In many corners of the UK, beautiful cars are taking to the streets in increasing numbers. From Jaguar E-Types to the Ferrari 812 Superfast UK, supercar ownership has expanded by 20 per cent in recent years¹.

A car collection can become a project, a passion, and an asset for the future. But for those looking to purchase a luxury car for the first time, what are some key trends shaping the industry today? In our era of electrification and climate change, is supercar spending wise? And is there any place for petrol in the future? 

Smart investment or a dream come true?

Whether it’s art or handbags, wine or NFTs (non-fungible tokens), investors will always be drawn to valuable collectibles – and high-end cars are no exception. 

Rare classic cars – those over 25 years old – are deemed to have the potential to become high-value, appreciative collectibles, whereas modern supercars are sometimes viewed as riskier investments. 

However, value for rare hypercars (the 1 per cent of luxury cars which sit at the absolute top end of price and performance, and bottom end of production numbers²), has skyrocketed.³

“Not all modern supercars will offer an instant return on investment, but this can be mitigated by looking for limited edition models,” says George Farquhar, Global VIP Relations Manager, of McLaren’s Private Office. 

“Viewed as a long-term prospect, if you choose wisely, then residual values of modern supercars are strong when projected over 10+ years. Many industry observers suggest we are approaching the end of an era and the peak of the pure combustion-engined breed; now is the time to buy!” 

For those looking to kickstart a valuable car collection, features to look for include rarity, beauty and provenance. Cars with a racing history, previous celebrity owners, or those with historical or technological significance are usually most attractive to buyers. 

“The same rules apply to the car market as they do when somebody is looking to buy a Patek Phillipe watch or Birkin handbag. The strength of a brand is first and foremost,” says Farquhar. “Established automotive marques and elite luxury brands like McLaren, Ferrari, Bugatti and Rolls-Royce are seen as dependable based on their illustrious history, the strength of their engineering, and the size of their customer base.

“Exclusivity is also key. When we create a limited-edition model, we are very deliberate with production numbers so that demand always far outstrips supply. These cars often end up being good investments because they are hard to attain.

“Provenance is also an important factor, especially when looking to purchase race cars. For example, if the car was driven by a famous driver to a World Championship or won a prestigious race, then the car’s value will be significantly higher… even if it was made by the same brand in the same year.”

Despite the potential for appreciation, there’s often more to supercar spending than investment decisions alone. 

“I don’t think any of our clients are investing in cars purely as an asset class – as a cold, calculated investment,” says Nick Brandram, Director, HSBC Global Private Banking. “There is usually some kind of passion for cars.”

Edward Cave, Relationship Manager, HSBC Global Private Banking agrees: “I think there’s a general feeling for lots of our clients that cars are a way to reminisce about the things we loved in childhood. There is more to it.”

The big EV transition

For fans of powerful cars, there is a question on the impact of the 2030 UK and EU legislation, which bans the production of new petrol and diesel vehicles (followed by a ban on hybrid production by 2035). Fans of speed need not be troubled by the transition to electric in itself – an EV set the speed record at the Goodwood Festival of Speed last year, clocking a time of 39.08 seconds. 

Pre-loved petrol, diesel and hybrid cars will still be legal to purchase, but as climate threats continue to grow, there is undoubted pressure on the industry to move away from fossil fuels.

“A couple of years ago, we noticed a quiet trend amongst clients buying a particular Ferrari – the Ferrari 812 Superfast which is Ferrari’s last naturally aspirated V12. There was a general acknowledgement that the era of pure petrol was coming to an end and that the industry was transitioning to become hybrid and electric,” explains Cave. “I think they wanted to get their hands on what they believed to be an appreciating classic – something that would be valuable and have meaning in the future.”

But for Original Equipment Manufacturers (OEMs), the race to electrify engines is on. The McLaren Artura is McLaren Automotive’s latest offering: a high-performance hybrid supercar with a top speed of 205 mph. The Lotus Evija is Britain’s first EV contribution, an all-electric hypercar, with a top speed of 218mph. 

“The automotive industry is already well down the electrification path,” explains Farquhar. “This will continue to be the case, but it doesn’t have to determine the character of the cars. Ultimately, the regulations are a framework, with each car maker able to pursue their chosen goals within balancing the delivery of ‘traditional’ driving thrills and meeting legislation. 

“The McLaren Artura is a prime example of this and gives customers the choice of driving a high-performance hybrid, in many cases alongside a V8-engined supercar. And in the not-too-distant future, they will be able to add an electric-powered McLaren to their collection.”

Retrofitting is all the rage

Retrofitting classic cars with electric engines is also steadily growing in popularity. The process can be costly and complex, but the benefits are appealing. For rare classic cars which will retain or appreciate in value, retrofitting could prove a solid investment and eco-friendly decision. 

Trendsetters in the space include David Beckham, who recently invested in luxury electric car convertor, Lunaz Group,⁴ and gave his son a retrofitted electric 1954 Jaguar XK140⁵ as a wedding gift. Robert Downey Jr even hosts a series, Downey’s Dream Cars, on retrofitting classic cars to enable them to run on lower-emission technology.⁶

The industry is still dominated by start-ups however, as many traditional OEMs lag behind specialist conversion businesses when it comes to retrofitting services. This is perhaps due to the challenging economics associated with upcycling petrol cars.⁷