Factors Affecting the Volatility of Classic Car Prices

Distinguishing which classic cars will rise in value and which will fall is like predicting stock prices – there are many models you can use, none of them work all the time. And like investing in the stock market there are people who have made it their livelihood, so what tips do they have to share?

1.     Classic Car 2 Supply and demand: Cars that were initially churned out in huge numbers have less chance of becoming collector’s items through their ubiquity. Prices often rise through scarcity, so it pays to read and know what cars were produced in small numbers. With time, the number of this limited supply will dwindle further creating scarcity.

2.      Quality: There’s no getting around this. If a car was made with care then it will always exert an attraction over collectors. Just like in choosing to invest in the stock market, we’re looking for a discrepancy between price and quality. In both cases (stock market and classic car buying) price reflects desirability, not intrinsic quality. So know your stuff. If you don’t have the time to devote to research then seek the advice of those who do.

3.      Beauty: Think of the Delorean from the Back to the Future movies. The DeloreanDeloreans were a heavy, unwieldy car that were produced in small numbers. Even at the time of release their sales were poor. Even though it lacked the intrinsic quality of other cars produced around the same time the Delorean is, without doubt, a beautiful car. It’s use in the three films created value and ensured its place as a classic car.

4.      Trends: Classic cars (like business stocks) can, for reasons quite unrelated to their worth, suffer drops in value because of trends in the mass market. Think about how the enmity between France and England affected the prices of old Citroens and Morris Minors in each other’s countries. Astute investors will understand and account for prevailing attitudes towards classic cars that have little or nothing to do with the cars themselves.

Classic Car1The trick in identifying whether a car’s price will rise or fall is a confluence of all these factors. Add in to the mix a little luck (let’s face it, there’s always something that can’t be accounted for) and you have an exciting, fascinating and lucrative industry; one with a rich history and fabulous future.

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One Response to Factors Affecting the Volatility of Classic Car Prices

  1. Really, no one knows when the price will go up and down. You have explained very well regarding what things to do before making any decision. John…whenever I come to your website, I always get some new information and I always enjoyed your post.

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