Euro Motorworks

Is an automobile a good investment? For years buying and collecting luxury autos and classic cars was looked upon as a frivolous activity for the rich or as strictly the domain of gear heads and wrench turners. Most investors thought of car collecting as a waste of money and time.

Oh how times have changed.

If you hear someone giggling in the background it could be that gear head we mentioned earlier. Why is he or she laughing? It’s simple, with the stock market in open free fall and retirement funds going belly up every day that collector car purchase made in 1970 is suddenly worth much more than the experts’ stock portfolios and 401K plans. And the good news is it’s not too late to do enter into some four-wheeled investing of your own.

To put it simply classic cars have held their value better than anyone ever dreamed. That Chevy Camaro that was purchased for $7,200 in 1968 could be worth more than $100,000 dollars at one of today’s high profile collector car auctions. Rare cars like Plymouth Superbirds and Ford Talladegas can fetch prices in excess of a half-million dollars. Rare European cars like 1950’s era Mercedes and Jaguars often see prices topping a million-dollars when they’re sold.

Granted, the best way to invest in collectible cars probably isn’t to mortgage the farm and buy a 1956 Mercedes coup, but it is still easy to find quality, investment grade automobiles. Many new collectors choose to find a car that is suitable for rebuilding for their first foray into the field. Not only is this a way to see a high profit margin on a purchased car but also many find the restoration process to be a fun and challenging hobby. The key to this is to find a car that can be restored for a manageable amount of money and would then be a sellable car. Late 1960’s model Chevy Camaros, Ford Mustangs, and other American muscle cars fall into this category. Not only are there ample parts for these makes there is also a ready group of potential buyers for the completed car. Due to the increased popularity of car collecting there are also many possible avenues through which to sell the car including the internet, car shows, and the large televised auctions for high quality, high dollar pieces.

For individuals that don’t want to be hands on and restore a car there is always the tried and true method of speculating on which cars are about to increase in value. Even in a down economy the original ‘big three’ American car makers still offer limited edition and collector’s editions on a yearly basis. Many people don’t know this because it is not something the automakers publicize a great deal. By keeping the news quiet and production runs low manufacturers create investment grade vehicles for the savvy buyer. However, just because a car is a collector’s edition doesn’t mean it will go up in value. Dodge Vipers and Plymouth Prowlers were high dollar machines when they were new and it was thought low production numbers would make the car’s values skyrocket. Instead the public didn’t warm to the odd looking Prowler and it became a major mistake for the Chrysler Corporation. Chances are if a car doesn’t look like something someone would want to drive it’s probably not a wise investment.

Before you try your hand at collecting, educate yourself and set a budget. Luxury auto repair and classic car maintenance won’t be cheap. And remember no investment is guaranteed to make money. Even if it doesn’t make you rich buying and having your dream car can be a lot more fun, and a lot less stressful, than watching your stock portfolio go into the tank.