Want to Invest in a Classic Car? Here are What South Africans Should Consider

Not everyone would think about putting their money into a classic car, but over the past 20 years, classic cars have risen in value with some cars appreciating more than art and jewellery.

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Portfolio Manager at Sanlam Private Wealth, Leon Strumpher said that if you are looking to invest in a classic car then a good option would be pre-millennium V8 Ferrari. The Ferrari 308 GTB/GTS or Ferrari F355 Berlinetta/Spider are great investments and in South Africa we have quite a few of these gems.

Why Buy a Classic Car

There are numerous reasons as to why someone would buy a classic car, but according to Knight Frank these reasons include:

·      Capital appreciation

·      Joy of ownership

·      Investment portfolio diversification

·      A haven for capital investment

·      Social status

However, when you are looking to invest in a classic car, keep in mind that not all cars equal. To know which ones will appreciate, you will need to have a deep knowledge of the industry and do loads of homework.

The price tag and returns will vary dramatically on investment cars and it will largely depend on the condition and rarity as well as the pocket size of the buyer.

You will find a wealth of information on the internet and you can even chat with car enthusiasts and collectors. 

What Cars Should You Consider

Another factor that you should take into consideration is the history and the story of the car.

Brands that have a strong history include Ferrari, Jaguar, Porsche, Mercedes-Benz and Lamborghini.

Ferrari is a good betas 59% of classic cars being sold at auctions for more than $5 million areFerraris.

Investment opportunities include the Ferrari 308 GTB/GTS or Ferrari F355 Berlinetta/Spider with many of these gems appearing in South Africa.

These cars come from a highly desired brand and were produced in limited numbers.

The value of a vehicle is driven up by good looks, good performance and limited production numbers as these cars are usually more desirable.

What to Look For

When buying a classic car, buyers need to be careful and watch out for non-original parts, rust and high mileage.

There are also other costs involved besides the purchase price as you will need to take care of the car, house the vehicle safely and ensure that it has adequate insurance.

Investing in classic cars can be rewarding but it is not for the faint of heart. Classic cars can have some great ups but also downs. They are an asset class that can be analysed. With the finer details, you can find the rarity and the real value can emerge.

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