Investing In Classic Cars Is More Profitable Than Investing In The S&P 500

August 20, 2008

Surprised about cars being more profitable than a market index?  We're not.  Not one bit.  We've been trying to tell people for year that the worst investment you can make is buying a new car, and one of the best you'll ever make is buying a collector car.  As soon as you drive a new car away from the lot, the value of the car decreases by 20%.  That's a pretty big hole to be digging,  And with gas prices the way they are, some fuel-guzzling SUV's are becoming worthless.  For instance, take a 2005 GMC Yukon Denali.  A Very nice vehicle that was purchased for approximately $60,000.00 in 2005.  Upon  trading it the other day for something more fuel efficient,  the most any dealer would offer as a  trade was $6,000.00.  Folks, that is down-right depressing.

We are not here to harp about how bad an investment a new car is.  We're here to open your eyes one more time to the world of investment diversification in the form of antique automobiles.  The true collector and muscle cars that many once loved as teenagers, are now making everyone cringe with the prices they are fetching.  A Corvette that could have been purchased 30 years ago for around $2,000.00 can now bring a price of around $62,000.00 in pristine condition.  But let's get to the real meat and potatoes.  There are staggering numbers to back this claim.  From 2004-2008, the percent increase in value for collector cars was 36%.  This is more than double the S&P 500 for the same time frame.  And if you have big money to spend, cars valued at greater than $125,000.00 increasing in value 47% from 2004-2008.  And these prices are just standard selling prices.  A large number of these cars are so rare and desirable that they are sold at prestigious auctions such as the Barrett-Jackson auctions that attract thousands of visitors who want the chance to bid on, or just see some of these cars.

Folk's, they are not making any more classic cars, so they just become more rare each year.  And besides, sometimes investments like stocks are absolutely boring because you cannot take them out and drive them

So enjoy your next major investment, and make it a convertible, because then your wife won't mind as much.