12 Future Investment Classics and Why You Should Avoid Them

Posted on May 5, 2017 in Antique | Comments Off on 12 Future Investment Classics and Why You Should Avoid Them

Investing in classic cars has never been more appealing or popular than it is today. Investment gurus across the nation are spinning stories of amazing returns and massive gains that can be had simply by purchasing a used car. What they forget to mention, is that investing in classic cars can be a hell from which you never return.

Jaguar XJS – Undervalued for years, this car is the ultimate Grand Tourer. Beautiful, quick, classy and rare are qualities that guarantee it will be an appreciating classic. Though the market is currently soft, I can see this becoming the next E-Type, with a strong return over the next 10 years. Look for the rare coupe version, the later Series III, the V12 and the special editions (TWR, XJR-S, Celebration-Le Mans, and XJ-SC) for the best return.

After the economic collapse, many middle class families have been saving money, adding to their 401k, and paying down their debt like never before. These families have grown fearful of the stock market and unimpressed with the miserly returns being offered by banks. More and more they are turning to “experts” who advise them to invest in recession proof commodities like gold, fine art, vintage wine, and even classic cars. While very few of these families have the nerve and resources to dive into the fine art and vintage wine markets, they usually don’t think twice about classic cars. Today, I am listing cars that I think would be a good investment for the future, as well as why you should avoid them.

Dodge Magnum SRT8 – These are rare, fast and cool. With 425 horses and a production figure of only 3837, they are sure to be a future collectable. Look for later model years, especially 2008 and 2009, and always go for the Mafia hit man colors: Dk Blue, gray and black.

The market for many classic cars has increased tremendously, averaging a 16% return compared to the Dow Jones 4%. While stories about people purchasing a Ferrari 250 GTO for $800,000 ten years ago, and reselling it in 2012 for 30 million are true, they are unbelievably rare. The market is good for some cars, and investment grade historic cars can return 300-500% on rare occasions, but the amount of money and knowledge needed to participate in those markets is overwhelming. For most of us here on earth, the average classic car is not a good way to invest unless you are very careful.

Alfa Romeo GTV6 – Low production numbers and a beautiful Italian body make this car worthy of investment. Prices have gone up dramatically, but you can still find one for small change. Look for the Balocco and the Maratona editions for extra value.

The classic car market is as volatile as Mel Gibson at a traffic stop. Cars like the Maserati Ghibli that once commanded $300,000.00, are now selling for $75,000.00. A Jaguar E-Type once was valued at $150,000.00 can now easily be purchased for $50,000.00. On average, many classic cars perform well as investments, but you have to be an expert to purchase a real winner. Once you make the leap, you then have to worry about maintenance, housing, restoration, and a slew of other issues that will arise. Yes, in many cases the investment will perform better than blue chip stock, but 100 shares of GE will never catch fire and torch your house.

Triumph TR4 – Beautiful styling on a car that is easy to work on in your own garage. This is the perfect car for the first time collector looking to get his hands dirty. Better and more rare than a MGB. Prices are rising on this one, so find the best example possible (no rust) and buy it quick.

I recommend buying into the market only if you are a true gearhead. If you purchase the item for love, and not money, the outcome will be easier to accept, good or bad. Buy a car that not only a good investment, but one you can have fun with. Classic cars are meant to be driven, not shoved away in a closet for 20 years. Using the car on weekends in the summer or for car shows will keep the old girl young, and make it better able to handle to passing of time. A classic car needs to be loved as you would your own child, which is good because they cost about the same. Look for cars that have the following characteristics: historical, rare and unusual, famous, loved, or just plain cute.

BMW M Coupe – This one is a little upscale for many buyers, since a good example could be a little pricey. Shooting Brake design and very low production numbers make this an excellent investment.

Historical cars are typically cars that either made or were part of history. Cars that were raced, certain track cars, special editions, or have a connection to a historical event usually retain their value regardless of the market. Cars owned by celebrities can be included in some cases. Examples of these would be special coach built cars, rare editions offered by the factory or the dealer, cars that were used as part of a historical event, movie star cars, and cars that are very old. Provenance is the key, and it is important to get as much documentation as possible.

