Biler som investering - En kvantitativ analyse af afkast og risiko: En kvantitativ analyse af afkast og risiko
Oversat titel
Cars as an Investment - A Quantitative Analysis of Return and Risk: A Quantitative Analysis of Return and Risk
Forfatter
Semester
4. semester
Uddannelse
Udgivelsesår
2025
Afleveret
2025-12-04
Antal sider
44
Abstract
This project looks at investment-cars as a niche market between classic finance assets and personal passion assets. The main question is whether selected “blue-chip” models can reasonably be treated as an alternative asset class and not just an expensive hobby for the ultra-rich. To answer this, I put numbers on return, risk and risk-adjusted performance and compare them with a simple, “boring”, liquid benchmark investment in MSCI World. The analysis is based on a self-constructed dataset of around 500 auction hammer prices in GBP for nine well-known collector models of both classic and modern cars, in the period 2013–2025. Prices are cleaned and aggregated to quarterly median levels per model, and I calculate log returns, annualised volatility and Sharpe ratios using a constant risk-free rate of 1% p.a. On that basis I build an equally weighted car index and compare it to MSCI World, measured at the same frequency. The calculations are supplemented by simple scenario and sensitivity analyses on ownership costs, auction fees and holding periods, and by a brief discussion of key market drivers for the collector market. In line with Damodaran’s distinction between valuation and pricing, the cars are treated as illiquid assets without cash flows, so pricing is based on comparable transactions rather than discounted cash-flow models. The results show that the car index delivers an annual gross return of about 11.7%, which is broadly in line with MSCI World over the same period, but with much higher volatility of around 40% compared with roughly 9% for the equity index. This leads to a clearly lower Sharpe ratio for cars. When realistic cost-of-carry and transaction costs are included, the net performance of cars falls under the liquid benchmark. At the same time, there is large dispersion between individual models, and data limitations (few trades, curated auction catalogues and “stale” prices) mean that the true risk is probably higher than the reported figures suggest. I conclude that investment-grade cars can be a meaningful, long-term supplement-investment for very wealthy and passionate collectors who get substantial utility from ownership, but that they are rarely attractive as a pure financial investment compared with low-cost global equity exposure. For most investors, classic cars should therefore be seen as a passion-driven niche allocation rather than a systematic way to outperform traditional markets.