Collecting and Investing in Classic Cars
A classic car is loosely defined as any car produced before 1948. At least that is the definition of the Classic Car Club of America (CCCA). But legally, United States law defines a classic car as a vehicle that is more than 15 years old, and has been restored to a condition approaching its original appearance.
For insurance purposes in the UK, a classic car falls into three categories:
Veteran Cars - manufactured before 1903.Vintage Cars - manufactured between 1903 and 1933.
Classics Cars - tend to be at least fifteen years old.
But no matter how you define a classic car, there is no denying that collecting and restoring these beauties is a very popular pastime worldwide. Once bitten by the classic car bug you might find yourself addicted to scouring the classifieds and on or off line auctions for everything from a classic American car to a fabulous British classic mini cooper.
As a hobby, collecting classic cars is certainly not cheap, with rare older models often selling for more than $1 million at auction. But there is an entirely different side to collecting classic cars -- the investment potential. While most classic car collectors love these older vehicles, and take great pride in restoring them to showroom condition, there is no denying they can also be an excellent investment.
Both classic car collectors and investment experts have taken notice of the fact that properly restored classic cars almost always increase in value over the years. With very few exceptions, a well-maintained classic car will appreciate in value between 15 and 20% per year on average. With such a respectable return on investment, owning a classic car has become much more than just an idle hobby for many baby boomers-- many now see collecting as a road to wealth. Some collectors will travel halfway around the world to purchase a single classic vehicle, and never actually drive the car.
But purist car collectors see this new trend toward classic cars as an investment as a type of blasphemy. They point out that these cars were made to be driven and enjoyed, and not hidden away in a climate controlled storage facility. One car collector explained it this way: "there is a big difference between a person who reads the Bible every day, and a person who collects rare Bibles to make a profit off of them."
The Bible analogy is appropriate in more ways than one. Collecting classic cars is something of a religion among purists, not just a hobby. And part of the charm and appeal of classic cars obviously comes from driving them. Sitting behind the wheel of one of these gems is a rush like no other. And the history and old world craftsmanship surrounding each classic car creates an atmosphere of its own.
But more often than not, even the most diehard classic car collectors consider the investment potential of vehicles before purchasing them. In fact, most collectors don't subscribe to either extreme -- investor or obsessed aficionado. Most enthusiasts will merge their love for these historic vehicles with a desire to make a nice profit from their classic car collection.
But generally, you should not invest in classic cars only for the sake of profit. Collectors who love the hobby of collecting these vehicles will always be better prepared and informed when considering buying or selling a car. Those who get into classic cars "just for the money" are unlikely to dedicate the amount of time and energy necessary to become expert classic car buyers or owners.
In other words, classic cars are not an investment to "dabble" in-- they are a way of life.
As a hobby, collecting classic cars is certainly not cheap, with rare older models often selling for more than $1 million at auction. But there is an entirely different side to collecting classic cars -- the investment potential. While most classic car collectors love these older vehicles, and take great pride in restoring them to showroom condition, there is no denying they can also be an excellent investment.
Both classic car collectors and investment experts have taken notice of the fact that properly restored classic cars almost always increase in value over the years. With very few exceptions, a well-maintained classic car will appreciate in value between 15 and 20% per year on average. With such a respectable return on investment, owning a classic car has become much more than just an idle hobby for many baby boomers-- many now see collecting as a road to wealth. Some collectors will travel halfway around the world to purchase a single classic vehicle, and never actually drive the car.
But purist car collectors see this new trend toward classic cars as an investment as a type of blasphemy. They point out that these cars were made to be driven and enjoyed, and not hidden away in a climate controlled storage facility. One car collector explained it this way: "there is a big difference between a person who reads the Bible every day, and a person who collects rare Bibles to make a profit off of them."
The Bible analogy is appropriate in more ways than one. Collecting classic cars is something of a religion among purists, not just a hobby. And part of the charm and appeal of classic cars obviously comes from driving them. Sitting behind the wheel of one of these gems is a rush like no other. And the history and old world craftsmanship surrounding each classic car creates an atmosphere of its own.
But more often than not, even the most diehard classic car collectors consider the investment potential of vehicles before purchasing them. In fact, most collectors don't subscribe to either extreme -- investor or obsessed aficionado. Most enthusiasts will merge their love for these historic vehicles with a desire to make a nice profit from their classic car collection.
But generally, you should not invest in classic cars only for the sake of profit. Collectors who love the hobby of collecting these vehicles will always be better prepared and informed when considering buying or selling a car. Those who get into classic cars "just for the money" are unlikely to dedicate the amount of time and energy necessary to become expert classic car buyers or owners.
In other words, classic cars are not an investment to "dabble" in-- they are a way of life.