The Crittenden Automotive Library

Classic Cars—a Good or Bad Investment?

Classic Cars—a Good or Bad Investment?

Lucy Wyndham
28 July 2021

Whenever I see a classic car on the roads, I can’t help but stare as it passes by me. Whether it’s a classic Shelby or a sleek Jag, classic cars have a unique look that new models can’t compare to. And according to Statista, classic cars aren’t just about looks. The classic car market is only growing, with an 8.8% increase in market cap in 2020.

With that in mind, let’s go through the best reasons to invest in a classic car, while also giving you some reasons to think hard about this investment.

Classic Car Investment Pros

The best reasons to invest in a classic car are the limited supply, increasing value, and it’s a way to diversify your investments. Car manufacturers aren’t producing new versions of their classic cars, so the supply of these vehicles is in decline. A declining supply with either an increasing or stagnant demand means a corresponding increase in price. By purchasing a classic car now, you’ll give yourself a better chance of making money in the future.

Increasing Value

We can only characterize an investment as a good decision if it makes money, right? Luckily, truly classic cars are in high demand right now. That means if you do the proper maintenance and treat the car right, you’ll be able to sell it for significantly more than you bought it for in the future. But make sure you pick a recognizable classic car. By doing so, you increase the number of potential buyers in the future.

Diverse Investment

If you have investments in other areas, purchasing a classic car is a good way to diversify your assets. As an investor, the perks of a diversified portfolio are endless. You can make money while the rest of the market is losing value, or you can aim for certain returns every year. By adding a car to your portfolio, you have another asset that could produce income in the future.

Other Investments

The primary two reasons not to invest in a classic car are the maintenance time and costs, as well as high initial costs. Although classic cars are a fun investment, they’re not always the best way to make money. With the expansion of individual stock trading, almost anyone can invest in the stock market. Often, you’ll see returns on the stock market faster than a classic car investment.

If you do opt for a classic car, consider maintenance, too

Maintenance costs, both in terms of money and time, for classic cars is the primary reason against buying a classic car as an investment. If you can fix cars yourself, you may spend hours and hundreds of dollars making everything perfect. If you can’t fix cars yourself, the costs will be even higher.

High Prices

The classic car market has a high price to enter. As the prices of classic cars increase, so do the initial costs to enter. When prices are already high, you’ll have to wait longer to sell it and see the return you desired. The high initial prices can be a turn-off for many investors.

So as you can see, there are a few things to consider before investing in a classic car. However, if you have the budget, and an immense love for classic vehicles, why not go for it?