Why South Africa's collectable car market is thriving despite economic challenges

South Africa is witnessing a surge in car collecting, driven by a passion for rare, vintage, and high-performance automobiles. From classic muscle cars to modern supercars, enthusiasts across the country are investing in these prized possessions, not just as symbols of status but as valuable assets with historical significance. 

While nowhere close to the size of some collectable car markets around the world, this is a rapidly growing space in South Africa. The global classic car market was estimated to be worth around $43.4 billion (R809 billion) in 2024. This indicates a significant global interest in classic cars, of which South Africa is a part. 

While a true enthusiast approaches car collecting much like any other collector, with a deep emotional and passionate connection to the vehicles they acquire, the reasons for collecting vary, but several distinct motivations stand out. 

For many, nostalgia is a driving force. A childhood encounter with a Jaguar E-Type, for example, can plant the seed for a lifelong dream – one that is finally realised later in life when financial circumstances allow.

Others seek continuity through family heritage. Inheriting a relative’s old car may hold no significant monetary value, but it remains priceless in emotional terms. Memories of road trips, childhood experiences, and shared family moments make such vehicles treasured heirlooms.

Then there’s the pure joy of automotive appreciation. Some collectors evolve into dedicated petrolheads, valuing cars for their craftsmanship, engineering, and driving experience rather than as mere transportation. These enthusiasts often join clubs, participate in rallies, and immerse themselves in the historical significance of specific brands or models. 

Despite challenging economic conditions, the local classic car market is growing mainly because of the growing recognition of classic cars as financial assets. For many collectors, classic cars have become a desirable financial asset class over the past few years. Increasingly, investors who are drawn by the prospect of high returns are including vintage vehicles in their portfolios. 

Yet, it's essential to recognise that very few cars serve as guaranteed investments. The appreciation of a vehicle’s value depends on factors such as the model, its rarity, the timing of purchase, and how long it’s been kept.

A significant appreciation in value typically underscores the need for patience and an informed choice – the key elements when investing in collectable cars. However, this space isn’t without risks; modern cars, for example, tend to depreciate significantly. Investment, therefore, is often a hit-or-miss game.

At the pinnacle of car collecting lies the world of rare and historically significant vehicles that can fetch millions at auction. Such cases highlight the upper echelon of collectable cars, where professional investors dominate, relying on elite auction houses and impeccable market knowledge. 

As this trend grows, industry experts emphasise the necessity of specialised insurance coverage to protect these collectables. Unlike standard vehicles, collector cars often appreciate in value and require tailored policies that consider rarity, restoration costs, and limited usage. 

When linking car collecting to insurance, the emotional and financial value of the vehicle becomes a critical consideration. Insurance policies tailored to collectable vehicles must not only address their market worth but also support restoration, protection, and maintenance. 

Standard insurers may issue generic policies, but passionate collectors need more than just transactional coverage. A knowledgeable and enthusiastic insurer will understand the client's passion, ensuring agreed value policies and a seamless repair process when the unexpected happens.

Specialist insurers understand that classic cars require specialist valuations and claims handling techniques, so their policies are typically designed by leading industry experts who are collectors themselves. 

These are experts who understand your needs when it comes to insuring your classic car or collectable modern vehicle. Classic car insurance products cater to the needs of individual collectors through tailoring a solution to suit their specific needs, and there is usually no minimum or maximum amount insured.

Ultimately, whether for emotional preservation or strategic investment, car collecting is a deeply personal endeavour. Insurance, when handled with the same passion as the collector’s own, provides peace of mind and ensures these automotive treasures remain safeguarded.

* Louw is a senior underwriter in the classic car cover product team at iTOO Special Risks.

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