Together with reputable car specialists and auction houses around the world, Alpen Partners helps its clients build their classic car collection. Classic cars have become, along with paintings and real estate, part of a wealthy family’s portfolio of assets. Unlike many other assets, classic cars can be enjoyed and driven on beautiful roads while they accrue value, leaving their owners with both memorable life moments and a valuable asset.
For most people, owning a vehicle is a necessary, yet costly, part of life. The costs that come with buying and maintaining a car can be a hassle, but there are some people who benefit financially from owning a car. Over the past decade, more and more people are finding the benefits of investing in classic cars, as well as art and other antiques. Like many things, classic and rare cars can hold their value, making for a valuable asset.
Investing in antique and classic cars can be a great option compared to traditional investments, largely due to the possibility of high profit.
What’s a Good Investment?
In order to invest in classic cars, you should know what you want in your collection. A classic car generally dates back at least 15 to 25 years with some unique qualities that make it interesting to collect. Unusual designs, limited production runs, and rarity can all make a car more valuable to buyers.
Make and model are very important, as well as the condition. An older version of a certain make and model is usually worth more, but that means nothing if the car is in bad condition. Factors like mileage, how much of the original car is intact, and any original documents can all influence the car’s value.
Rare cars are what you want to be looking for. When choosing a classic automobile, you should know how many of the particular make, model, and year exist. For this reason, many experts recommend German and Italian makes, like Porsche and Ferrari, because those companies didn’t make many cars. The less duplicates of a car, the better.
Many investors and collectors aren’t only interested in the physical makeup of the car, but also take the history of the car into consideration. The market is heavily affected by nostalgia. Buyers will often purchase a car they once owned previously or have memories associated with.
Before beginning your classic automobile investment journey, make sure you do your research. Avoid buying on impulse. You don’t want to end up with a car on your hands that nobody wants or will cost more to restore the asset than you will earn back.
Because of the internet, knowing what cars are valuable and worth owning is easier than ever, which is good for both the investor and collectors. The internet allows careful investors the ability to quickly do the needed research to make smart decisions about which cars to purchase.
The internet is your friend. Use this as a tool to find out all of the car information you need, but also rely on networks of collectors, enthusiasts, and even previous owners who love to share what they know. You can also find online auctions that make it very easy to purchase the cars.
True to the investment world, it’s always smart to diversify your investments in the world of classic cars. If you can afford it, and are serious about making money from buying classic cars, buy more than one. It’s tough to predict which cars will increase in popularity and price, so having more than one isn’t unheard of.
Dedicated investors are known to have upwards of 300 cars in their collection.
Buy What You Like
Investing in cars isn’t the way to make a profit quickly. Though the market is expanding, experts say it may be slowing. By buying a car you truly like, you are softening the hit if the market ever devalues your car. Becoming attached to and being proud of the car will be a much more rewarding way to invest than traditional stocks and bonds.
When collecting vintage cars as an investment, it’s also important to keep in mind any added costs that can come with having an antique automobile. These costs include insurance, maintaining the vehicle, restoring it, and storage. Maintaining a classic car can be expensive. Some cars will require little maintenance, but others can cost you up to $10k in a single month. Don’t let that stop you from seeing the potential in the investment. Putting the money in may secure your return on investment.
It may also be wise to hire someone to manage the vehicle, like any other investment. Hiring a certified appraiser or consultant is also an appropriate step in order to provide feedback. Though it may increase the initial cost, it will ensure you are avoiding any problems early on. They can identify any issues and can save you money later on.
You don’t have to be a high-end investor to begin your collection. Like we said earlier, the internet has taken away some of the tricky steps of finding out what cars are worth owning – and not just any car will do. Finding a car in your price range, in good shape, with high resale value is the key to achieving a high return on investment.
As a smart investor, you will also want to make sure the vehicle you’d like to buy hasn’t been in any accidents and know how much of the car is made up of the original parts. These are all things that will affect the value of the car.
Classic cars have been one of the best performing alternative investments in the last 15 years, outpacing stock and bond markets as well as real estate. Classic cars can be purchased individually, or through various partnership or fund structures that will give some liquidity to the investment.