Philip Richter, managing partner at Hollow Brook Wealth Management in Katonah, New York, spoke with Crain Currency about how family offices are approaching collector cars as an asset class — including how values are changing, what makes a car investment-grade and why younger generations are driving renewed interest.
How did you first become interested in collector cars, and how has that intersected with your work in wealth management?
So I got interested in collector cars through my best friend that I grew up with in Greenwich, Connecticut. His father owned a Porsche-Audi-Volkswagen dealership. He was actually one of the earliest Volkswagen-Porsche dealers in the country, dating back to 1955–60, in that era. And his father, a guy named Malcolm Pray, was very passionate about cars and had a large dealership and sold it in the late ’90s. Unfortunately and tragically, Malcolm’s son — my friend — died in a car accident when we were 16.
As a result of that tragedy, I became very close to Malcolm’s father, and he and I did a lot together with cars. He had about 100 collector cars, and we took them all over the world to different shows. That’s what really spurred my interest in collector vehicles — having a mentor who had a wonderful collection, who shared it with me as a younger person and got me interested in it.
He actually has a museum in Bedford, New York, that still exists to this day with quite a robust car collection. He used the cars as a tool to get young people excited about a career and basically used the automobiles as a way to help underprivileged kids come to his museum, see the cars and get excited about what’s possible in America and in life.
When did you start to notice collector cars being treated as a serious asset class by family offices?
I think it’s actually a fairly recent event. Valuations of these vehicles started to pop — I want to say post-financial crisis, around 2010, 2011. There were always cars that were worth a lot of money. The Bugatti Royale sold in 1986 for $6.5 million — it was the most expensive car of the era. But the volume of participants in the auction market, in the secondary market, started exploding after the financial crisis.
Then it really accelerated as the ubiquity of digital networks and smartphones and mobile devices took off, with the advent of a lot of online platforms like Bring a Trailer — completely changing the access game. I call it the on-ramp to the collector-car universe. It suddenly became very accessible to a lot of people globally.
So the market really exploded over that time period. And now we keep waiting for things to slow down, but auction outcomes continue to reach new heights. There’s more and more interest in collector automobiles. There’s actually quite a resurgence of interest in automobiles among young people who are really passionate about cars.
And then there’s a lot of nostalgia. During COVID, people were stuck at home, wondering if we were all going to live another day. That drove a lot of nostalgia purchases — where people had maybe reached a point in their life where they had disposable income, they could go online safely without getting COVID and bid on that Porsche 356 they dreamed about. Or that Ferrari. Or even simpler cars like Pontiac Trans Ams and Datsun Z’s — things of that sort became very popular during that period.
In your experience, do family offices view collector cars primarily as passion projects, stores of value or speculative investments — or some combination of the three?
I think it’s a combination of the three. I think you’ve got to kind of bifurcate this, because you have situations — like here at Hollow Brook Wealth Management — where we have clients who have been collecting cars for decades. It’s only recently that those cars have come into the spotlight as unbelievably valuable assets.
So for example, if a family owned a car — let’s say a Ferrari from the ’50s or ’60s that was a race car with provenance — in the ’50s and ’60s, those cars weren’t worth anything. They were outdated race cars. You couldn’t drive them anywhere. Even in the ’70s and ’80s, they were beautiful, but what do you do with a Ferrari race car from 1962? There wasn’t a big vintage-racing crowd. Goodwood in England hadn’t really taken off in the way it has today. So these cars were sort of orphans, and they had no purpose.
Today, if those families kept those cars, they are now worth $10, $20, $30, $40, $50 million — if they have racing pedigree. So I think you have to separate out those collectors who’ve owned and been in the collector-car world for many years, who are now seeing that if you look at their asset allocation on a pie chart — their real estate in Palm Beach and Greenwich is X, their equity portfolio is Y, their fixed-income portfolio is Z — suddenly, you can’t ignore the fact that their Ferrari is now worth $20 million. Or the Aston Martin they bought in 1974 is now suddenly worth $1.2 million.
That’s a different thing than, say, newer money looking to allocate into collector cars. Or even people who bought cars in the 2012, 2018, 2020 time period. Even those cars now have to be represented on a balance sheet or a statement of net worth, because they’re valuable. And I’m talking about stunning developments — like a later-generation Toyota Supra that used to be a $20,000 car now being a six-figure vehicle if it’s in good condition, the right year, the right options, etc.
