The concept of investing money is collectibles which have high value (or are expected to have high value in the future) is a fairly new concept. Also known as passion investing, as people generally invest in objects they are personally passionate about, this concept is now expanding into the world of classic cars. Only a few decades ago, these passion funds referred to investments in art portfolios but 2006 saw a rising wave of passion funds coming towards classic cars Australia.
To understand the significance of this phenomenon, it is first important to know what the term “classic car” means.
What is a classic car?
While there is no particular definition which is universally used to describe what a classic car is, it is generally assumed that it is a somewhat rare vehicle which was probably manufactured for a limited period of time. As a result of this classic cars often come to be associated with a specific period of time when it was manufactured.
Although this is pretty subjective, a classic car is an iconic piece of machinery that is appreciated for its design and brilliance of engineering. Legally speaking, all vehicles which have a manufacturing date before 1973 are considered to be an “historic vehicle”.
Porsche or Ferrari models manufactured in the 1950s are top performers nowadays. In classic car investment fund the most iconic vehicles in the market belong to the 1980s. These are increasingly attracting the attention of collectors and investors as they are still not enormously expensive or difficult to maintain, but may become revered collectibles in the future.
There Are Three Ways to Invest In Classic Cars
Since classic car investments have become the talk of the town, here is a guide to take part:
This is the most straightforward way of investment. There are several magazines, newsletters, and even websites that regularly report classic cars for sale. You can look for specific cars or models from a specific period of time. These also offer buying advice and tips with details of the vehicles and an in-depth analyzing of their value. Direct purchase is a popular way to invest in classic cars.
Sales and Auctions
Auctions are a great place to pick up on the greatest bargains. There are several auction houses across the country and some of them even specialize in classic cars. They hold regular sales and sell cars at reasonable prices. It is important to do your research before attempting to buy anything at an auction.
Classic Car Investment Fund
These funds provide the opportunity of diversifying risks while making a sound investment. A classic car can cost you thousands of dollars and if you see classic cars as an asset and not to be personally enjoyed, investing in funds may be the way to go for you. These give you access to more models in the market while offering a low entry cost.
One of the major reasons why classic cars have been gaining attention in this regard is that they have been found to show five-fold returns over the last decade. Hence the returns received on classic cars has surpassed that received on wine and art by more than 100%, making investors view them as ripe new ground for passion investing.