Hobby or Investment - The Future of Your Classic

Investment Grade Vintage Classic Cars Rule

Garagistry recently became aware of a private investment company with the specific purpose of investing in and owning vintage classic cars. This was something we wanted to learn more about - and we believe you will also be interested in their findings as well!

The term "investment grade vintage classic cars" defined vehicles ranging from the early age of automobiles to the muscle cars of the 1960's and mid-1970's.  In their opinion, this entire collection of vehicles "have demonstrated or have the potential for significant value appreciation".  This is excellent news for all classic car hobbyists and enthusiasts - but how does it affect you?


Provenance Does Matter

One of the author's observations stated "By example only, a $4,730 1970 Mustang can sell for $165,000 today, with the proper provenance."  As we have previously encouraged all classic car owners to document, document, and document their provenance, we now have evidence creating and maintaining your individual classic's provenance now has specific financial consequences.

Key Factors Valuing Classic Cars As An Investment

We also noted of the six factors common to typical Investor Growth Drivers and those of Asset Class Economic Value Drivers, one specifically cited the "Growing Interest in Preservation".  

The author's complete list cited the following.  We believe those factors we noted with *** relate directly to factors most classic car owners and collectors readily identify with.
Typical Investment Drivers Investor Demand Drivers
  Investor  Growth  Drivers
Asset Class   Economic Value Drivers
Augment Portfolio Value
Diversify Holdings
Capital Appreciation
Quarterly Distributions

Profit Sharing
*** Proven Appreciation
Opportunity to Outperform the S&P
*** Opportunity to Own Classic Cars
Professionally Managed
Risk Managed by a Professional

Nostalgia and Emotional Appeal

Pooling of Economic Interests

Affiliation with Car & Manufacturer

Balance Portfolio with Alt. Assets
Sense of Exclusivity
*** Limited Supply of Cars
*** Increasing Demand for Cars
*** Growing Interest in Preservation
Source: The Ultimate Classic Car Fund 

Future Appreciation

Furthermore, the authors cited "Opportunities for the greatest appreciation may be found in cars that were produced in limited quantities, posses some of the attributes that transcend monetary reward (i.e. nostalgia, pride, emotional attachment and owner satisfaction), and have an interesting ownership pedigree or history of performance and/or award recognition.  Such assets are real, tangible, physical and literal."  And, as many of us know first-hand, our classics have personalities, make sounds, are fungible (individual units capable of mutual substitution)  and they move our spirit.

Caution:

One caution the author's cited referred to problems associated with misrepresentation at time of purchase/sale. Auction companies may be capable of doing little more than pointing the buyer back to the seller.  Direct sales between a buyer and seller may have even more opportunities for misrepresentation or misunderstanding.  If you want to avoid problems when you need to sell your classic, having a complete, well-documented history (provenance) of your vehicle is critical for a smooth sale.  When buying, asking for and expecting a complete, well-documented provenance of the vehicle involved should be a basic requirement.

Finally, for the record Garagistry has no affiliation at all with The Ultimate Class Car Fund LLC.  We wish them success with their support of the classic car market, and encourage them to make documentation of the provenance of each "investment grade vintage classic vehicle" they own their contribution to the vehicle's value for future generations.

Enjoy your investment with the classic in your garage...

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