Investing in Classic Cars

Business - December 15th, 2006
Magellan Japan

Provided by MAGELLAN:
Tel. 03-3769-5511

What makes a classic car?
Some combination of style, innovation, pedigree, racing heritage, desirability, and practicality. That list is neither exclusive nor indeed exhaustive.

How old does a classic have to be?
Purists may argue but probably a minimum of 25 years. The naming and classification of age ranges is much argued over and many enthusiasts have spent much time and energy engaged in such debates.

What do I need to be aware of?
Whatever your choice, a classic car will demand a little more of you as an owner. Restoration and rebuilds aside (you’ll need serious time, money, and expertise for that) to fully appreciate the older car you’ll need to be comfortable in an environment that may be more mechanical than you’re used to.

Should I buy a classic car as an investment?
Some people do. All you need to do is get the make, model, condition, and timing right and you could do very well. Four points to think about, however. First, if you’re buying a “classic” car as an investment you’ll need to be sure that there are potential buyers out there who share your view. Second, one of the reasons for buying a classic car is to be different. You’ll get more value from your investment if you buy something that you like to drive. Third, there are definitely more secure ways of investing your money than in a heap of metal 25 years old, though they may not be as much fun. And finally, the only way to guarantee making a small fortune from a classic car investment is to start with a large one.

How much should I pay?
Nothing at all, that is at least until you’ve done some basic research around the many auction sites, classified ads, car magazine sites, and enthusiasts sites that abound on the Net. Time spent browsing could save you from an expensive disaster. Also bear in mind that prices will vary according to the condition of the car. As a rough guide, a car described as in good condition should be on the excellent side of good. Average condition means the car may need some minor work. Poor means that it’s probably a runner but may need major work. Concourse means the car is in pristine condition and can be entered into the type of competition where a team of expert judges goes over the car looking for changes to the original specification and specks of dust where they shouldn’t be.

The use of enthusiasts
Almost every car that has ever been launched has its dedicated band of enthusiasts with useful hints and tips available from the Web. The dedication of the contributors is truly awe-inspiring. Detail of this sort is a fantastic resource for anyone thinking of taking the plunge and buying a classic. It will also help you through the minefield of which version of the classic to go for and what pitfalls there might be.