Investing in Cars in 2024: Is It A Good Idea?

Did you grow up wanting to drive cool cars like James Bond and Steve McQueen? 

Then acquiring collectible cars may seem like a dream come true.

 However, investing in cars isn’t for everyone. 

Sure, it can help diversify your portfolio, but there's no guarantee of an ROI. And sourcing the best collectible car deals can be challenging. 

Before you invest, let’s discover what makes a car collectible, the best investment cars in 2023, and how you can start investing. 

We’ll also answer a few other questions you may have about investing in cars and whether collectible cars are a good investment. We’ll also show you a great alternative investment option: fine wine, and how to easily invest through Vinovest. 

What Makes A Car Collectible?

Sure not every car is a collector’s item. 

But what exactly makes a car collectible?

Here are a few characteristics of collectible cars:

• Rarity: Cars produced in limited quantities can become collector items, especially sought-after car brands like McLaren, Aston Martin, Lamborghini, and Ferrari.  

For example, the exceptionally rare sports car model (only two cars were ever made) 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupé was recently sold at an auction in Germany for a record $142.9 million. This makes it the most expensive car ever auctioned.

• Design: Interior and exterior design play an essential role in a car's desirability. A unique or aerodynamic design and sleek and comfortable interiors make a car collectible. Vehicles that pioneered new car technologies are particularly sought-after.
• History: Cars with a racing history are more desirable to collectors, as well as those associated with famous designers. For example, cars designed by Raymond Loewy or Carroll Shelby are in high demand. 
• Celebrity Connections: Previous celebrity ownership or movie appearances can also affect a car’s status. For example, cars owned by Jay Leno, Steve McQueen and Paul Newman are in high demand. 

So what are the most coveted collectible cars today? 

5 Collectible Cars To Buy In 2024

From modern classic to vintage options, here are some highly sought-after collectible cars.

• Shelby Cobra 427
• Alfa Romeo GTV6
• Volvo 1800S
• Porsche 924
• Mini Cooper 1964

1. Shelby Cobra 427

This is arguably one of the most iconic sports car models in history and one of the most coveted in North America. The Shelby Cobra 427 has a legendary sleek design and a V8 engine. It’s also renowned for having the world's first computer-designed chassis with Dual A-arm, four-wheel coil-over independent suspension.

On average, this collectible car can fetch around $2.1million.

2. Alfa Romeo GTV6

This modern classic car has seen a consistent price increase in recent years. Famous for its 116-type chassis and a distinctive 1980s look, this was the only V6-powered Alfetta in the range. 

The average price for a mint condition Alfa Romeo GTV6 is $16,908. 

3. Volvo 1800S

The sporty-looking Volvo 1800S is popular amongst car enthusiasts with its four-cylinder engine. This attractive coupe combines the safety and sensibility of a Volvo with a stylish Italian design. 

The average price for this car is $29,425. 

4. Porsche 924

This collector car was originally a collaboration between Audi and Porsche. The svelte 924 model was the first road-going Porsche to have a front-engine rear-wheel-drive configuration. 

If you find one in good condition, you can expect to pay around $29,272.

5. Mini Cooper 1964

This iconic car was produced by the British Motor Corporation (BMC). It has a space-saving transverse engine and front-wheel-drive layout. The groundbreaking Mini Cooper design allowed 80% of the floorplan to be used for passengers and luggage. 

The MK1 was the first version of the car, and today the price averages $36,108. 

How To Start Investing In Cars? 

First, decide on your budget and whether you’re looking for a mint condition vehicle or a fixer-upper.

Then, you can start your search for the ideal vintage car.   

1. Where to Search

You can contact a local broker to help you track down a specific model. You could also check auction sites and online investment platforms like Rally RD, Mecum, Bonhams, and Sotheby’s to spot hidden gems!   

Note: Be extremely cautious when purchasing cars and other collectibles online and through newspaper ads. Beware of scams, and never give out your personal information. 

2. What to Look For in An Investment Car 

Here are a few essential factors to consider: 

• Original Condition: A collector car that has never been altered and is close to its original state will have the highest value. 

Modifying the vehicle will drive down its value, so ensure that the car is as close to its original state as possible. For example, a car that’s been resprayed in a non-factory color will have a lower value. 

• Matching Serial Numbers: Ensure the serial numbers on important vehicle parts match. Vehicles with matching serial numbers of the engine, gearbox, and chassis from the factory are the most valuable. 
• Documentation and Service Records: Look for cars with original documentation, including owner's manuals, competition and service history. These documents provide insight into how the vehicle was maintained and cared for. 
• Bodywork and Appearance: Seek models with an iconic appearance or one created by a legendary designer or builder, as this can significantly influence the car’s value. 
• Competition History: Cars with a documented history of competing in motorsport will also be worth more. Vehicles that have famous race wins and championship titles are the most sought-after.
• Previous Ownership: Cars that were owned by notable celebrities (especially celebrities involved in motorsports like Steve McQueen and Paul Newman) are highly valued. 

You could also look out for cars famously featured in television shows or movies, like the Aston Martin Vanquish from the James Bond franchise. 

Also, the fewer previous owners a vehicle has had, the better, as this indicates that it's been well-loved and cared for. 

