Published on September 18th, 2021 | by Daniel Sherman Fernandez0
Is It A Good Idea To Invest Your Retirement Money In A Classic Car?
Have classic car values today hit its possible highest due to the pandemic or not?
In the last two years or so we have seen the value of many classic cars move upwards faster than ever before. But what is a ‘classic car’? Is your Mercedes W126 S-Class a classic car? Is your Mazda RX-7 Savanna a classic car? Is your air –cooled Volkswagen Beetle a classic car? Is your Datsun 120Y a classic car?
Well, we are not going to question anyone’s definition in this article, we are only going to share what we believe to be a classic car in our humble opinion.
First, it has to be more than 25 years old. Next, it must be a car in short supply, not a mass produced car that is easily found. It must be a car that has high desire value. It must in it own way be a beautiful looking car.
Let us share a few examples of what we believe to be a classic car. The Ferrari Dino sits at the top of the list. Followed by a air-cooled 1960’s Porsche 911 and the Mercedes Pagoda and most of its siblings from the same era, then comes the Volkswagen Karmann Ghia and the BMW 2002TTi.
From Japan we must start with the Toyota 2000 GT made famous by 007 followed by the early Skyline 2000 GT-R Hakasuka followed by the Toyota Celica 1600 ST and let us not forget the sexy Datsun Fairlady 240Z.
Yes, in between we have not mentioned a dozen or so other highly collectable (and super expensive) classic cars as the above are the cars we want to have in our ‘dream garage’.
Now this article is not for listing classic cars but instead to share the idea of using part of your retirement money to ‘invest’ in a classic car that you can drive, enjoy, show-off and sell at a later date for a profit.
In the 1960s, you could not give these cars away. However, they are now real collector’s pieces. Even if you have to spend money on fixing up your initial purchase, investing in a classic car is not such a bad idea.
The Future Classic
What is a future classic? It is hard to look at modern cars and figure out what model is going to turn out to be a classic. The good news is that you don’t have to invest in a Porsche or Ferrari or even a post war Mercedes-Benz to get a return on your investment.
According to car enthusiasts, cars such as VW Golfs are set to become collector’s items in the future. The smart thing is to set yourself a budget. How much are you happy to spend and can you do the restoration work yourself?
If you can do a lot of the restoration work yourself, you can be more adventurous. Otherwise, you need to factor in restoration costs. However, whatever you decide to do, make sure you have your finances in order first. If you’re planning on making this purchase during your retirement years, make sure to set up a retirement account which will allow you to easily monitor your spending’s.
Buying From Abroad
When you are thinking about investing in a classic car to boost your retirement account, buying a car from overseas is one of your options. Of course, Great Britain is well known for its many classic cars. The downside is that investing in classic cars has been popular in the UK for a long time. More than one savvy British investor has over the years built up a classic car collection.
One place to look if you would like to invest in British cars is the United States. Many British cars were sold in California during the 1960s and 1970s. As salt is not used on the roads in California, the cars are better preserved and require less work. The initial purchase price is often lower as well. Although Americans collect classic British cars, they are fonder of spending their cash on classic American cars.
What Would We Buy Today?
Well if we were looking at investing some money in a classic car, we would start with an Alfa GT Junior. There are still some unloved cars collecting dust. (like this unit pictured below)
Then we will look for a Mercedes-Benz W108 sitting in some retired tin miner’s grandsons house.
Next will be the forgotten BMW E12 (which is a rust bucket like the Alfa) and if the price is right a Toyota Celica GT 1600.