So depending on one’s net worth, even as you go down-market into “cheaper” cars, those have gotten more expensive, too. There’s no ignoring these assets on a balance sheet, because they’ve become very valuable. And that’s true across the board.
So I think it depends. If it’s a family getting into collector cars and starting to buy, yes, it depends on what they’re buying. But these are real assets. These are works of art, depending on the type of car you’re talking about. Generally, many of them are low production, and they’re special. They represent an unbelievable 100-year time in human history — where we went from a horse-drawn carriage to full mobility, the ability to drive everywhere. The change in urban sprawl, all the things that the automobile changed in the world over the last 100 years, they are now being viewed as historically meaningful artifacts.
So let’s say you have a client who’s looking at it as more of an asset, as opposed to a passion project. How do collector cars compare to other passion assets, like art or wine, in terms of risk, liquidity and availability of market data?
Liquidity is the key question, and you nailed it. Cars have become incredibly liquid. Websites like Bring a Trailer — and I keep mentioning it, but there are other platforms out there, too: PCarMarket, Cars & Bids, Doug DeMuro’s old site. There are a lot of places now that provide liquidity in this market.
And you’d be shocked. If you go on Bring a Trailer, you’ll see cars listed where it says, “This car was actually sold on Bring a Trailer last year, and it’s back again.” The issue now is that it’s hard to get a slot to sell your car on these sites.
So what’s evolving is the rise of power sellers — people who are experts in presenting cars, making sure everything works mechanically and showing the car in a professional way to get the most value. A lot of that depends on the comments people leave about the car. When a car goes live on Bring a Trailer, it’s being judged by thousands of people. They’ll point out things like “That’s the wrong headlight” or “That’s not the taillight it came with.” If your car isn’t fully sorted by a professional, you’re not going to get the valuation you want.
But the big shift in the industry, especially during and after COVID, has been liquidity. There are also live auctions happening every week across the country. Auction houses like Barrett-Jackson, Gooding & Co., RM Sotheby’s — these firms are running sales constantly.
No, cars aren’t as liquid as stocks. But they are far more liquid than they were 10 years ago. Of course, some of the very high-end cars require special buyers in narrow markets. Selling a Ferrari GTO is very different from selling an Audi R8.
Still, this is a fundamental change in the market. And it has real implications for investors who are starting to view collector cars as a serious asset class.
Let’s talk about the other side of the spectrum, where collector cars often carry deep emotional or nostalgic value and aren’t necessarily seen as investment assets. How do you help families navigate decisions when sentiment might cloud investment discipline?
That’s a great question, and it’s actually no different from a family inheriting a property like a house on Nantucket when there are six siblings involved. There are a lot of considerations from a wealth management and generational-planning perspective — who’s going to share in the costs and expenses, who’s going to get the time to use it, and so on.
With an automobile, I think a good wealth manager will help the family weigh the pros and cons of taking on an asset like that. For example, if a family has a very rare, exceptional car, and one of the sons wants it badly — it was left to the estate — but the daughters don’t care about it, a good adviser will look at that son’s overall picture. They’ll take a holistic view of his balance sheet and determine what he can realistically afford. Because that car is probably not something he’ll treat as liquid. He’s going to want to keep it for emotional reasons.
Comprehensive firms like ours often have the ability to give an informed opinion on the true value of that car, get professional insight and also understand the market. We might say: “Yes, it was your dad’s car, and that’s meaningful, but there are a lot of them out there. It’s not worth that much. If you want to keep it, here’s what the value is, here’s what work it needs so you can actually enjoy it, and here’s what you should pay your siblings if they don’t want it.”
There are a lot of different decisions that come up. If it’s a significant asset, like a $10 million car, there needs to be serious legwork done on the portfolio side to determine whether that move makes sense for the client’s specific situation.
And then there’s the emotional side. The passion, the fact that it was your family’s vehicle. You’d be surprised how often we deal with this — not just with homes but with automobiles. It does happen.
Are you seeing generational differences in how these assets are viewed — especially between older collectors and the rising generation of heirs or principals?
Yes. “Demographics is destiny,” right? What you’re seeing in the markets right now is this generation who maybe came of age in the ’80s and ’90s and had a poster of a certain car on their dorm room wall that they wanted badly.
