Car as investment?

SP500 flat for the last 18 months.
DJ30 flat for the last 18 months.
NASDAQ flat for the last 18 months.

Bank savings and CDs paying less than 1% interest.

So - if you had $10,000 just laying around (yeah, right ...), would you buy a good condition "classic" and enjoy it while it appreciates in value? (I assume these appreciate more than 1% per year ...). Not a cheap flip - but an investment appreciating for 5 to 10 years.

I'm betting that for many of us, investing in real estate is pretty much out of the question. Who the heck has $250,000 sitting around. Or for that matter, who can afford another mortgage and $2000/month payments. eek

A classic car as a relatively sound long-term investment. Your thoughts?

NutmegCT said:

A classic car as a relatively sound long-term investment. Your thoughts?

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The collector car market is way too volatile to expect significant gains over the long run, especially for our LBCs. To get into the better returns...you need the funds to support a Shelby Cobra, Ferarri, etc....and those aren't guaranteed either. I watched a 1967 Shelby Cobra cross the auction block and sell at USD $1.1 million at Mecum Indy last Friday.

Stick with mutual funds, etc and ride the wave.

FWIW - YOMV - it's worked for me.

Unless you can get into the minds of future investors/collectors to see what they'll be buying for incalculable money. If so, be sure to share your thoughts here. :wink:

Just a thought - I think most folks *realistically* are not expecting incalculable money. More like "return on investment" better than one percent, on a small amount of savings not needed for five to ten years.

My hero:

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Gotcha.

But it's still a crapshoot. Anything can (and will!) happen.

You'll notice that your hero simply sat on his assets! At least that was his schtick...

The boomers that loved LBCs aren't going to be buying these things forever and sooner or later I think there's going to be a selloff with a glut in the market. Plus $10k isn't going to get you much of an "investment grade" car. If you're looking 5-10 yrs out, I might seek out a car guy in their late 40s-early 50s and ask what interests them. They'll have the money to spend in a few more years and those cars might still be reasonable to buy a good one. Maybe 944 Porsche? Just saw this one, be interesting to see where the price goes: https://bringatrailer.com/listing/1983-porsche-944-39000-original-miles/

I see cars as an expense. Yes I can probably get my initial investment out of the TR and VW but probably not expenses. And I have to do all the work. I still have to have 2 other cars that will be big losers. So as an investment my money would go in the market where I don't have to do anything but be patient and wait for compounded interest to accumulate.

I say that because I've got enough toys. More stuff means more maintenance and I want to use the stuff I've got not take care of more. But if I didn't have an LBC there is a black Morgan on eBay which I think would make an excellent long term investment.

Cars can be investments, even as "cash" assets that neither depreciate nor appreciate.

Inexpensive cars have a higher "load" (using mutual fund terminology) than expensive cars. Much of the ownership cost is fixed: Garage space, annual oil change, gasoline, time to do routine maintenance. (Granted, a Ferrari oil filter is more than a Triumph filter; same for insurance costs.) As a result, expensive cars have a higher ROI (assuming appreciation).

My opinions: 10-20k cars that I think are good investments today: Mercedes R107 (late model 560SEL seems to be taking off in value now); Porsche 944 and 928 (i.e. "lesser" models to the 911); BMW E36 M3 (again, the lesser to the E30 M3). 10-20k cars that are "cash" and will neither appreciate nor depreciate are LBCs, Model A Fords (been $15k for as long as I can remember), 1930-1960 American iron.

Your thoughts on good car investments?

P.S. Typically you can't take cross-country road trips with investment grade cars... (Although I am envious of your trip - and hope to do the same in the future!)

Almost anything as a collectible is a roll of the dice. I'll be happy to break even on my cars when the day comes. I also collect coins since I was a kid and have what is probably one of the most complete half dollar sets in existence from 1800 to present, including varieties. And yet I cannot say when the day comes I am gone that it will have been a good investment. Best way to look at any collectible is to emphasis the joy of the search and ownership of that little piece of history.

I like the Jay Leno technique of automotive investing.

Buy a car for $7,000.

Put $30,000 into it.

End up with a car worth $11,000.

Drive the snot out of it.

The best car investment you can make (if history is any indication) is to buy a car from me. I buy at or above market price, fix the issues and sort it out, then sell it on for market price or maybe a bit below. Just once I want to buy a car from myself...

drooartz said:

The best car investment you can make (if history is any indication) is to buy a car from me. I buy at or above market price, fix the issues and sort it out, then sell it on for market price or maybe a bit below. Just once I want to buy a car from myself...

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Boy I hear you there! I'm green with envy when I read "picked this up for free" or "neighbor gave it to me" or "flipped it and tripled the price". oy

That's me - Buy high & sell low.
I could lose money selling drugs.

Buy a 67 Jag E in 1980 for a few thousand and keep it for 100 years

The only chance I ever had of making money out of this lark of ours was when I was offered two series 3 E-Types in 1995 by a dealer who was shutting down (he was down to his own car - a Healey 100 which he was keeping - and the two E-Types) and he only had a couple of weeks to clear his premises. They both ran and looked(!) in good nick and he wanted £8k each for them which was £8k more than I had. The only reason I was there was because it was Christmas and he had resorted to selling Christmas trees to make ends meet.

Thanks gents. All *very* revealing. Never realized how many folks feel the same about this.

We own these because we like owning these. The "mobile money pit"!

We own these because we like owning these. The "mobile money pit"!

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just like a boat......on wheels.

A man's second happiest day - the day he buys a boat.

A man's happiest day? The day he can finally sell it.

But at times, you are rewarded for your efforts. PJ

Last weekend,
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You're always going to have people who try to beat the system by unconventional investments. There are people who purchase cars as investments though -- 60's muscle seems to be as close to a "blue chip" investment as you can get. These cars continue to have mythical proportions in America pop culture, it would be hard to say how long that bubble will last. And, let's not even talk about the Porsche 911. Seen those prices? It's fueling speculators who are pushing the prices completely beyond reality.

I guess a good predictor for 60's muscle over the next decade is watching the "Tri Five" Chevy market. These cars seemed to have dropped off the pop culture radar. I haven't priced one out recently.

I never regarded my Sprite as a financial investment. An investment in time and passion, yes. When a car becomes an "investment" the passion disappears. You focus more on protecting the investment than enjoying it. No, my Sprite is nowhere near perfect, but it is a heck of a lot of fun to drive, and I plan on driving the wheels off it.

To me, classic cars follow that adage:

Q: How do you make a small fortune in classic cars?
A: Start out with a large one.