Few things in this world are useful, glamorous and a potential investment at the same time, so it's no surprise that the global classic-car market is booming. "There's a lot of people buying collector cars now, especially 30 to 45-year-olds," says specialist auctioneer Dean Kruse in the Chicago Tribune.
Not all old bangers have the same money- making promise and buyers need to know their stuff. First comes the question of definitions. Classic car' is a rather misleading term it can simply mean the vehicle is at least 15 years old, not that the motoring community considers it a classic design.
The terms veteran', brass', vintage', pre-war', post-war' and modern' are more tightly defined and refer to the years in which the car was made.
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However, age alone does not determine value. The top prices are made by rare sports racing cars, such as Ferraris, Jaguars and Maseratis, that are eligible for classic-car racing events.
Particularly desirable are cars that have documented racing histories from early in their lives. "These cars had great racing histories, early on in their life, that are totally unrepeatable," says Rupert Banner, head of Christie's international car department, in the FT. "You cannot recreate history and people will pay premiums for a particular race win or something similar."
Special cars from these marques can fetch serious money and generate big returns. A Ferrari 250 GT Lusso, worth about £300,000 a decade ago, can now sell for three times that sum, depending on its history.
But the aspiring car collector doesn't need to take out a second mortgage, since a famous name can cost less than a new mass-market saloon. "You can buy an Aston Martin V8 for less than £15,000 and a Ferrari 308 GTB for around £20,000," says Tim Schofield, head of collectors' cars at Bonhams.
While soft-top sports cars tend to be in the highest demand, there are enthusiasts for almost every car ever made and many less-obvious models could turn out to be decent investments. Glen Waddington of Classic Cars magazine thinks the BMW 2002 series saloon and the Alfa Romeo Giulia Coupe, both currently around £2,000, are potential winners.
But the car market is prone to bubbles. Jaguar E-Types were a hot ticket in the 1980s boom and some models changed hands for six-figure sums. But they're less rare than many people think and prices have since slumped to around £40,000.
Since prices are unpredictable, "as a simple rule, if you do not love cars, do not look upon them as an alternative to bonds and equities", says the FT. Apart from the market risks, cars need more care and attention than most investments and owners will incur regular costs for maintenance, storage and insurance.
Auctioneers Christie's (www.christies.com) and Bonhams (www.bonhams.com) have large motor divisions and Coys of Kensington (www.coys.co.uk) specialises in classic cars. Many sales are made through smaller dealers or advertisements in enthusiast magazines, such as Classic Cars.
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