The ultimate guide to becoming a classic car investor

We often talk about the virtues of classic car ownership. Not only do you get to drive and admire a beautiful machine, you’ll (with any luck) get a sound investment that, in time, will make you lots of money. It’s not quite that simple though, picking the wrong car could leave you seriously out of pocket as restorations and repairs stack up quicker than you can say ‘bank loan’.

If chosen correctly, there is arguably no better investment out there however.

“Classic cars have consistently outperformed almost all asset classes over recent years. Knight Frank’s Luxury Investment Index, which measures the performance of nine luxury assets, has shown that the values of headline classic cars has increased 430% in the last decade, compared to a comparatively modest 55% increase in return for the FTSE 100″, according to Anthony Wenyon, Chief Executive of JD Classics.

If you’re thinking of taking the plunge, you’ll want some trusty advice and that’s where we come in. Here is the ultimate guide to becoming a classic car investor.

GO FOR ORIGINALITY

Remember to look for originality at all cost – you don’t want something that’s been tampered with as this will put off potential buyers in the future. There’s no point investing serious cash in something that’s been modded, buyers prefer originality over virtually everything else. It goes without saying that you shouldn’t buy anything without documentation, the likes of which ideally goes back to its first owner, yet everything else; interior, body panels, engine, should all be original, restored originals or OEM replacement parts.

BUY THE BEST CAR YOU CAN AFFORD

If you buy a vehicle in the best possible condition you can afford, then you’ll save that precious cash when it comes to restoration and upkeep. We turned to prestigious RM Auctions‘ car expert, Peter Haynes, for some further advice on the matter. “The secret to investing in a classic car, regardless of budget, is to buy the best car you possibly can. Condition is everything and restoration is expensive to undertake if you buy a poor car initially. Various factors affect desirability and therefore value, with rarity, provenance and originality being the most crucial factors”.

LOOK FOR RARITY

Generally, the smaller the production run, the more valuable and more highly sought after the car will be. People are often drawn to things that are rare, and their exclusivity means they’ll instantly demand more money. Haynes says, “cars made in small numbers will always be in demand; it’s about having a great car that is swimming in a very small pool of available alternatives on the open market at any given time.”

ENJOY YOUR INVESTMENT

Don’t try too hard. If you’re constantly searching for the perfect car then it will never come. It’s important to enjoy things in life, so don’t just dump your investment in the garage and wait for it to rack up the cash. We’re not suggesting you run it into the ground, or even daily use, but take it out on weekends and make the most of what you have. Rob Turner from Chelsea Cars agrees, ‘If you are earning very little interest on your money at the bank why not buy an asset, use it enjoy it and have some fun, if it increases in value fantastic, you can take it out at the weekend without asking the bank manager, and it will still be in the garage if the bank only guarantees you £80,000’.