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Fixer upper

Always dreamed of having a funky vintage car to call your own? It could be worth thousands of dollars. 

When it comes to investing in cars, it’s questionable whether it’s actually a positive thing for your bank balance.

It’s common knowledge that the moment you drive your shiny new car out of the dealership, it depreciates in value. But what about those beautiful classic cars?

Classic or vintage

If you’re an automobile enthusiast, you’ll know that there’s definitely a big difference between a classic car and a vintage car.

A vintage car is generally seen as an old automobile, but true fans know that in order for a car to be classified as vintage, it needs to be from the period between 1919 and 1930.

According to most car clubs around the world, a classic car must be between 30 and 49 years old.

Investment or hobby?

Purchasing a classic or vintage car can help if you want to channel your inner James Dean, but is it an investment or should you maintain those cars purely as a hobby? Just remember, if you choose to use the cars as an investment, it’s best to do your research. There’s a fine line between a car that can be fixed up and re-sold and a total bomb.

You also need to keep in mind whether you’re going to want to actually use the car once you’ve restored it or whether it’s going to become like a piece of art in your garage.

Making money

It may be worth getting a second opinion on any vehicle you’re looking to purchase as an investment. Also, always be aware of how the market is faring at any given moment – make sure there are people who may be willing to buy the car from you if and when you choose to sell it.

You can make money out of a purchase and restoration. However, there are so many variables to consider. Any potential profit depends on car and vintage chosen.

What tends to matter most are the history attached to a car, the origin of the car and the exact specifications.

Remember, it’s only an investment if that’s the mindset you take into your purchase. If you fall in love with the car and refuse to sell it, no matter what the price, it’s not an investment. It may be fun and attractive to have around, but there’s no money going into your pocket unless you’re actually prepared to part with it put it up for sale.  

It’s also important to remember that as with any other investment, you should never rely on one asset or type of asset to make up your entire portfolio. It’s all about a diversified portfolio. If the market for vintage or classic cars falls, then your assets and wealth do too.

Be sensible

If you’re planning on purchasing a vintage or classic car through your self-managed super fund, you’re going to limit the use of the car completely. Like with property or artwork, buying a car through your SMSF renders it technically useless and forces it into storage. You won’t be able to drive it and you won’t be able to display it as a pseudo artwork. And storing a classic can be expensive.

Also, if you plan to purchase the car because you love it and want to stare at it all day, let your emotions run wild. But remember, it may not be worth a lot. If you plan to purchase a classic or vintage vehicle as an investment, don’t let your emotions steer your decision.

Knowing what to look for is imperative when it comes to purchasing a car as an investment. Find out if there’s a specific model or make that’s trending at that particular moment. On the flip side however, it may be a good idea to go unique.

Regardless, the key is looking for original vehicles, where the engine number and the body number match. It also helps if the car is in its original colour and has a traceable history.

Additionally, shop around. As with anything, look at your options and don’t make any rash decisions.