Fiat 124 Spyder – Another low production car with few good examples left. Most were consumed by rust, or trashed by bad driving, but a good example can demand top dollar.

Rare and unusual cars are typically cars that have low production numbers, custom one-off vehicles, celebrated special editions, first and last cars of a production, cars not readily available on the market, and cars with unusual options not regularly found. Examples of these cars could be as varied as a Ferrari 250 California, or the last remaining example of an AMC Eagle SX/4.

Lincoln Continental – the 1960’s models are poised to gain traction again. This car once commander a premium price, but lost value in the downturn. Time is making this car rarer every day, and finding a good one is difficult. Famous due to “The Matrix” and “Entourage.” Look for the convertible version for the best return, but be wary of the complicated top mechanism.

Famous cars are typically the General Lee, the Back to the Future Delorean, or Kitt. These are cars that were found in movies and television, and are recognized as collectable. More than a few DeLoreans have been sold because of the movie, in spite of the fact that they are actually horrible trash. Cars like the VW Bug are reminiscent of Herbie, even without the paint job, and automatically resonate with buyers. However, full reproductions have a limited market, and should be avoided.

1940-1960 era Pickup Truck – These trucks are in high demand, with restored examples going for well over 50,000.00. Easy to work on, and with readily available parts, these are perfect for the investor that is willing to put a little work into them.

Loved cars are typically the type of car owned by your grandparents. These are the cars purchased new, and have unbelievably low mileage. They were cared for lovingly, and no expense was spared in upkeep and maintenance. Car enthusiasts are also a good source for these cars, and locating one can be as easy as finding a specialty car site or forum. Examples of these are the typical little old lady car, a 1976 Cadillac Coupe DeVille in Forest Green with the plastic still covering the seats.

Saab 900 – The early Saabs are getting harder to find every day. Finding a nicely kept low mileage car could mean an excellent return on your investment. Avoid the late model GM cars, and go for the early models. Special editions (and there were a lot of them) are best.

Cute cars are the easiest to find. Typically these are cars that remind someone of their youth, and spark the urge to relive those days once again. People buy cute cars just because they can, for fun, and usually resell them just as easily. Though you probably won’t retire off the profits from a cute car, you will never have trouble selling it. Examples include the Mini Cooper, Fiat 500, VW Beetle, MGB, Fiat Jolly, Triumph Spitfire and the Mazda Miata.

Ford Probe – I chose this one to represent the whole age of aerodynamics at Ford. Early examples are hard to find in good shape, but it can be well worth the effort. Avoid the newer body styles, and go for the original for the best return.

Before you decide on a car, make sure you get professional advice. Buy the best car you can, with no maintenance or mechanical issues, low mileage, no body rot or issues, no accidents, as few owners as possible, and with the most complete history possible. The amount you spend up front could mean less money spend down the road. Also, I would recommend staying away from restorable cars, as the cost to restore could be many times the value once completed.

Honda S2000 – This is Honda’s answer to the Mazda Miata. Produced in low numbers,, and always a favorite of the motoring press, this car promises a good return for investors. Later models are best, and look for one that hasn’t been abused by a Tokyo Drift fan.

After the purchase is when the fun begins. Maintenance issues can pop up without notice, and the costs for some cars can be astronomical. Drive with care, and tackle issues as they arise. Leaving work for later only adds to the problems. Store the car properly, maintain it, and drive it enough that it is exercised but not abused. Classic cars do not make good daily drivers, and I have receipts for $2,000.00 a month in Jaguar maintenance to prove it. When it comes time for the resale, make sure to market it properly. Whether it eBay or Sotheby’s, how you sell and market the vehicle could be the difference between profit and loss. Nothing ruins the sale of a car more than the act of selling it.

Subaru SVX – This Giugiaro designed grand tourer was Subaru’s first attempt at a luxury/performance car. The most unusual part of the car is the glass to glass canopy, a feature that makes this car really stand out. Low production figures combined with the unusual styling means this car is sure to rise in value. Avoid the teal green or eggplant colored cars at all costs.