German banks are now recommending investors to buy classic German cars. Suedwestbank AG’s Jens Berner told Bloomberg: “For customers with more than 1 million euros in liquid assets, a classic car can be an attractive addition to their portfolio in terms of yield and value stability.”
Suedwestbank’s OTX Classic Car Index — which calculates the prices of classic Porsches, Audis, BMWs, and Mercedes-Benzes in Germany — has reported rapid appreciation from early 2005 to early 2018. Germany’s main stock index, the DAX, gained 204 percent in that time. But if you consider the prices of a classic 911s, the appreciation is particularly unbelievable. In 13 years of its lifespan, its value has increased 683 percent, or nearly eight-fold. A 911 that was $20,000 just a while ago is now ten times its actual cost now.
If your investing in a classic car, Make sure the car your picking up has a history to back it up. The more original a car is, the better it will grow as an investment, and manufacturers’ classic departments along with valuation specialists are there to provide proof of a particular car’s lineage and condition. According to Suedwestbank’s Jens Berner, A customer planning to invest in a classic car should only consider cars worth more than 100,000 euros, as below that value any return would likely be more significantly hampered by overhead costs such as proper insurance, safe storage, required maintenance, road tax, and expert valuation.
We would also think twice before buying a cheaper car to flip for a profit, As restoration costs will be really high you end up with little profit. In this case, it might pay off to start with a certifiably nice car than an attractively priced basket case — the hard part would be to refrain from using it. Perhaps it would be best to set more money aside for a matching beater one would dare to drive.