If you’re a saver – now is not a great time for any nest eggs you might have incubating. Interest rates are at an all-time low – plus there’s the effect of inflation so what’s a saver to do if you want your horde of cash to actually still be worth something and appreciate in value in years to come? There are stocks and shares but these can be a gamble, especially if you think the FTSE 100 is something you do under the table with your feet. So, if you want something tangible that you can actually see, feel and enjoy, then investing in a car could be the thing to do and if you actually use it, it’ll be exempt from capital gains tax – interested?
Historic cars have given their owners an average return of 456%, which is far more than collectors of stamps, art or wine have got over the same period. Anything that marks your car out as ‘special’ or ‘different’ such as a celebrity owner or racing wins, is a good thing, because it’ll add more value – such as a 1953 Ferrari 340/375 MM Berlinetta that sold for £8.5 million and was driven by three world racing champions.
And it seems collectors can’t get enough of Ferraris because they fetch some eye watering amounts of money – the kind of numbers where you get confused over how many zeros to include. The top three most expensive cars sold at auction include two Ferraris – a 1967 NART Spyder that sold for $27.5 million or £18.2 million in today’s money and a 1962 Ferrari 250 GTO that went for…£25.1 million – yes, really. In between sits a 1954 Mercedes W196, driven by Juan Manuel Fangio (a five-time world champion) that sold for $29.6 million in 2013 (that’s £19.5 million at today’s exchange).
Of course, investing in cars that sell for millions probably means parting with a few yourself in the first place, but investing in cars isn’t just for people with pots and pots of spare cash. Experts are already predicting the classics of the future – and you’d be surprised at what’s made the cut:
- VW Gold Mk 1 – the Golf is already recognised as a modern classic but if you have an actual classic, keep hold of it because it could be worth a small fortune; or you can pick one up now for less than £10,000.
- Citroen XM – sure, it might look a little awkward (ok – ugly) but it’ll only set you back around £1,000 to £3,000.
- Peugeot 205 GTI– a real blast from the past if you grew up in the 80s and 90s and remember these on the roads, typical prices now are between £1,000 and £3,000.
- Rover 75 – ok, it’s a bit of a grandad car but there’s a lot of fondness for these old Rovers, partly because they don’t make them anymore and so are a future classic; prices typically start from about £500 – bargain.
- Subaru Impreza Turbo – Suba-who? as their latest advert goes and they’re right, these cars were more well known amongst the rallying circuit but they’re now getting scarce so snap one up while you can, they range from £800 to £8,000.
If you’ve got a bit more to spare and want to play double your money, then consider the BMW 2002 Tii, you’ll pay about £8,000 for one now but in five years it’ll be worth more than twice that – a predicted £17,500. If you’re being even more daring, then an £85,000 Jaguar E-type series 1 model is predicted to fetch £200,000 five years from now.
So why not put those savings to good use? But if as far as you’re concerned a ‘classic’ car is just a well-dressed old banger, then make sure you’ve got adequate insurance cover for the car you’re driving.