Why Investing in Cars is a Smart Hedge Against Inflation
If you told your financial advisor that you were considering investing in classic cars, you might be surprised at his reaction. Once considered a simple hobby, the buying and selling of classic vintage automobiles can now be an astute investment for the savvy collector. Consider the following:
You can collect wine. But over the last 10 years, classic cars have outperformed wines as an investment. And you canʼt bottle any more 1950s Ferraris.
You can assemble large quantities of stamps or coins. Classic cars appreciated more than these items over the last decade. And they are a lot simpler to track as an investment than thousands of smaller items.
Perhaps you love art and wonder about its investment potential. The average collectible auto has appreciated more than a piece of fine art in the last 10 years. And the painter whose work you cherish could be actively creating many more paintings during his lifetime.
What about gold? Gold as an investment has gained more value over the last 20 years, but gold collectibles still trail classic cars over the last 10. And you canʼt mine any more Chevy Corvairs.
In 2013 alone, an index that tracks the value of classic cars rose 39%. Classic cars have been a very good performer ever since the financial crisis of 2008 sparked interest in them. Recognized as an art form, they have the added advantage of being a limited production, hard asset.
Noted celebrity car collector Jay Leno has one of the largest private car collections in the world. When he talks about a particular model, it seems that demand rises on his word alone. Lenoʼs advice? Simple -- get started! While itʼs nice to find a spotless, mint condition vehicle, even a wreck on the verge of being un-restorable can have value.
Following trends is important. While the investment potential varies from model to model, year to year, and with condition, experts are noting some recent tendencies. The more expensive the car, the more it may appreciate. As a category, the value of Japanese classic cars has boomed in recent years.
Wayne Carini, Host of the TV show “Chasing Classic Cars”, suggests focusing on quality, not quantity, to ensure the best return for your money. Classic cars have been steadily increasing in value, he notes.
Experts also feel that classic cars are more “bubble-proof.” Cars are hard assets, with limited quantities. Moreover, itʼs an all cash market, so itʼs unlikely to suffer a liquidity or financing crisis. No subprime mortgage or Robo-signing calamities here.
Besides, how many investments are also fun to own and operate? Classic cars are the classic win-win!
Hemmings Daily, “Are you smarter about cars than the Wall Street Journal?” -- http:// blog.hemmings.com/index.php/2012/06/12/are-you-smarter-about-cars-than-the-wall- street-journal/
Los Angeles times, “Car collectors fuel rapidly rising value of Japanese classics.” (May 28, 2014) http://touch.latimes.com/#section/-1/article/p2p-80292037/
Popular Mechanics, “Jay Lenoʼs tips for collecting classic cars.” -- http:// www.popularmechanics.com/cars/jay-leno/4218200
New Your Times, “An investment? Wheels may just be an expensive hobby.” (June 8, 2012) -- http://www.nytimes.com/2012/06/09/your-money/classic-cars-can-be- investments-or-money-pits.html?_r=0
The Daily Ticker, “classic cars the best alternative investments of all.” -- http:// finance.yahoo.com/blogs/daily-ticker/classic-cars-best-alternative- investment-163501671.html
“Classic cars as investments.” -- http://www.rkmotorscharlotte.com/sales/investing