Exotic Cars and Fine Art: A Parallel of Beauty and Investment - Las Vegas Edition

Fine Art: A Canvas for Investment

Fine art is an expensive but supremely eloquent way to announce you having taste and money. Fine art is like an exotic car – something declaring to the world: ‘I’ve made it!’. The art world is full of collectors with huge personal connections to their objects. From steampunkish pieces by Banksy to Basquiat, Picassos and Van Goghs, it’s a playground for the well-off who want to invest their money in beauty.

The reputation of the artist is also a strong determinant of value in fine art – works by famous and up-and-coming artists are known to increase in value by large amounts over time. If a reputable owner can be found then provenance (the history of ownership) is also a key concern – works spending time in the collections of prominent owners or museums will often be bid up to a high auction price.

Another thing giving art value is rarity. Works deemed gorgeous enough to take up limited, coveted wall space in the highest-end galleries may carry a singular value, and limited-edition prints or sculptures can also bring a premium. In recent decades, the stock of blue-chip workers has grown as a kind of hedge for people seeking alternative investments – with prices increasing at rates far outpacing traditional investments such as stocks or bonds.

Yet it doesn’t have to be expensive. However, buying and selling art, while an investment in beauty, is also an investment in a range of fees, worries, and care. There’s always a risk of values falling due to fluctuating trends, a depressed economy, or a sudden change in taste. Art isn’t a secure market. Yet despite all, buyers, whether fanatics or experienced collectors, press on. As Gillian Jones, a trustee of the National Gallery in London, articulated in a 2013 interview with The Guardian: ‘You buy art not just for the aesthetic but the investment potential.’

A Comparison of Investment Strategies

For those seeking to invest, exotic cars and fine art offer an opportunity to buy more than just the cost of the item. Unlike real estate or stocks, these products are tangible, allowing owners to experience the ownership of their goods in a personal and emotional way. An exotic car or a great piece of art displayed on your wall can bring pride to your personal space and provide you with a sense of personal satisfaction.

But there are also important differences between the two. Exotic cars, for example, require more active management. Maintenance is a big part of maintaining or enhancing the value of an exotic car. The ideal exotic car owner will keep the mileage low, store it out of the elements, and faithfully bring it in for regular servicing. Exotic car owners will also need to be mindful of market timing – some models tend to depreciate faster than others, and some exotic models may not appreciate at all until several decades after they are produced.

Unlike cars, the well-being of the physical object is less important to art investment, which is largely a function of the market and the value of the artist. Substantive care and preservation still matter, especially for older works, but an art item increases in value for all kinds of reasons, including scarcity, the artist’s current reputation and fashion. In addition, despite the recent boom in the art market, particularly at the top end, it is much less liquid than cars, so finding a buyer for a valuable painting or sculpture can take a while and sales are typically handled through auction houses or galleries.

Still, both markets are based on the principle of scarcity. Limited-edition cars and one-off paintings or sculptures are valued (for example) because there are few of them. Artists and motor manufacturers can develop followings, and buyers in both areas need to understand trends and discover emerging figures whose works will increase in value over time, as well as have relationships with dealers, galleries or auction houses.

The Role of Passion in Collecting

But for some collectors, passion supersedes profit as a motivating factor. The night at the track and the rush coming with driving a high-performance automobile can be far more rewarding than the value of the car itself to some exotic-car collectors. The sleek design, the roaring V12 engine, the way the vehicle responds to the road – these characteristics contribute to why a car, not just Its price, beckons. For art collectors, too, passion supersedes profit: many collectors identify personally with the works they bring home, finding meaning or inspiration in the pieces they acquire.

Passion differentiates these markets from other forms of investment. Indeed, some people are attracted to acquiring works of art, wine, or cars because they enjoy having a masterpiece, or even on their wall, or a shiny machine in their garage. Aside from the financial returns, there’s a sentimental value these objects can have and it is impossible to put it into monetary terms.

Future Trends in Exotic Cars and Fine Art

Meanwhile, both markets should continue to develop in the future. But technology is becoming an ever more significant factor in the exoticcars starting to become a reality. This might herald a new era of speed, power and value. Tesla and Rimac are just two of the companies leading the way, and we’ll have to see how they are received as long-term investments.

Digital art and NFTs (non-fungible tokens) are also a growth area in the art world, as collectors and investors increasingly take an interest in these emerging forms of expression. Artists are now using technology in ever more creative ways – and producing works which are not merely digital, but linked to the blockchain. This raising market is likely to change how we think about art, and how we value it.

In turn, as both markets shift, hunters will be required to keep up. Whether it’s a retro Ferrari or the latest NFT, notions of aesthetic purity, scarcity, and profit will continue to drive the desirability.