, as Historics’ selling page words its vehicle commission; the worked example uses 10% plus VAT, which is 12.0%	Example input, not a Historics rate for cars
Buyer’s premium, RM Sotheby’s, motor cars	London 15% of the hammer price up to £200,000 and 12.5% above, plus 20% VAT; Paris the same in euros, plus 20% VAT; Monterey 12% up to $250,000 and 10% above, with buyers responsible for any local taxes, at no stated rate	Bidder information for three 2026 sales
Buyer’s premium, Bonhams, motor cars	UK 15% up to £500,000 and 12% above, plus 20% VAT; France and Monaco 15% on each vehicle, plus 20% TVA; US 12% up to $250,000 and 10% above, plus sales or use tax	Published pages; motor car rates unchanged on 1 October 2026
Other houses, as CLASSIC.COM lists them	H&H buyer 12.5% and seller 5%, plus a £100 entry fee; Gooding buyer 12% to $250,000 then 10%; Mecum buyer 10% and seller 10% with a reserve, plus a $350 to $1,000 entry fee	Aggregator’s listing, undated; tax not stated; rates “change from time to time, and can vary by auction”
Historics, as CLASSIC.COM lists it	Buyer 10% plus VAT and 1.5% more for online bids; seller negotiable	Aggregator’s listing; its buyer’s rate disagrees with Historics’ own terms above, which govern
Insurance, UK	An average premium of £154.59 for one classic car in early 2026, from £91.98 for Triumph to £208.66 for Mercedes-Benz among the ten makes Heritage lists	Heritage, a broker, so a vendor figure
Storage, UK	£155.46, £194.97 or £231.01 a month including VAT on 2025 prices; Heritage’s report says 82% of classic car owners keep their car in a private garage at home, without naming the source	Southcoast Classic Car Storage, one provider
Yearly spending except insurance, UK	Heritage’s survey of 841 owners: 26% spend under £500 a year, 36% £500 to £1,000, 24% £1,000 to £2,500, 10% £2,500 to £5,000, 4% over £5,000	Survey by an insurance broker
Spending on maintaining and enjoying, all UK historic vehicles	An average £4,567 a year per owner, as the page words it, on all historic vehicles, cars included; the page does not say whether insurance and storage are in it	FBHVC 2025 survey, over 19,900 responses; the page does not define the spend

The CLASSIC.COM figures are second-hand, and each sale’s conditions govern. Bring a Trailer’s fee could not be read, and no dealer margin or trade-in schedule was found, so the dealer route is not priced here.

How much must a classic car rise to break even?

On Historics’ 26% buyer’s premium and an example 10% selling commission, both plus VAT, a classic car bought at a £30,000 hammer price must rise 49.1% before the seller receives what the buyer paid, and 71.0% to 135.6% over five years once running costs are added. The £30,000 hammer price and the five-year hold are hypothetical inputs; the rest comes from the UK figures above. Every computed figure from here to the end of the restoration section is Unmatched Capital’s calculation, with VAT taken as 20% and not reclaimable.

Line	Low-cost owner	High-cost owner
Hammer price	£30,000	£30,000
Buyer’s premium, 26%, plus 20% VAT	£9,360	£9,360
Paid on the day	£39,360	£39,360
Insurance and storage a year	£154.59 insurance, Heritage’s average; £0 storage, home garage	Not added, because the FBHVC figure may include them
Yearly spending	£1,000, top of the most common Heritage band, excluding insurance	£4,567, the FBHVC average for maintaining and enjoying
Carrying cost, five years	£5,772.95	£22,835
Hammer price needed to recover the outlay	£51,287	£70,676
Rise needed	71.0%, or 11.3% a year	135.6%, or 18.7% a year

The FBHVC page does not say what its £4,567 covers, so the high-cost case uses it alone. If it leaves out insurance and storage, adding Heritage’s £208.66 and Southcoast’s £1,865.52 a year raises the five-year hurdle from 135.6% to 174.9%. If it includes them, adding them would count them twice.

The break-even divides the outlay by 0.88, because the seller keeps 88% of the hammer price after a 10% commission plus VAT. With no running costs the figure is £44,727, a 49.1% rise, and a car resold at its purchase price returns 67.1% of what the buyer paid. The next table applies two Laurs and Renneboog growth rates to the hammer price for five years, as an illustration and not a forecast. The page read does not state the index’s currency, so applying a global index to a sterling price is an assumption.