The classic Lamborghini Countach comes to mind. The Ferrari 308 — the “Magnum P.I.” car — comes to mind. These people now have wealth and are saying: “You know what? Collector cars are cool. I want that car.” And what’s really interesting about this trend is you’re seeing demand for a whole range of cars that, up until 10 years ago, were considered throwaways. They weren’t rare — they were mass-produced.
Take the Ferrari 308 as an example. They built a ton of them. But now there’s demand because people feel nostalgic and finally have the means. The catch is that, yes, there are a lot of 308s out there, but how many are truly investment-grade? How many have under 5,000 miles, one-owner history, pristine maintenance? Not many. Most have paintwork, high mileage or multiple owners, all of which devalue the car.
So even in those higher-production eras like the ’80s and ’90s, there actually aren’t that many great examples left. That’s what’s driving prices. Ten years ago, many of these cars were cheap. Look at the BMW E30 M3. It came to the U.S. in 1988 — wide body, DTM pedigree, one of BMW’s coolest postwar cars. It was a $20,000 car all day long until about eight or nine years ago. They only brought around 5,000 of them to the U.S., and most were raced or tracked, caged, damaged or totaled.
If you want an investment-grade E30 M3 today, you’re going to specialty vintage dealers, like EAG in Ohio. These are now six-figure cars, and if you go deeper into the Evolution models, some are worth four or five hundred thousand dollars. That was not the case a decade ago.
How does the rise of EVs or changing regulations around emissions and fuel affect the long-term outlook for combustion-era collector cars?
One could argue that internal-combustion-engine collector cars are like film cameras. There are many parallels between digital photography and the electrification of vehicles.
Does anyone really use a Hasselblad today? Yes, some wedding photographers still shoot with black and white Hasselblad medium-format cameras for the resolution. But no one shoots 35 mm film anymore or buys old Nikon F2s or F3s thinking, “This is better than digital.” The average iPhone — even models like the iPhone 9 or 10 — takes incredibly good images.
The same kind of shift is happening in the electric-car industry. But there are differences.
Special cars, like a V-12 Mercedes from 1995, won’t be produced anymore. Not many companies will build V-12 engines in the future. Ferrari is struggling with this because their pedigree is based on V-12s, which their owners revere. They are moving toward hybrid solutions with electric inputs joining the engine.The question is: Is a Ferrari still a Ferrari if it’s 100% electric? What will buyers think? Is a Harley-Davidson still a Harley if it’s electric? We don’t know.
Electric cars aren’t new. Early in the 20th century, Detroit Electric was a leading seller, especially marketed to women who wanted to avoid hand cranks. Today, there are even vintage-electric-car classes at shows. I think over time, special internal-combustion-engine cars — like a supercharged Bentley blower, a Duesenberg eight-cylinder or a Packard V-12 — will be valued as art and will resist being overtaken by electric cars as classics. Meanwhile, electric cars are becoming classics, too. Early Tesla sports cars from the mid-2000s are now collector vehicles.
Electric cars face issues like battery degradation, and we don’t yet know what that will mean long term. There are two schools of thought: Either demand for internal-combustion engines will rise as electrification spreads, or these cars will become obsolete like film cameras, especially if gasoline becomes unavailable.
Some classic cars are being electrified — like the Jaguar XJ convertible Prince Harry used at his wedding or classic Porsche 911s converted to electric. Where this goes is uncertain. I tend to think the truly important, complex internal-combustion cars will keep growing in value. Most electric cars today are appliances and won’t be serviceable in 20 to 25 years due to lack of electronics and parts availability.
What’s one piece of advice you’d give a family just beginning to explore collector cars as an asset class?
Don’t get into this industry and fall for “Oh, I saw a beautiful red Porsche at auction. I had to have it. It’s gorgeous.” Chances are, it’s not. You need to do your homework. You need an expert. It’s no different than having a money manager who does due diligence on a hedge fund or a distressed-credit manager. They’re experts who do their work. This is no different. You have to do the work and get expert help. You can’t just shoot from the hip.
You also need to be patient and wait for the right opportunity. If there’s a car you really want, it’s out there — it just has the wrong owner right now. You need to find it through networks, car clubs and experts. Buy the best you can afford.
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