Depreciation. The word that car owners everywhere dread the most, and it’s not surprising. A brand new car will generally lose an astronomical 60% of its value within three years of being driven off the forecourt. A good job then that we’re going to avoid all of that nonsense by timing the used car market, and picking up a car that will not only be no longer depreciating, but will appreciate. That is, after all, the name of the game.
So what sort of car age do we tend to look for? A good guideline is 15 to 20 years old. At this point, more often than not, they’ve done all the depreciating they’re going to do and will end up one of two ways within the next few years; in the scrapyard or in the hands of an enthusiast who will cherish, preserve and increase its value. If you’re looking at cars any older you will be paying a premium for a good example, or picking up a bargain and spending twice as much on restoring it. And we all know a restored car can never be as good as an original!
A lot can be said on this subject, but what it boils down to is this; you need to take your time, watch the market closely, and make a judgement call on when you think prices have bottomed out on the vehicle you’re looking at. Do your own research thoroughly as well; make a note of the average selling prices of the car you’re looking at on a regular basis to spot any trends over time. Prices starting to rise consistently? It may be time to jump on board sooner rather than later!
However, let’s not forget that car investment is absolutely a risk, and timing the market can never be an exact science. Those who remember the classic car market in the late eighties and early nineties will know it can easily come crashing down to earth very suddenly. So will this bubble burst again as it did back then? The general consensus amongst the experts is that it won’t, although we may go through ‘cooling periods’. Things are very different now, we have a developing global market for classic cars which means more potential buyers, with the same number of cars available. That can only drive prices one way!
Do your research, keep track of values, and invest wisely!