Hammer price growth, per year	Hammer price at sale	Seller receives	Low-cost owner	High-cost owner
0%	£30,000	£26,400	Loss of £18,733	Loss of £35,795
5.63%, all classic cars	£39,451	£34,717	Loss of £10,416	Loss of £27,478
12.50%, blue-chip classics	£54,061	£47,574	Gain of £2,441	Loss of £14,621

Only the blue-chip rate in the low-cost case beats the outlay, at a net 1.1% a year. It treats running costs as paid at each year end and ignores interest forgone on £39,360 and a restoration, both of which lower the result.

A longer hold spreads the commissions but adds carrying cost, so the hurdle falls per year and rises in total:

Years held	Low-cost owner: rise needed	Per year	High-cost owner: rise needed	Per year
1	53.5%	53.5%	66.4%	66.4%
3	62.2%	17.5%	101.0%	26.2%
5	71.0%	11.3%	135.6%	18.7%
10	92.8%	6.79%	222.1%	12.41%

At ten years the low-cost owner’s 6.79% a year is well above the 5.63% a year nominal that the Laurs and Renneboog paper reports for all classic cars before any cost. The high-cost owner’s 12.41% is a shade under the 12.50% it reports for blue-chip classics, so even that segment would have had to come close to repeating its study-period rate every year for a decade to break even.

Does the break-even rise change at a US or European sale?

The break-even rise is lower at a sale with a smaller premium: a car bought at a $100,000 hammer price at RM Sotheby’s Monterey sale of 13 to 15 August 2026 must rise 24.4% to cover the premium and an example 10% selling commission, against 49.1% on Historics’ terms. RM Sotheby’s lists 12% of the hammer price up to $250,000, so the premium on a $100,000 car is $12,000 and the buyer pays $112,000. If the seller keeps 90% of the hammer price, the hammer price must reach $124,444 before any running cost. No RM Sotheby’s seller’s rate was read, so the 10% is an input, and the example adds no tax to it.

Example at a hammer price of 100,000	Premium and tax on it	Buyer pays	Seller keeps	Rise to break even
RM Sotheby’s Monterey, dollars	12%, no tax rate stated	$112,000	90% (example 10% commission, no tax)	24.4%
RM Sotheby’s London, pounds, or Paris, euros	15% plus 20% VAT on the premium	118,000	90% (the same example input)	31.1%
Historics, pounds	26% plus 20% VAT on the premium	£131,200	88% (example 10% commission plus 20% VAT)	49.1%

The rows are not like for like: Historics’ example commission carries VAT, the others do not. Even so, the gap comes mostly from the premium. RM Sotheby’s London and Paris rates come from the bidder-information pages for its sales of 31 October and 28 January 2026. Both are 15% up to 200,000 and 12.5% above. A US buyer may also pay sales or use tax, which Bonhams’ US page says is added to its premium, and a buyer in a VAT country pays 20% on the premium on these schedules.

Running costs would lift each figure, and this page found none for the US or Europe, so the dollar example stops at the sale. The position does not change with the country: the price must rise by more than the round trip, which here runs from 24.4% to 49.1%, before the first year’s insurance is paid.

How much do running costs matter next to the price rise?

Running costs add 21.9 percentage points to the 49.1% hurdle for the low-cost owner and 86.5 for the high-cost owner, so in the example they are the smaller hurdle in one case and the larger in the other. The premium is fixed by the sale’s terms. The carrying cost depends on the car and on how it is kept, which is where a buyer has a choice.

The decision rule that follows is the publication’s analysis, not a finding of any source. Divide the yearly carrying cost by the price paid and set the result against the return expected. The low-cost owner’s £1,154.59 a year is 2.9% of the £39,360 paid, and the high-cost owner’s £4,567 is 11.6%. The Laurs and Renneboog paper’s 5.63% a year for all classic cars is before transaction costs, so a car whose carrying cost is 2.9% of the price paid uses about half of it before the commissions are counted, and one at 11.6% uses about twice the 5.63% and nearly all of the blue-chip 12.50%.

