HAGI Top Index (Historic Automobile Group International)

CTi FLEET AGE DISTRIBUTION

6%

1-3 19%

4-6 25%

13%

7-9

AGE IN YEARS 15+ 19%

10-12 19%

13-15

that follow. There are clear mechanisms by which high-end vehicles can drive up prices for those on the lower end. One is Principle of Substitution. If a $100K vehicle appreciated 10 percent or more in the past year and is now beyond a certain shopper’s budget, they might very well look for a similar car (a substitute) still within their price range and buy that instead. 1,19

This isn’t just vague “trickle down” theory – examining some 3,500 vehicles from popular marques with vehicles ranging from $10K to $1M+ show a clear trend. When the most valuable vehicles ($1 million+) from a brand have appreciated at least 10 percent year-over-year, less valuable ones from the same marque tend to appreciate. The timing lag between top dollar vehicles and their lowercost substitutes can be between a few months to two years, depending on the marque. But the trend is almost universal —the more valuable cars lead the way. 1,19

For some “lesser” marques, like Chevrolet, the most valuable cars depreciate last. But for marques of distinction like, Ferrari, Mercedes-Benz, Aston Martin, Jaguar and Lamborghini (e.g. Fund marques) looking for vehicles one pricing tier down occurs faster and with more ease because vehicles at all ends of the pricing spectrum for these marques still represent consistent and high-quality substitutions to the +$1mm vehicle of the same marque. Put another way, a top end Ford is much different in quality than a low-end Ford, but a “lower-end” Ferrari still represents the top-end of quality in the market regardless of price.

1,19