Buying a classic car is more than just a financial decision for most – it’s a matter of the heart. Here are a few things to consider before taking the plunge…
Price of collectors’ cars is falling
After a decade of dominating luxury investment options, we’re starting to see the price of collector cars slide. Since their peak in 2015, prices of classic cars have been falling – now down 14%.
It’s not cause for alarm, but it’s certainly the current trend. Ultimately, more people are looking to shift their cars than wanting to buy them, which will inevitably have an impact on their value.
Despite this, they’re still a good investment option. Vintage cars still hold a healthy 331.9 per cent return on investment since 2005.
Think with your heart and your head
While cars may be dipping in value, historically they perform better than other areas of luxury goods investment. If you look back at the past decade, cars have hugely. It may even be a good time to buy, after all – buy low, sell high, as they say.
At the end of the day, it’s a demand driven market. It’s also one that’s as led as much by the heart as it is the head. To keep your car in good nick and sellable, you’ll need to take it out for a spin once in a while.
Buy something that you like and it will bring you enjoyment. After all, a vintage car is so much more fun than a stamp collection, right?
How to spot a future classic
If you’re looking to make a bit of cash down the line, the main thing to look for is originality. What makes this car different?
Is there a limited number of this particular model? Is it straight from the showroom specification? There aren’t many cars that survive a couple of decades without a few tweaks to keep up with the modern world.
Take the Peugeot 205 GTi – this could be a good shout because it has more of a raw feel than modern cars. As car manufacturers automate more of the driving experience in modern cars, that experience is lost.
Premium is performing
Also consider your level of investment. If you’ve got the cash to splash, high-end models are still performing well. Premium car manufacturers are still seeing their models go for record prices. Last year, an Aston DBR1 sold for $22.5m – a record price for any British car, while eight exclusive Ferraris broke $5million.
While owning such cars is a dream for most of us, if you have some cash to spend and you’re looking to make a significant financial purchase, the big money is in premium brand cars that have something unique about them.
Early Porsche 911s are seeing strong demand, while Jaguar E-types are increasing year-on-year, making them popular options for investors. Keep an eye on the later series 3 V12 E-type roadsters in particular.
Luxury investments can be high-risk. Think about what makes this car different, do your research and buy a car that captures both the heart and the head. That way, even if you don’t make a tonne of cash on it, you’ll have a stunning piece of history to enjoy for years to come.