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Mike Ballew is the founder of Eggstack®. He’s a member of the Financial Planning Association, an engineer, and software developer.
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Mike Ballew – Financial Planning Association member, engineer, author, and founder at Eggstack.
Eggstack is an independent financial technology company located in Jacksonville, Florida. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
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Classic cars harken back to simpler times when electric cars and autonomous vehicles were the stuff of science fiction. The American love affair with cars is undeniable, but are classic cars a good investment?
For our wedding anniversary this year my wife got us tickets to the Amelia Island Concours d'Elegance. It's an annual charitable event held at the Ritz-Carlton in Amelia Island, Florida. As we strolled past the hundreds of collectable cars, I couldn't help but wonder if classic cars are a good investment.
The Historical Automobile Group International (HAGI) is an independent organization that tracks the value of vintage cars. The HAGI Top Index is the most widely-followed, it measures valuations from brands such as Ferrari, Porsche, and Bugatti. Over the course of the past 10 years the index has increased 500%. By way of comparison, over the same period the Dow Jones Industrial Average was up 250%.
The fact that the HAGI Top Index has seen a five-fold increase over the past decade is not necessarily a green light to run out and buy a classic car. It seems that like many things in life, the best is reserved for those at the top. For every vintage Alfa Romeo that has skyrocketed in value, there's a Dodge Viper that is worth less today than it cost brand new nearly 30 years ago.
A major consideration with vintage cars is the maintenance and upkeep. There is insurance and registration, but that pales in comparison to the repair and maintenance costs. Rubber components such as tires and belts decay with age and have to be replaced. It's difficult to find parts for classic cars, and paying someone to do the repair and restoration work comes at a hefty premium.
Some people buy classic cars intending to restore them to their original luster only to lose interest. They sit in the garage and collect dust and waste valuable space. It's an expensive hobby. You will come out miles ahead if you can satisfy your interest in classic cars by visiting the occasional car show. Let someone else deal with all the hassle and expense of keeping a classic car on the road.
Photo credit: Mike Ballew Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
Financial Planning Association member, engineer, author, and founder at Eggstack.
