With the price of classic and rare cars rising over the last 30 years, are they really a good alternative investment for your cash?
Should you buy them with the hope that they’ll increase in value or should they remain just a ‘passion’ hobby?
Let’s take a closer look at some of the highest selling classic cars and the possibility of investing in these cars…
The three highest selling classic cars
1962 Ferrari 250 GTO Berlinetta
1962 Ferrari 250 GTO Berlinetta netted a huge $38.1 million at auction. With less than 40 of this model available, it broke records at Bonhams in California. This specific car was rebuilt after former French Olympic skiing champion Henri Oreiller died racing it at the Montlhery autodrome in 1962.
1954 Mercedes Benz W196
This sold for $29.6 million in the UK last year at Bonhams. Juan Manuel Fangio, an acclaimed Formula 1 driver, was once drove this rare model.
1967 Ferrari 275 GYB/4 NART Spider
The 1967 Ferrari 275 GYB/4 NART Spider fetched $27.5 million at auction and is one of only ten Ferrari ever made. Lawrence Stroll, the man behind much of Tommy Hilfiger’s success, bought it.
What you need to know about classic cars as an alternative investment
Investing in classic cars is expensive. Furthermore, it isn’t like investing in shares, where you may receive dividend payments. Owning a classic car doesn’t give you anything in return. And the probability of you paying a decent amount over the years to keep the car in pristine condition is high. Thus, you should keep these few things in mind if you’re thinking about investing in classic cars. According to Karl Brauer,
- If you buy a classic car that you start to feel you can’t afford to maintain, consider cutting your losses. Chances are it won’t be profitable.
- If you find a classic car you want to buy, ensure it is thoroughly inspected by a professional before parting with a cent. You have to make sure that the car doesn’t require any major work.
- If you don’t have the money and time to spend on a classic car, leave it. Don’t borrow.
- If you’re buying a classic car as an investment, then keep it as an investment. Don’t drive it.
- Owning a classic car that’s in demand, you’ll have to think about when you sell it, because that will determine the price. Like all markets, the price will flactuate.