Classic Cars: The Best Alternative Investment?
According to a recent report, classic cars may be a better financial investment than real estate. Before you start counting your money and thinking about selling your prized 1970s Datsun, there are some more details to consider. As much as your baby might mean to you, not all classic cars are the same and not all will give the big return on investment that can trump certain pieces of real estate.
High-end classic cars, like Ferraris, Bentleys, and Bugattis, increased in value in recent months by between 21 and 28 percent, whereas prime real estate only went up by about seven percent. That is a significant difference, but we’re talking about the most expensive cars and real estate that only the wealthy can afford.
What does this information mean for the rest of us? It’s still good news. Many kinds of alternative and passion-based investments are paying back in spades. Lower-valued classic cars are up, as are wines, coins, stamps, and other types of collectibles. The big money returns that major collectors are seeing on their million-dollar cars are trickling down to the less valuable vehicles.
What is driving the increase in classic car values is not fully known, but experts attribute it to the financial crisis and the fear it put in people of investing in real estate. Beyond that, collecting cars is seen as a fun and exciting hobby. They are gaining respect as pieces of art and of history and they only become rarer as time goes on. For these intangible reasons, collectible car values have been rising.
Is it time to sell your collection then? It’s hard to say whether classic car prices have hit their peak. Experts disagree on that point, but it is definitely not a bad time to test the waters. If you have been considering selling off a piece of your collection, take advantage of the upward trend and see what you can get. Of course, if you’re not in the hobby for the money, just keep enjoying the ride.