Stocks and pensions continue to struggle in our slow economic recovery. You may want to consider taking some of those funds out of the market, and putting them toward alternate investments such as antiques and other collectibles. A classic car is one such investment. Here are some things to consider when buying one:
Know When to Buy
Every car goes through depreciation, because a car’s value initially depends on it being new and therefore great condition. Before a car becomes a “classic car”, it will have gone through depreciation and reached its lowest value. At some point, for classic cars, the trend reverses and the value begins to appreciate. Ideally, your investment in a classic car begins when it is fully depreciated, and just as the market for it – and therefore its value – begins to grow.
As with other collectibles, appreciation will fluctuate, and depends on factors such as scarcity, popular appeal, and original value. To figure out when your potential investment stops depreciating and becomes a “classic”, you should consult other collectors or dealers for the cars that interest you, as well as trade magazines and books. Monitor the prices of possible candidates over time to see when their prices begin to climb.
Know your Car and its History
You are not just buying a Corvette or a Rolls-Royce. You are buying a particular car with its unique history. A classic car is a used car, with potentially many years and miles on it. As with any used car, it is vital to obtain a vehicle history report, which can indicate accident history and other issues that affect the vehicle’s safety and value. It is recommended that you hire an expert to do a bumper-to-bumper check on the car’s health before you invest in it.
Buy a Car You Will Enjoy
It is important to buy a classic car you will enjoy having, and enjoy what you buy. Don’t buy a car only for its market value. Regardless of how well a car appreciates, you will spend time and money to maintain its exterior and keep it running. This is a cost that will diminish your investment in a practical sense, unless you actually enjoy the time and upkeep you spend with your car.
Classic cars are often bargains because they need some loving – that is, a missing part or extra maintenance. Parts for older and obsolete car lines may be hard to come by. Therefore, you must be willing to put in time into obtaining the part. Sometimes you might even need to make the missing part, or find someone who is competent to make it for you.
As with any significant investment, you should protect it from risk of loss. Make sure to insure your car with an appropriate and low cost car insurance policy. Many policies can be found online, or through discussions with your current insurance agent.
Know How to Sell
As with buying a classic car, there are no hard and fast rules for deciding when to sell one. You might unload it simply because you no longer have the interest or desire to keep it around. Or maybe you need the money. With similar models on the market, there will be a precedent for your car and its asking price. Do some research on these models and what they have sold for, taking into account the quality and condition of what you have. Once you have an asking price in mind, look into specialty dealers, individual buyers, or classic car auctions in your area.
Another option to look into is making a trade. If you love classic cars, but just want to a change or an upgrade, ask around.