Costs that are mostly fixed amounts in pounds weigh most on cheaper cars. The same £1,154.59 on a £150,000 hammer price would be 0.6% of the £196,800 paid on Historics’ terms, and five years of it plus the commissions would need a 53.5% rise, against 71.0% for the £30,000 car.

The strongest counterargument is that the costs are not fixed. Insurance follows value, and a specialist bill for a £150,000 car is larger than for a £30,000 one, so the ratio falls by less than this arithmetic shows. No source read gives running costs by price tier, so 53.5% is a floor on the hurdle. The second counterargument concerns what the costs are. The FBHVC figure covers “maintaining and enjoying”, so part of it buys use, and the low-cost case assumes a home garage, where Heritage’s report says 82% of classic car owners keep their car, without naming the source. A buyer who intends to drive the car can set part of the spend against use, and a buyer who wants only the price rise cannot.

Does restoring a classic car add money or cost it?

A full restoration can cost more than a cheap car is worth: Restorists, a UK directory of restoration specialists, says that on most volume classics it costs more than the finished car is worth, though it gives no figures, and no source read compares restored sale prices with restoration costs. It gave hourly rates on 24 September 2026 of around £45 to £55 at the cheapest workshops, around £60 at an average one and around £70 to £90 at top marque specialists, and adds that rates run from roughly £65 in parts of the North and Wales to £135 and above in the South East. It advises a 20% buffer for hidden rust.

The page uses a 700-hour restoration as an illustration. At its £60 average rate that is £42,000 of labour, 1.4 times the example car’s hammer price, before parts and the 20% buffer. A buyer weighing a project car as an investment needs a quote in hours and a dated comparison of finished cars of that model.

Do you pay tax when you sell a classic car?

Tax on selling a classic car depends on the country, and the two tax authorities read for this page treat a car differently. In the United Kingdom, GOV.UK says you do not pay Capital Gains Tax on your car unless you have used it for business, although the same page says tax may be due on other personal possessions sold for £6,000 or more. In the United States, the IRS says in a page reviewed on 24 September 2026 that almost everything owned for personal use is a capital asset, so a gain on selling a car is a capital gain, and that net capital gains from selling collectibles, such as coins or art, are taxed at a maximum 28% rate. Losses on personal-use property such as a car are not deductible. The page does not say whether a classic car is a collectible. The 28% rate uses the definition in section 408(m) of the Internal Revenue Code, which lists works of art, rugs, antiques, metals, gems, stamps, coins and alcoholic beverages and does not name cars, so whether a particular car counts, for example as an antique, is a question for a US tax adviser.

The tax on the buying side also differs. The sale houses read add 20% VAT to the premium in London and Paris, and Bonhams adds sales or use tax in the US. No tax authority was read for any other country, so a buyer or seller elsewhere should take local advice. This page does not cover a car used for business or by a dealer, the position of a trustee or company, or a share in a car held through a syndicate, and a tax adviser should confirm the position before a sale.

What this means before you buy a classic car as an investment

Before buying a classic car as an investment, a buyer should price the round trip and the carrying cost on the channel and the car actually in view, because 49.1% and 71.0% belong only to the example. In practice:

1. Get the buyer’s premium, the seller’s commission and whether VAT or sales tax applies from the house’s own terms for the sale, in the sale’s own country, and work out the rise that covers them.
2. Get an agreed-value insurance quote, the storage price or confirmation of a home garage, and an upkeep estimate from a specialist for that model.
3. Divide the yearly carrying cost by the price paid, and set it against the 5.63% a year nominal that a price index of classic car auction sales rose from 1998 to 2017, before costs, and the 12.50% for blue-chip classics.
4. Compare the car with the nearest published index for its segment and market, such as Hagerty UK’s, not the market as a whole, because only two of those indices grew in 2025.
5. Ask whether you would keep the car if the price stayed flat: in the example it loses £18,733 for the low-cost owner.

The net return calculator runs the first table on your own figures. For the Historics example, enter 31.2% as the buying cost, 12.0% as the selling cost, 0% for insurance and the yearly total in the storage and servicing field, because it charges insurance as a percentage of the car’s value at the start of each year. Its answer may still differ from this page’s by a small amount. None of this is investment advice.