Next, we’ll address other questions you may have about car investment. 

Frequently Asked Questions About Investing in Cars

Here are some of the questions potential car investors usually have. 

1. How Should I Look After My Investment Car?

It’s essential to have your investment car serviced regularly and maintained by an accredited vehicle technician. You should also ensure that the service history document is updated. 

Keep your investment car parked in a secure location and drive it as little as possible. Keeping the mileage down will ensure the car retains its value. 

Also, ensure that your collectible car is insured and your insurance premiums are up to date. 

2. Are There Other Ways To Invest in Cars?

If purchasing a collectible car isn’t for you, there is another way to invest - by purchasing car stocks or equity shares in the automotive industry. 

When it comes to the new car industry, investment trends are moving towards electric car companies and away from the internal combustion engine car industry. 

Leading new car stocks in 2023 include:

• Tesla Inc (NASDAQ: TSLA)
• General Motors Company (NYSE: GM)
• Ferrari Nv (NYSE: RACE)

If you’re interested in the automotive industry, you could also consider automobile ETFs (Exchange Traded Funds). This way, you can pool your money with a large group of investors and have a professional broker invest in the best options. 

Some good automobile ETF options include: 

• First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ)
• The Global X Autonomous & Electric Car ETF (NASDAQ: DRIV)
• The KraneShares Electric Vehicles & Future Mobility ETF (NYSEARCA: KARS)
• The Dow Jones United States Automobiles Index (INDEXDJX: DJUSAU)

3. Are Car Investors Subject to Capital Gains Tax?

If you make a profit on the sale of your investment car, you will have to pay capital gains tax. 

4. How Much Should I Spend on a Car? 

A well-maintained investment car typically ranges between $10,000 and $50,000. However, there are much more expensive investments like the Ford GT40 Mk1, worth more than $5 million. 

Anyhow, the amount you spend on a car investment depends on how much you can afford. 

Now, for a car to be called a “classic car”, it should typically be at least 20 years old. The demand and value of an older car increases with time. 

You can also buy limited edition new cars as an investment. But you’d probably have to keep them for many years before you’re able to make a profit. 

Are Collectible Cars a Good Investment?

Investing in cars can be a rewarding investment for the right person. However, before taking the leap, you should be aware of the benefits and risks.

Benefits of Investing in Cars

Here are the two main benefits of car investment.

• Potentially Profitable: If you have an exceptionally rare car, you can make a good profit when you decide to sell as long as the vehicle is in perfect condition. 

Over the last 10 years, the classic car market has outperformed other collectible markets, including stamps and coins. For example, in 2019, the collectible car market was up 33.78%. 

Additionally, classic car investment can provide a currency hedge. If your local currency dips, you can export your collectible car to another country with better exchange rates.

• Owning A Work of Art: The car market is similar to the fine art market in that your investment is aesthetically enjoyable and unique. This contributes to their allure.

Many collectible cars come from times when there weren’t as many government rules and restrictions. So, car designers and engineers could be as creative and original as they wished. 

Risks Associated with Investing in Cars

There are also a few risks involved in classic car investment.

• Expensive Car Repairs: When investing in an older car, repairs can be costly. The car spares required are difficult to find and expensive since they probably aren’t in production anymore. 

Moreover, you’ll have to find the right repair technician to fix your classic car, as not all mechanics have the skills or experience to do so. And classic car mechanics may charge more than others. 

• Storage and Insurance Costs: You’ll also need to pay for storage facilities if your garage isn’t suitable for collectible vehicles. Remember, classic car insurance policies usually require that the car be stored in a proper facility with security. The monthly insurance premiums on collectible cars are also high. 

Additionally, the costs to transport and ship a collectible vintage car are very high and only done by specialized companies. If you move or want to sell your investment car, you’ll need to factor in these costs. 

Now, collectible cars don't always offer a great return on investment and finding the cars with high ROI can be very challenging. 

Instead, you could consider exploring other alternative investments like fine wine. 

Let’s explore this alternative investment class in detail. 

Fine Wine: A Savvy Investment Alternative

Alternative investments like collectible cars, art, real estate, and fine wine are suitable for portfolio diversification purposes. 

According to the Knight Frank ‘luxury investment index’, fine wine outperformed collectible cars and other luxury asset class investments in 2021.

Additionally,by 13% in the 12 months to June 2021, reflecting the growing popularity of wine investment. Fine wine is also more liquid than other collectible investments such as cars.

However, only 1% of fine wines made each year are investment-worthy. So getting your hands on a rare bottle can be tricky, especially for highly sought-after wines from leading wineries. 

But don’t fret - Vinovestcan help!

Vinovest is an industry-leading wine investment platform that makes buying, storing, and selling rare and authentic wines a breeze.

Fine Wine: An Alternative to Investing in Cars in 2024

Alternative investment categories like collectible cars may be a good idea for a diversified portfolio. But remember, collectible cars don’t always offer the best returns and you might have to spend years trying to track down the right car.  

It’s a good idea to consider alternative investments like fine wine, which has historically yielded better returns than collectible cars.

Visit the Vinovest website today to discover how you can easily invest in the world’s best wines with just a few clicks.