Investing in classic cars can be a rewarding hobby. Certain vehicles can command staggering prices, depending on the model, version, and its history.
While the concept might seem simple – purchase a car, keep hold of it for several years, then sell it on at auction for an increased price – it can be daunting for newcomers.
There are many considerations to make and risks to take. This includes whether to buy from a private seller or auctioneer and if the cost matches the vehicle’s condition.
Follow our five tips to start making smarter investments in classic cars.
Know the market
First, and perhaps most importantly, you should research the classic car market. Get to know the prices vehicles typically retail for, what cars are currently being sold and what how the marketplace fluctuates.
If you have a model in mind, take a look around to see what the asking prices of similar vehicles are – this will help you see what’s within your budget.
You also need to understand what an acceptable asking price is, especially if you are buying at auction, and how the value of similar models change over time – if you hold onto it for long enough.
Learn about the car’s history
Once you know the type of car want to invest in, carry out a HPI vehicle check (Hire Purchase Investigation). This is a standard vehicle history check, giving you visibility of important information about it, including its:
- Accident history
- Insurance past
- MOT history
You should also check that the Vehicle Identification Number (VIN) on the car’s documents matches the one that is stamped on the chassis.
For high value cars, it’s a good idea to understand their motor history and any events that could affect their potential value – for instance, whether it has competed in events like Silverstone. Otherwise you run the risk of unknowingly sitting on a gold mine or losing money on your investment.
Check the key signs of ageing
Viewing the car before you buy is essential. When you see the vehicle in person, you can check the vital signs of:
- Wear and tear
- Accidental damage inside and out
It also gives you the chance to inspect under the bonnet, check the condition of the tyres and also the brake discs. If the car is driveable, take it for a spin to:
- Listen to the engine
- Check for smooth gear changes
- Get a feel for the suspension
You can also do spot checks on things like lights, door locks, clutch stiffness and windscreen wipers.
Unless you are a confident mechanic, get an expert to check the car for you, before you purchase it.
Consider unexpected costs
If you are unable to make repairs yourself, consider how much it might cost a specialist mechanic to fix or find a replacement part for. Remember the older or rarer the model, the harder and more expensive it could be to fix.
When you have an idea of possible repair costs, you’ll have a much better idea of how much of your remaining budget can be put towards paying the asking price.
Remember to also factor in auctioneer commission fees when you buy and sell. Auction houses may charge a percentage fee of the final price that the lot sells for, so shop around to find the lowest rates.
Choose where to buy
While there are many private sellers operating online, offering competitive prices, many motor enthusiasts will agree that auction houses are the place to experience the thrills of buying classic cars.
There, you will be surrounded by a myriad of different vehicles, knowledgeable experts and will have the opportunity to potentially find the hidden gems, if you are willing to haggle. Getting to grips with the auction process can take a while, so it pays to attend a few auctions first, to get a feel for how things work.
Once you’re more comfortable with bargaining, you can start looking to buy at these events. Like any big investment, before you commit to buying a classic car, make sure you have done your research and consulted an expert for more advice.