If you’ve got an interest in classic cars, the chances are you’re aware that they’re considered a decent investment right now
If you’ve got an interest in classic cars, the chances are you’re aware that they’re considered a decent investment right now. With interest rates on savings still at rock bottom, savvy investors are turning to other ways to make their capital grow. And classic cars are one of the areas that many are looking at.
Here, we speak to Philip Spani, who is one of the founders and directors of Fine Classic Autos (fineclassicautos.com), an online classic car auction service. Philip has handled classics for more than 30 years – everything from affordable everyday motors to supercars and near-priceless examples like the Ferrari 250 GTO.
He says that the market continues to be on the up: “Classic cars are a great investment at the moment and are still showing growth. Some people would say that this is sad for true enthusiasts, because the biggest growth of buyers is speculative investors, many of whom have switched out of traditional investments like buy-to-lets. “This is a big change from a few years ago, as nowadays a portfolio of classic cars is a well-recognised investment.”
Philip says that, in terms of the number of classic cars sold, more than 5,000 went at auctions alone in 2015 – a 14 per cent increase on the previous year. It’s hard to put a solid figure on return on investment, but a widely-recognised ball park number is that classic cars have seen a 500 per cent return over the past decade.
Philip said: “Compared to property, classic cars are a far better bet, and far more efficient for the individual as the profit is tax free.”
But – and this is the first pitfall to be aware of - this only applies to the individual, so if someone is seen as ‘trading’ they will attract a capital gain. For the most part there are some fairly simple things to do if you’re planning to invest in classic cars.
Always buy the best you can afford
Philip says: “Buy with your head, not your heart. Buy originality rather than over restoration – American restorations, for example, are frowned upon over here, as they tend to ruin the originality.”
Look for trends
Philip says: “Very often, a rise in prices is dictated by people buying what they couldn’t afford as kids, for example the Ford Capri, which can now go for in excess of £50,000 for a really good one.”
Check you’re getting what you’re being sold - and get it checked by an expert if in doubt
Philip says: “Pitfalls include the most obvious things like making sure the seller has title to the car being sold and checking that the car is what it says it is.”
Check for authenticity
Philip says: “There are many fakes on the market, across all price ranges.
“Bear in mind that if someone owns an original chassis plate, the rest of the car can be re-manufactured around it. This is not illegal unless the car is misrepresented, but again takes you into the ‘originality’ argument.”
So, is there a trick? Probably not, like all investments it’s about being clever, trying to spot what’s hot and what’s not and doing your homework. Philip says: “There’s no secret in making money with classic cars. Like other antiques, the hardest part is finding them. The clever part could be anticipating the next big rise.”
And perhaps there’s one salient tip – buy something that you like and want to own, even if it doesn’t make you money, it will still make you smile.
For a good place to start, visit our for sale page.