Over the past years, classic cars are considered to be one of the best investments that can be made and are financially rewarding. Classic cars can increase its value rapidly, especially sports cars. There are different factors that can affect the value of the car, for instance, age, demand, scarcity, who has driven it and if it was presented during the championships.
In order to identify the potential for the investment and the value growth of the classic cars, it is highly recommended to pay attention at the “100-point system”, the “six categories of condition” or “blue chip” index. For instance, the “1000-point system” defines the state of the car: the “perfect condition’ have been rated at 100 and the “parts car condition” at 20 (Travis-Brown, 2018). Also, it is important to keep in mind that the maintenance fees of the car can be high depending on the value, state you bought it in and age. It is also good to consider how as an investor, you would be reselling the car, since auction houses can take 25% of the cost, making the deal with the private collector might be more profitable.
Expert Interview
– Good afternoon everyone! Today we are having Mr. Rousselot with us. He works in the car industry in Switzerland. And he would be sharing with us his knowledge and experience. Thank you very much for coming, Mr. Rousselot.
– Hello everybody! Thank you, Katia.
– First question is: what defines a classic car?
– Classic car is usually a car, which has been made 20-25 years ago. Especially in Switzerland classic car mist have been build 25 years ago to be considered as a classic car.
– Would you say that classic or collectible car is a good investment?
– Yes, classic cars are a really good investment, because, for instance, like a painting, people love them, want to buy them and they were dreaming about them, when they were kids and now they can have them. It is a really good investment, because all the people want to have a classic car that is really good-looking.
– Could you give a few examples of classic cars that can be a good investment nowadays?
– Nowadays, from the American brands you can have like Shelby Cobra, Shelby GT350. As more affordable cars you can have Ferrari from the 80’s, this can be more or less a collectible car.
– Are classic cars a better investment than the modern cars?
– Yes. In the modern cars you have some limited editions, but classic cars are a better investment as in 10-20 years everyone wants them. So it is really a better investment.
– Could you please give an example of a modern car that can actually be a good investment?
– Modern car that could be a good investment are, for example, Mclaren Senna GTR, Ferrari Sp1, Ferrari Sp2.
– Ok, thank you very much! And how much return can you make out of a classic car?
– It is quite hard to say, because it takes quite a long time to get a return on investment for a classic car. But there are two types of classic cars: racing and road. For instance, for the racing car it depends on the championship, which car gets released every year. So, if new championship comes, in which one car can drive in, the price is a lot. But for the road one it depends. The classic cars are a really good thing!
– Would you say it is fast to make ROI or you have to wait a long time?
– As I said before, it can be quite fast for racing cars, but for the road cars it can take quite a long time (5-10 years). But it is better to drive a classic car, then to see a painting on the wall in the house.
– Definitely! And once you get a car that can be an investment, would you say that it is expensive to maintain it?
– It is not really expensive to maintain. If you want to drive, it can be quite expensive, because it is not like a modern car, where you have spare parts everywhere. Classic cars you have to rebuild them, which can cost you a lot of money. But they are like the planes, the more you drive them – the less they cost.
– What are the common places, where you can see and buy classic cars? Would you say that there are exhibitions or there are special garages for this?
– There are special garages for that, like mine. Actually, the best ways to see and buy classic cars are exhibitions, old cars racing meetings. You can see a lot of them, take some pleasure and find the right one.
– Great! Thank you very much for sharing your knowledge with us and we will let you know if the viewers of the video and of the website will have any questions. Thank you for your time and participation!
-Thank you!
Classic cars market continues to thrive. The value of the classic cars keeps increasing and people buy them as they have dreamt about them since their childhood. However, investors don’t have to only buy classic cars as an investment. Classic car can be driven and enjoyed, while the person owns it. Also, as more the classic car is driven the less would be the maintenance expenses.
I hope you have enjoyed reading this blog as well as watching the interview and I am looking forward to further discussing this topic with you below in the comments.
Travis-Brown, D. (2018). Classic Car Valuation: How Does It Work? Retrieved May 20, 2020, from https://www.webuyanycar.com/car-magazine/classic-car-valuation-how-does-it-work/
Peter Vardy (n.d.) Whoever said never mix business with pleasure was clearly mistaken. Retrieved May 22, 2020, from https://www.petervardy.com/heritage/investments
Vicci Auctions. (n.d). 19 Classic Cars With The Best Investment Potential. Retrieved May 21, 2020, from https://www.viccicarauctions.com/blog-detail/19-classic-cars-with-the-best-investment-potential
Great! 25-30 year old cars can make a profit of 10-15% a profit per year!
Indeed, it is great and sometimes the profit can be even more.
Interesting topic for discussion.
Everyone loves cars – both women and men. Of course, I agree that classic or limited cars can quickly increase their value, due to their rarity and collecting. Do not forget that in the 21st century the development of the automotive industry is proceeding rapidly, due to which the collection fund of cars is also replenished. And who is not ready to believe in the right investment, advice – go to Cuba. More than half of Cuba’s fleet was produced in the United States in the early 50s. Today, Cuba is the only place in the world where such a huge amount of such beautiful automotive equipment has been preserved. As a result, Cuba now is a unique open-air retro car museum on a national scale.
Cuba is definitely a great place, where you can appreciate classic cars! I highly recommend everyone to go there.
Well done, Catherine. Collectible cars are superinvestment. For a real car enthusiast, this is not only a hobby, it is a masterpiece!
Vlad, thanks for your feedback! I agree with you. Most of the people that invest in them are real car enthusiasts.
In your opinion, will the classic cars market be saturated due to the current economic hiccup that we are/will be facing?
Hello Kate, I don’t think that market would be fluctuated for the classic cars. Even if it would happen, I am pretty sure that it would be adjusted quite fast.
I agree with the interviewee that it is better to drive a classic car than look at the painting))
But another question is if you can really drive them if you invest in them – in terms of engine run and amortization 🧐
Elvira, thank you for your questions. For the engine I believe it is better when the car is constantly being used as Mr. Rousselot has mentioned.
Classics are a great investment!
Jack, I completely agree with you!
Classic cars are my favorite kind of cars! Interesting topic, thank you !