Investing in Classic Cars: A Viable Strategy?

Investing in Classic Cars: A Viable Strategy?

When a car salesman tells you that something is a ‘future classic’, it’s almost always just worthless sales speak – in reality it is extraordinarily difficult to predict if something is going to become a classic in the future, no matter how beautiful it might appear now. This however, doesn’t mean that investing in classic cars isn’t a viable way of protecting your cash and potentially making some money too. Many people, both the super-rich, and those with a lump sum at the end of their careers, partake in this exciting form of investment. Would you rather have your money tied up in land, or a spectacular piece of engineering that you can admire every day?

Indeed, buying classic cars as investments has proven to be lucrative. The average value has risen 430% over the past decade. To compare, gold has risen 273% in value during the same period of time.

Jaguar XK120-C 1951
Jaguar C-Type – photo credit: Georg Sanders

How to invest in classic cars

What’s key is not being able to predict when a car is going to become a sought after classic, but being able to track the current classic car market, looking for opportunities by browsing sites like Exchange and Mart’s classic cars section. Really, the only reliable method of making money is by finding cars that are already classics at a good price, and then selling them on for a profit down the line. You can also identify current classics that you believe are going to become increasingly valuable over time.

As a general rule, if a car is a classic now, it’s always going to be a classic in the future, which means that there’s a good chance prices are going to rise as examples of the model become increasingly rare. Cars are involved in accidents, get lost, and sometimes just fall into disrepair, which means that surviving examples become that little bit more valuable. Be aware however that there are often trends, so things might fluctuate.

The classic car market moves all the time; it’s very difficult to put a specific price on some vehicles, because everything is quite simply down to demand. Classics are not really governed by the same rules as newer used cars, because buyers have different priorities. A particular paint job for instance can command thousands and thousands more if it’s very sought after. Fortunately however, there are classics available at all prices, so you can get involved without having to be a millionaire.

The Bonhams Aston Martin Works Auction
Aston Martin Ulster – photo credit: Trevor Earl

Investing in classics is not easy. To a certain extent you need an affinity for knowing what makes a perfect example of a classic car, but if you can pull it off, there’s a lot of money to be made, and you can enjoy your investment like art.

Here’s a guide that can help you choose the right classic car: http://jalopnik.com/this-flowchart-will-tell-you-exactly-which-classic-car-1226229515

Takeaway

There are certainly value in classic cars. Your job right now is to do your due diligence. You need to make sure that you are buying the right car, and have the resources for the car care. Caught in the hype won’t get you far; you need to plan your resources well.

Good luck in your classic car buying endeavour!

Ivan Widjaya

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.