Are Classic Cars Good Investments or Money Pits?
Owning a classic car is a dream for many adults. Whether you appreciate the beauty and aesthetic of a 1930s Talbot-Lago (“Teardrop” car), the daring style innovations of the 1950s, the roar of a late ’60s muscle car, or the pimpin’ style and roomy accommodations of a ’70s Caddy, you might be keen to find, fix, and drive a classic car, or even start a collection. But before you start sinking dough into an automobile of yesteryear, you might want to stop and consider whether or not it’s a good investment. A classic car is not cheap, especially if you’re looking to go all-original with your refurbishments and return it to mint condition (or actually purchase a car that already meets these criteria). And it can turn into a real money pit if you don’t carefully consider just what you’re getting into, and why.
For many people, buying and fixing classic cars is something of a labor of love. They do it not for the chance to acquire a valuable asset, but for the personal pride and enjoyment that come from the process of refurbishing, as well as bragging rights at car conventions. They do it for the stares they get when they roll down the street in a fully restored, classic set of wheels. And sometimes they do it to join a community of like-minded car lovers (a car club). Even if you happen to be in it for the money, the truth is that you may not do very well if you don’t have an ongoing love affair with the history and culture of cars.
Like any type of investment, knowledge is the key to success. So the more you know, the better you’re likely to do when it comes to choosing the investment options that are the most likely to gain value and pay off big down the line (although you could also hire a trusted expert to help you out). And when it comes to cars, there are a lot of variables to consider. For example, finding a mint condition Shelby Cobra for sale from a buyer who doesn’t know what it’s worth is almost sure to pay off since this particular automobile is extremely sought after. But picking up a busted, rusted old car and restoring it just because it’s antique may not offer the same return. You need to consider not only the condition of the car, but also the make, model, and year. These factors could not only determine how much you sink into repairs and refurbishment, but also how difficult it is to find replacement parts.
And of course, the rarer the car is the more it’s likely to cost all around. Unfortunately, this might not necessarily equate to dollar signs when you sell. Just because a car is rare doesn’t mean it’s valuable since a hefty sale hinges on interested buyers. You can drop a lot of dough into fixing up an old Edsel, but this notorious failure of a Ford isn’t likely to net you the same numbers at auction as some of its space age contemporaries, just for example. And don’t forget that you also have the costs of transporting and insuring classic cars, all of which you need to factor in when considering long-term ownership and ultimate return on investment.
The point is that classic cars might not be the best investment option out there, especially if you’re not particularly interested in automobilia. If, however, you are absolutely enamored with everything automotive, then your passion for classics could make this type of investment not only worthwhile, but also highly lucrative.