2025 Investment Car Outlook

This outlook is from Autofolio's 2025 Appreciating Automobiles report click here to download the full report. 

What to expect in 2025

Here are our key themes for the automotive market in 2025:

1. Through the worst

The car market saw a boom in 2021 and 2022, although some believe it was overinflated. Over the past two years, buyers have had great chances to enter the investment car market, but we think these opportunities will become less common in 2025. Now, the outlook for 2025 looks positive. While 2024 was full of uncertainty, that uncertainty has now faded. Investors have a better understanding of the market and can plan with confidence. We believe this will boost activity and deal-making in the investment car market.

2. Goodbye to premiums

A trend that started in 2023 continued through 2024 and is likely to carry on into 2025. Even rare, hard-to-get cars are no longer selling for high premiums, making it harder to flip new cars for profit. This is happening for a few reasons. Manufacturers now have a better understanding of the market and are producing more of their most popular models, making "limited edition" cars less exclusive. They are also raising prices on new cars because they know customers are willing to pay more. This allows manufacturers to keep the extra money rather than letting it go to resellers in the secondary market. With more supply and higher prices, cars aren’t holding the same premiums they once did. As manufacturers continue this approach, we expect the trend to persist into 2025.

3. Falling finance

Despite fewer rate cuts than expected in 2024 and the strong possibility of rates being held, professional investors expect a series of rate cuts in 2025. Consequently, this imminent shift foretells a decline in APRs for car purchases, which is poised to heighten interest in acquiring cars. This impending further reduction in finance costs serves as a favourable tailwind propelling forward all investments within the automotive sphere.

4. Modern classics

Modern classics—a term frequently used in the investment car market—refer to contemporary vehicles with the potential to achieve classic status. This niche focuses on identifying cars near their depreciation low, acquiring them, and holding onto them as their value appreciates over time. Despite the growing buzz around modern classics, significant opportunities still exist in this segment. As we look toward 2025, the majority of our watchlist consists of vehicles from this category. These cars offer more than just collectability; they provide drivability, lower maintenance costs, and exceptional value, making them some of the most promising assets for high returns in today’s market.

5. Importance of quality in classics

Our analysis highlights that 2024 has been a challenging year for classic car owners, particularly those with vehicles from the 1970s and earlier. Declining prices and incomplete sales reflect a significant shift in the investment car market, as the prime demographic of buyers increasingly favours more modern classics over older cars. Nevertheless, exceptional cars from this earlier era have continued to set records in 2024, proving that quality remains a key differentiator. Looking ahead to 2025, we anticipate this trend will persist: average examples from this period are likely to face ongoing price declines, while top-tier, high-quality classics will continue to defy the broader market trend and outperform.

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