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Why A Classic Car Is A Good Investment Choice
In 2021, the most expensive classic car sold on auction was a 1972 Matra MS670 for $6.78 million. Classic cars have always attracted auto enthusiasts, but there’s also a huge interest for those looking for a solid investment. These vehicles are generally admired for their attractive appearance, or for their role in
a particular moment in history. There’s a nostalgia around classic cars that make them highly prized by many. But is it a case of beauty is in the eye of the beholder, or is every classic car a great investment?
Not Every Old Car Is A Classic
A classic car is generally one that is over 25 years old, but that doesn’t mean that any old car can be a classic.
Other criteria include how rare the vehicle is, the brand and manufacturer, as well as the story of either that model or that particular vehicle. For example, a famous owner can make a car valuable even if the model isn’t generally considered to be a classic.
High Costs Involved In Maintenance
Owning a classic car is an expensive exercise, and there is no way around this. You need to be able to
maintain the car correctly and store it safely if you want the vehicle to keep its value, or grow in worth. This all depends on whether you plan to drive the car or if you simply want it for display purposes. Maintenance will always be a major cost you need to factor in.
One of the main reasons that maintenance is so pricey is because the vehicle is no longer in production. The manufacturers may be making a modern version of the car, but the classic model that you own will not be in production. This makes getting parts for the car a lot harder, and the older parts need to be maintained and fitted by specialists who know how to work on older vehicles.
Tax Advantages Of A Classic Car
Unlike when purchasing a normal car, a classic car generally goes up in value over time. This makes it an option for financial investment. This is certainly something to consider when it comes to
getting your tax files ready. But how does a classic car stack up against more traditional investment options that you see?
In a 2020 study,
classic cars came out as the second-best option when looked at over a ten-year time period. The best return on investment was in stocks, which came back with an average return of 107% over the ten years. The average return on the classic cars in the study came back with a return of 97%. The classic cars also showed a consistent upward trend over the first seven years, with a dramatic increase in the following three years.
Maintaining The Value Is Key
When investing in a classic car, you need to ensure that you invest in the value of the car too. This means it will only show you a significant return on your investment if you maintain the vehicle correctly. According to The Car Investor it’s vital to have the correct environment for storing the vehicle and have a schedule for maintaining it. Otherwise, you won’t get to see your investment bear fruit.
