Investment Cars - A Different Kind of Investing

By Eric Hammer

One of the more unusual ways to make money these days is through investment cars. While these things may seem to be the exclusive province of the super rich, the fact is that even upper middle class Americans are able to purchase investment cars (i.e. classic cars which have a chance of going up in value) and make some decent money while doing so.

The key, according to the experts is to have an eye for such vehicles and to know which cars are likely to increase in value as time goes on. It also pays to have enough room to house such vehicles and to be able to maintain them as you need to keep your investment cars in as pristine a condition as possible in order to sell them later on for a profit.

Finally, remember that this is unlikely to become a full time profession unless you happen to run a used car lot, in which case you are not just working with investment cars. However, it is potentially a good way to make some money and have fun while doing so.

How Much Can You Make?

It's impossible to quantify how much you are likely to make from investment cars since so much depends on the fickleness of the buyers who may purchase the vehicle from you in the future. However, it is not uncommon to double or even triple your money inside of 10-15 years if you do your job correctly and buy the right kinds of collectible cars.

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According to the experts, there are a number of factors to consider when buying investment cars. First, you need to consider whether the car has bottomed out as far as losing value. Typically, new cars lose around 20% of their value for every year they are on the road. However, after a certain point, if they are still in good condition, with relatively low mileage, they start to go up in value, especially if they are collectible.

Good choices for investment cars include cars that were once expensive to begin with, such as a Rolls Royce or a Ferrari. They should also be desirable types of cars and considered "cool looking."

As an example, amongst modern vehicles, a car which has the potential to become a collectible 10-15 years from now is the Tesla Roadster, which was released in limited quantity and which is being phased out by that company in favor of their new sedan.

The reason that the Roadster has potential (and this is just an educated guess - no one can guarantee that the Roadster won't be considered a worthless turd 15 years from now) is because it is considered to be a sleek vehicle, which was originally quite expensive and which was released in limited quantities. All of these things are likely to make such vehicles more attractive to classic car collectors 15-20 years from now.

On the down side, the odds are good that in the next 15-20 years, electric vehicles which actually get 300 miles to a charge and which can be charged much more quickly than the Roadster will likely be on the road, meaning that the market for the vehicle could go down.
Bottom line, investment cars can be fun and they can be a great investment, however, there are no guarantees that your investment vehicle will go up in value, nor are there guarantees that it won't lose value.

However, you can increase your odds by paying close attention to the market, to see which vehicles are popular with collectors and have stood the test of time (the 1999 Hyundai Accent that's being offered $1,000 for example is probably a bad choice, since investment cars are usually ones that are considered "cool").

You should also be sure to store your investment cars in a covered garage and keep them in pristine, original condition. If the vehicle is ever involved in an accident of some kind, your car will be worth less for insurance purposes than it might have been worth if you'd held onto it for an investor. Not to mention that most people who buy classic cars want cars with relatively low mileage. A classic Ferrari with 250,000 miles on the Odometer is not going to be worth nearly as much as a classic BMW with 5,000 miles on the Odometer, even though the Ferrari is ostensibly a more desirable vehicle.

Qualifications / Requirements

The only requirement here is that you have an eye for classic cars which would make good investment cars and that you have the money and space to care for your vehicles while you wait for them to appreciate in value. It's also a good idea to have at least some automotive knowledge so that you can understand what's going on when you take the vehicle to an expert for an evaluation.

First Steps

Start by researching possible investment cars and coming up with a budget for your investments so that you know exactly how much money you have available. Then, be sure to shop around, bargain with owners and take the time to have cars inspected by a professional who knows what to look for in a vehicle.


Check out these helpful resources to learn more about investment cars:

Car Info Weekly: Investing in Classic Cars - This blog in general is a good resource for more information about investment cars and this article in particular gives you a good overview of the market for such vehicles.

The Discriminating Explorer: Classic Car Investing Tips - Another good resource on investment cars, this article provides an excellent overview of what to look for in order to find a car which will likely go up in value.

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