With bank interest rates currently low, people are looking for alternative ways to make their capital work for them. One fun way to do this is to invest in classic cars and with the news from private bank Coutts that the values of some classic cars have risen 257 per cent between 2005 and 2013, sinking your money into an old Ferrari or vintage Jaguar might just be a sound investment.
“In Europe, interest at the banks is at an all-time low. So rather than put money there, some people are putting it into cars” says Paul Spires, general sales manager at Aston Martin Works. “You might buy a car for £65,000, and in five years it might be worth £80,000 and you’ve had five years of fun”
As with anything you need to fully understand your market, do your research and decide what type of car you really want. You need to consider the costs involved of insuring, maintaining and storing the car as well as initially buying it. With finance journalist and ex-Sotheby’s expert Simon De Burton predicting that “The value of most sought after cars will continue to rise, thanks to interest from emerging markets” So if you enjoy your motoring, you might be able to have some fun and make some money into the bargain.
While classic car insurance is often cheaper than standard motor policies, it is important to ensure that your vehicle is covered for its actual market value. Some policies will allow you to insure on an agreed value basis or a current market valuation. If you are using an agreed value, ensure that you review it regularly to keep track with its appreciating value.
Other unusual investments include; Wine, Art, and Watches. The following items are record breakers;
- The highest price paid for a bottle of wine was $225,000 to settle an insurance claim for a 1787 Chateau Margaux dropped by a waiter in 1989. *
- The most expensive painting ever sold was When Will You Marry by Paul Gauguin it was reportedly bought for £200m ($300m) at auction in February 2015. **
- The Henry Graves "supercomplication," by Patek Philippe, sold for $24 million at Sotheby's in 2014 It's the most complicated watch ever created.***
The owners of these were certainly not wishing they’d left their money in the bank!
*People magazine 1989.
** The Guardian 2015.