The number of people investing in classic cars increases every year. People in the United States and EU consider classic cars as collectibles, and that’s pretty normal in an industry expected to reach 43.4 billion U.S. dollars in 2024. Moreover, for the last decade investing in classic cars has financially done better than many other collectibles like stamps or coins.
The process of buying a classic vehicle isn’t complicated. The first step is finding a vintage car that’s worth the investment, the next step is performing some maintenance, and that is it! You are ready to sell the collectible vehicle for a profit. As simple as it sounds, if you decide to invest your money in collectible cars, there are a few facts you have to know before you dive in. (Read about Mistakes to Avoid When Buying a Classic Car)
This article will introduce the top facts about classic cars every interested investor must know about.
Not All Old Cars are Classics
It is essential to determine if the car is classic and collectible or not; there are a few things to look at when examining a car to decide whether it’s worth the investment, vintage, or just an old rusty car that won’t pay off.
How old is the car?
The first factor is the production year. A vehicle can pass the age condition if it’s 40 years old; 25 years are enough in some cases. It varies from one city or state to another, and you have to do your homework and research the local market and interests. Of course, not all 40 years old cars are collectibles since there are other aspects to confirm.
Is it a rare car or available everywhere?
One of the essential features of the best collectible cars is they are entirely out of production. In fact, some might be a limited edition that you don’t commonly see without an occasion.
Manufacturing highlights play a significant role in deciding about a vintage car. It starts with design, color, and popularity and ends with engineering, safety, and history. All those factors and much more can add the vehicle to the collectible cars list.
Nostalgia is something to consider
Several cars are considered classics because they have impacted culture. People grew up with these cars around, turning them into movie stars. This emotional connection is worth being counted among classic cars’ features.
Due to all characteristics mentioned above, collectible cars’ value does increase over time, unlike ordinary vehicles, which are likely to lose their value as years go by.
The Return on Investment isn’t Guaranteed
Like any other type of investment, investing in classic cars is a bit risky; to generate a reasonable revenue, you have to buy a vehicle and repair it before reselling it. Problems usually occur during maintenance.
To bring the vehicle back to its state of origin, you must pay considerable money; additional costs include maintenance, storage, and insurance. The price can differ due to the car model, how old it is, and what kind of repair it needs. There are no ROIs or profits until the car is sold, which is not the case with other types of collectibles that might pay back a dividend-paying.
It is a Passion and an Investment
Most collectible vehicle owners consider their investment a hobby instead of a profit-making method. They don’t make the purchasing decisions depending on what others would like to buy, but what type of cars they want in their collection.
You can’t get your ROI until the vehicle is sold, which means the only advantage is to have fun driving the car safely until sold. Even if it takes some time, you will still have the option of enjoying the ride on all special occasions. How about participating in some local events or car shows? It is essential to buy the car you would like to have so you can enjoy it as much as possible.
Professional Shipping is Required
When buying or selling a classic car, there might be a need to ship it across the states. Sometimes, valuable vehicles should not be driven for long distances. Therefore, hiring the services of a professional classic car shipping company becomes a must.
Tempus Logix is a professional automobile shipping company with thousands of satisfied clients in its portfolio. The company offers to ship classic and valuable cars via multiple available options and prices. A price estimator is available on the company’s website for free.
A Significant Knowledge is Required
Investing in classic and collectible cars isn’t for nonprofessional enthusiasts. Comprehensive knowledge of all aspects is essential for investors. They must be able to tell if a car is valuable enough and if the price is reasonable.
They need to find an expert mechanic or be a skilled one themselves. Investors have to verify the car’s originality, perform the pre-purchasing check and be aware of the required maintenance the collectible vehicle needs.
Even if you decide to hire an expert to help with your investment, it is still very recommended to get as much knowledge as possible about collectible cars yourself to avoid potential risks.
Classic Cars are Depreciating Assets
It is well known that cars do lose their value over time, collectible vehicles are an exception to this rule, but they are still carso. For these collectible cars’ values to grow over the years, investors have to keep the vehicles in good shape, neat, and with excellent performance.
No one wants to purchase a rusty car with broken or worn-out parts, but excessive modifications are not preferred. The vehicles must be as close to origin manufacturing status as possible, and the rarity of the classic car can affect the depreciation rate.
Suppose you decide to invest your money in classic and collectible cars. In that case, there are a few things to learn about your investment. You have to be clever and knowledgeable enough to make the best out of your investment.