Collectible Cars As An Investment
When people refer to an investment portfolio they usually mean stocks and bonds. You can invest in any asset. It's a risk that the investment you make will increase in value once it is acquired. You don't have to be an expert on a particular product type in order to make economic gains.
There are many creative investment options, from baseball cards to racehorses and real estate. You might be interested in investing in collectible cars if you're familiar with the latest trends in automobiles.
What is a Collectible Car and How Does It Work?
There is no way to predict which make or model of automobiles will gain the greatest value. There are certain elements that can be used to compare which cars have seen the greatest value increase over time.
Monitoring the Market
According to D'Allegro over the past decade, the market in collectible cars has performed better than that for coins and stamps. It even outperformed the broad stock market index. The Historic Automobile Group International (HAGI) tracks the collectible car market and reports a variety of indexes. The HAGI Top Indice provides an overall measure of the market for historic collectible cars.
In fact, there are indexes that measure the specialties of the collectible car market. The HAGI P index measures rare Porsche markets, while the HAGI F index measures rare Ferrari markets.
Hannah Elliott's Bloomberg.com article, "The 10 Cars That You'll Want To Consider Investing In Next Year", states that while luxury cars sales declined in 2020, classic car sales remained steady. A 1957 Mercedes-Benz 300SL Gullwing was sold by Gooding & Co. for $1.14 million in 2020. This was part of the reported $9.2million in total sales at Gooding & Co.
Elliott believes that the strong showing in classic car investing may be due to people spending more time at their homes, which means more time online shopping.
Where to buy
There are many ways to find collectible cars and negotiate their purchase. Here are some examples of online auction houses:
- Gooding & Co. offers Geared Online Auctions. All vehicles are stored in Southern California so that interested parties and their experts can inspect them before bidding.
- ClassicCars.com was created to connect buyers and sellers in an online marketplace.
- AllCollectorCars.com has tens of thousands more listings that are updated every day.
Don't limit yourself. Spend more time and you will be more likely to find the perfect car for you at the right price.
You could also hire an automotive broker depending on your financial resources. To get to know the client and their budget, brokers will meet with them. They then set about finding it. Some brokers charge flat fees, while others ask for a percentage.
Look for historical significance when you're looking at cars to buy as collectibles. As cars that use new technology tend to increase in value, so do those that have ties to racing. This could be a connection to a racecar builder, designer, or driver. You should also consider the appearance of your car. Cars that look good tend to be more valuable.
According to Joe D'Allegro's article, "Investing in Collectible Automobiles: Top Tips and Risks", which can be found at Investopedia.com, celebrity ownership can help increase a car's value. This is particularly true for cars that were owned by celebrities such as Paul Newman and Steve McQueen.
There are many fixed-price classic car dealers in the country, if you don't like auctions and prefer to keep your search online. Examples include:
- Skyway Classics is the nation's leading collector, consignment, and classic dealer.
- CarsOnLine.com is the most visited website for classic cars on the Internet.
Gateway Classic Cars claim to be the largest company selling exotic and classic cars in the world.
How to Get Your Investment Home
You don't want to drive your car across the country if you intend to increase its value. You will need to hire a professional vehicle transport company that specializes in transporting collectible cars. This will protect your investment.
Carriers that are licensed and bonded should be used. This is crucial when choosing a transport specialty company to safely return your investment. There are many shipping options:
- Open Air
- Enclosed Transportation
- Door to Door
- Luxury and Exotic are the high-end options.
You will want to protect your investment as you may be purchasing vehicles as collector's pieces. Protect your vehicle from weather and travel with a hard-sided enclosed carrier This includes:
- Use wall- and floor-mounted brackets to ensure a secure fit
- Use a hydraulic lift gate to load and unload.
- Air ride suspension is used to prevent "chucking."
- Use drip guards to stop potential leaks
Satellite tracking and insurance should be included with your shipment. You may wish to add additional insurance coverage because you are shipping an investment. You can either purchase additional insurance through your auto insurance or through a third-party carrier.
Be aware that every investment opportunity comes with risks. Before you commit any money to any type of investment opportunity, it is important that you thoroughly research it.