Cars - are they worth the investment?

Tuesday, 18 October 2011 10:00

A car is not the most obvious place to invest your hard earned cash but it might pay off.

A recent report by PricewaterhouseCoopers said that the ‘baby-bust’ generation will be 25% worse off than their parents, the ‘baby-boom’ generation, by the time they reach 65. With lifestyle options like buying a house and accumulating a reasonable pension being harder for the baby-busters where can they look to try and increase their wealth in the future?

One place that might be a good place to start is a car. Not the most obvious choice when the average household car will depreciate the second you drive it out of the showroom. However, if you choose a classic model or have the time to spend on restoring one then you may just find yourself in profit.

This was certainly the case for one lucky motorist reported in the Metro. John Foster acquired a rundown Jaguar E-type in 1982. This year the restored car fetched an eye-watering £1.3 million. Sounds too good to be true but before we all rush out and buy E-types let’s not forget there were a few special features to this particular 1964 Jaguar. Not only is the E-type a classic of its generation but Mr Foster’s car also included racing parts after being specially modified for shipping magnate Sir Robert Ropner.

So, whilst it might be unlikely that everyone will see this kind of profit or have as much to invest in the first place there are still many cars out there that might worth a look. Here are a few pointers for those thinking of investing:

1) Look for something unique, such as a car that has competed in or won races or something that was owned by someone famous (they might not be famous yet!). Also, look for limited edition models or where very few made it off the production line.

2) Invest time in a restoration. If you have the space, time and money then this can be a good way to start with something cheap that is worth a lot more once restored.
3) Be prepared to wait. Mr Foster owned his E-type for almost 30 years.

4) Do your research; look into the background of the car and its price history. Speak to owners clubs and attend events to find out more.

Most importantly have fun; it goes without saying that any investment is a gamble so be prepared to lose but hopefully you will at least get more enjoyment from a car than from a bog standard ISA or building society account! By Anna Livesey

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