How to Invest in Classic Cars
Recent reports and trends have confirmed what classic car enthusiasts have known for years: collectible cars are a great investment. In fact, in today’s market, according to Forbes magazine, classic cars are sometimes better investments that high-end real estate. The returns on rare and collectible vehicles, both foreign and domestic, are higher than most alternative investments.
This doesn’t mean that the old Yugo that has been collecting dust in your garage for the last two decades is now worth a fortune. Investing in classic cars is both a science and an art. You need to know the market, understand what is desirable, and make wise choices about what you buy and sell. Not all classics are going to give you big returns.
There are a few factors that are important to consider if you want to acquire classic cars as investment pieces. The first, and perhaps most important, is rarity. The good thing about this quality is that you can quantify it. If a model was only made in limited numbers, odds are it will be worth more money than a more mass-produced vehicle.
According to experts, recognition is also important. There is no sense in investing in a car so rare that nobody else knows what it is. Sometimes rarity can go too far. Popularity is another important factor, but one that is difficult to measure. What buyers and collectors like changes and it can be difficult to know what will be popular ten or twenty years down the road.
If you are thinking of making investments in classic cars, take some important advice from Knight Kiplinger, a classic car enthusiast as well as a business expert. Buy first for the love of the car. Markets may be showing big returns on classic cars, but investing in a car is costlier than a traditional commodity or stock investment. If it doesn’t pan out as an investment, having a car you love that you need to hang on to for years is a good consolation prize. And, of course, don’t forget to ensure your precious investment.