With investors burned from the GFC and the global slump in real estate new and novel investments are appearing. Bone china, art, race horses have always occupied the margins of investing, but now they are being challenged by a newcomer: Classic Car Investments.

The attraction is self-evident: Classic cars are rare commodities and becoming rarer with the passage of time. Their rarity is coupled with nostalgia of the time in which they live, and often they are breathtakingly beautiful objects.

My friend, James, is the proud owner of a 1972 fire-truck red Jensen Healy. It has a herringbone stamped floor and the constructors name imprinted in the chassis. It is beautiful. And for love or money James would die before parting with it. But that doesn’t stop him perusing the Classic Cars Investment website to see what else is out there.

James has a lot of experience with the classic cars market. Here is his advice:

  1.    Do your homework. It’s easy to be carried away with the emotions attached to ownership. Beautiful objects confer positive feelings; and all too often those feelings drive the purchase rather than common sense. Know what you are looking for and why and invest with your head, not your heart.
  2.     Are you a sitter or a driver? Some cars are like rare bottles of wine and need to be left to mature. Any driving will only further deteriorate the car. Often there are no replacement parts. Even manufacturing your own parts detract from the whole of the original vehicle.
  3.     Remember you are not just buying the car – you are also buying its upkeep. “And this,” says James, “is vital.” Will you have to pay to store the car? Does it require specialized servicing and/ or parts? Does the car require insurance or licensing? “It is a very long list,” James continues, “don’t be caught unawares.
  4.      Do you require a license? If you regularly buy and sell classic cars then it may be deemed your occupation. In this case you will be required to register as an investor. The rules governing classic cars investments vary from state to state, so be warned.

James’s love of classic cars exceeds his ownership of his Jensen Healy. He regularly peruses the Classic Cars Investments website looking for deals. “My education,” he tells me, “began with this website. I Just looked at the cars, read about them, talked to community around the cars, and eventually a picture of the market emerged. “It’s fun, it’s rewarding, and it can be lucrative.”

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