Are you looking for a way to diversify your investments? Do you have a natural interest in cars? If you know your classic car history and enjoy taking a gamble, you might want to consider diversifying your portfolio with a classic car. It can double as a hobby that might just make you a bit of cash. Like wine, art, and antiques, many investors are investing in classic vehicles or current models that could become potential classics in the future. There are a number of pros and cons associated with investing in classic vehicles, however, and if you’re expecting a huge pay-out it may not be right for you.
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Potential Benefits of Investing
One of the biggest pros to investing in classic vehicles is the sheer entertainment factor of it. There are some truly stunning models available at classic car shows, which you can find more info about here. If you already enjoy browsing car galleries, attend classic car shows, or fix up old cars as a hobby, you could potentially turn this into a more lucrative pursuit. Many drivers love the history and heritage that lies behind classic vehicles; and becoming an owner of one is simply a fun way to pass the time. If you can take this natural passion and combine it with a bit of research, you could reap the benefits. Another benefit to this investment is that classic models are only available in a limited quantity, which means that they stand little chance of depreciating in value over time. This is particularly true for classic models that were discontinued after a limited run.
There are a number of ways to invest in classic cars as well. You could opt to own and maintain your own models, or you could buy into a classic car investment fund which uses member funds to buy more expensive sports cars without worrying about maintenance. Finally, you can diversify your assets. Classic car ownership could round out a portfolio that’s already padded with stocks, bonds, and real estate.
The Risks Involved
Although this form of investment is like a dream come true for some, it could be unrealistic for others. If you have quite limited funds to work with, it’s tempting to invest in a beater and restore it. However, if you don’t have the knowledge and background, you may end up with a losing proposition. You need to look at the history of each model as well as the current market value. The fact that the stock of classic cars is limited is a plus for investors in that they often keep increasing in value, but it also makes it difficult to buy in at the entry level. You’ll also need to think about the cost of maintenance and repairs over time. Your car will need to be in its best possible condition to keep the value up. You may want a classic car for the thrill of driving it on the weekends, but from an investment perspective it’s better to restrict your mileage.
The Bottom Line
Investing in classic cars can potentially provide financial rewards as well as personal satisfaction, but there are many factors to consider first. It’s often better to view collecting them as a hobby rather than a pure investment, as even sought-after models can potentially decrease in value or require costly repairs. Do your research, think about your lifestyle, and weigh the pros and cons before you take the plunge.