When someone mentions having an investment portfolio, they are usually referring to stocks and bonds. But you can invest in anything. You’re taking a gamble that whatever you are investing in is going to go up in value after you acquire it. If you are extremely knowledgeable about a certain type of product, there is no reason you can’t parlay that for economical gain.
From baseball cards to racehorses to real estate, there are plenty of creative options for investing. If you are well versed in the trends in automobiles and how those attributes affect the vehicle’s value over time, you may be inclined to consider investing in collectible cars.
What is a Collectible Car?
There is no surefire way to know what make and model of automobiles are going to gain the most value. However, there are certain factors that seem prevalent in the comparison to which cars have shown the most increase in value over time.
If you are considering cars to invest in as collectibles, look for historical significance. Cars that employed new technologies tend to go up in value, as often do those with ties to the racing industry. This connection can be to a racecar designer, builder, or driver. Also consider the aesthetics – cars that look cool tend to go up in value.
According to the article “Investing in Collectible Cars: Top Tips and Risks” by CNBC journalist Joe D’Allegro, that can be found on the Investopedia.com website, prior celebrity ownership of a car can increase its value. This is especially true of cars owned by celebrities associated with cars such as Paul Newman or Steve McQueen.
Tracking the Market
Per D’Allegro, over the last decade, the market for collectible cars has fared better than the market for coins and stamps. In fact, it even outperformed the broad stock index. The collectible car market is tracked by the Historic Automobile Group International (HAGI), reporting a number of indexes. The HAGI Top Index provides an overall market measure for historical collectible cars.
There are, in fact, indexes for many specialties within the collectible car market. For example, the HAGI P Index measures the rare Porsche market and the HAGI F Index measures the rare Ferrari market.
According to Hannah Elliott’s Bloomberg.com article “The 10 Cars You’ll Want to Consider Investing in Next Year”, luxury new cars sales in 2020 slumped while sales of classic cars remained stable. For example, in 2020 the auction house Gooding & Co. clocked a $1.14 million price tag on a 1957 Mercedes-Benz 300SL Gullwing. This was a part of Gooding & Co.’s reported $9.2 million in sales for the total auction.
Elliott theorizes that the strong showing for classic car investing is related to people spending more time at home, which translates to more time shopping on the Internet.
Where to Buy
There are many options for finding collectible cars and negotiating their purchase. A small sample of online auction houses includes:
- Gooding & Co. offers Geared Online auctions All vehicles are housed in Southern California to allow for interested parties and their specialists to examine prior to bidding.
- ClassicCars.com is designed to bring buyers and sellers together in an online marketplace.
- AllCollectorCars.com offers tens of thousands of listings updated daily.
Don’t limit yourself. The more time you invest, the more likely you are to find the right car at the right price.
Depending on your resources, you could also employ an automotive broker. Brokers will first meet with a client to gain an understanding of exactly what they are looking for, and what their price range is. Then they set out to find it. Some brokers charge a flat fee, while other ask for a percentage of the purchase price.
If you do not like auctions but want to keep your search Internet-based, there are fixed-price dealers throughout the country that offer classic cars. Examples include:
- Skyway Classics describes itself as the nation’s premier classic, collector, and consignment dealer.
- CarsOnLine.com boasts as Internet’s most popular classic car website.
- Gateway Classic Cars bills itself as the largest classic and exotic car sales company in the world.
Getting Your Investment Home
If you are purchasing a car with the intent of having it go up in value, you are not going to want to drive it across country to get it home. To protect your investment, you will want to use a professional vehicle transportation company who specializes in transporting collector cars.
You should utilize carriers that are fully licensed and bonded. This is important when you are selecting a transportation specialty company to get your investment safely home. Shipping options available will include:
As that you are purchasing vehicles as collector’s items, you will most likely want to protect your investment with either a hard sided enclosed carrier or a Luxury/High End carrier. A hard sided enclosed carrier protects the vehicle from travel and weather conditions. High End/Luxury transport also includes:
- Utilization of wall and floor mounted brackets for a secure fit.
- Utilization of a hydraulic lift gate for loading and unloading.
- Utilization of air ride suspension to prevent “chucking.”
- Utilization of drip guards to prevent potential leaks.
Your shipment should include satellite tracking and insurance. Because you are shipping an investment, you may want to consider adding additional insurance coverage for total peace of mind. Supplemental insurance can be obtained through your existing auto insurance plan or through a third-party carrier.
Please be forewarned that any type of investment opportunity can include risks. You should always thoroughly research any kind of investment opportunity before committing any finances towards it.