24 Sep Are Classic Vehicles a Good Investment?
People buy a classic car for many reasons – perhaps because it’s something they remember from their younger days, or perhaps because of the low tax and insurance costs. But can they ever be a good investment?
Over the last 30 years, the values of classic cars have been on the rise. Rare cars can cost millions of pounds, but for those of us of more modest means, is an investment in a classic car a viable way of boosting our pensions?
Car vs Bank
With interest rates currently at all-time lows, any money you have sitting in a savings account won’t be making much of a return. Use it to buy a classic car, however, and it’s likely to increase in value. Of course, there are ongoing costs of maintaining it, but when you come to sell there’s no liability for capital gains tax. Don’t be tempted to buy and sell for a quick profit, though, or HMRC might think you’re a trader.
The Right Choice
When considering buying a classic car as an investment, it’s important to make the right choice. Some cars are likely to hold their values better than others. Open-top roadsters such as MGs and Triumphs are usually safe bets, as are perennially popular choices like VW camper buses or Jaguar saloons.
You do need to properly research your purchase – make sure you’re buying something on which the depreciation has bottomed out and the value is starting to rise again. Don’t simply buy a cheap old car from a used car lot, and don’t buy a modern car and hang on to it in the hope of it becoming a classic.
Looking After It
If you’re buying a car for investment, you do need to ensure it’s kept well maintained. There are specialists for most marques, for VW campers, for example, who can help you keep your vehicle in good condition.
Cars were built to be driven, and just because it’s an investment it doesn’t mean that you can’t enjoy it. In fact, it will deteriorate less if it’s used than if it’s left sitting in a garage. The advantage of a classic car is that it’s an asset you can have fun with, and that isn’t something you can say about money in the bank.