The common wisdom is that a new car loses half of its value the moment you drive it off of the dealer’s lot. That assumption is close enough to the truth because in doing so, a car undergoes the sinister transformation from new to used. However, not all cars lose their value at the same rate and older, so-called ‘classic cars’ can actually appreciate in value. So, we have to ask, can a car be an investment?

Rare or culturally significant classic cars, like muscle cars, can be valuable collectibles. In fact, classic cars can become so valuable that taking out a small car loan for one might be a great investment, especially one with superficial defects that reduce its cost. Fixed up and well-maintained, such a car can be resold at a profit or held onto as a high-value asset.

Is your car an investment?

Some Age Better than Others

If you’re looking for a new car that you expect to resell in the near term, don’t despair! Even though classic and antique cars are by far the best proper investments, plenty of new cars lose their value much more slowly than most and make for a good option for minimising your losses on resale. Resale value rests on a number of factors, including the car’s availability, popularity, reputation, and brand.

The Red Book tracks car resale values in Australia and is a valuable resource for used car sellers and buyers. It looks at the best individual cars in various categories, including vans and compact cars as well as the best overall and luxury brands for resale. If, for example, you expect to advance in your career in the next few years and intend to buy a car soon and then resell it in a few years to finance your next, better vehicle, pay close attention to these statistics.

The Diamonds in the Rough: Cost-Effective Classic Cars

Classic cars, due to their rarity, their hard-to-find replacement parts and the difficulty in finding mechanics who can work with them, can be very expensive to buy and maintain. If you’re out to find a classic car for the love of the vehicle itself, then you’re not just looking for a monetary investment, and this may not be as much of an issue. However, if you are looking to make an investment, then you’ve got a little strategising to do.

Remember that you’ll most likely need to restore this vehicle. You’ll want to find out which classic cars are readily available and for which parts are relatively plentiful. You may even want to look for a good mechanic who’s experienced with that model. Hemmings has a good article on where to start in finding and restoring classic cars. Because it’s geared towards an American audience, the specific cars that it lists might not be the best for Australians, it’s a great guideline.

While most cars are terrible investments, there are a select few that you should look out for. With any luck, you’ll find a good car to invest in. To you, we wish the best of luck, and hope that this article has helped you make your first steps!