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Investing in Stocks or Bonds? Look at Classic German Cars Instead

Investors are always on the hunt for the latest stock, bond or commodity that can make them money. While stable investments that yield a few percentage points of interest every year are useful, they are limiting.

It is always a good idea to find an investment that can promise a bigger return, and instead of stocks or bonds, the investment may be classic German cars.

 

 

Investing in Vintage Automobiles

German bankers are recommending that clients begin looking at automobiles from German car makers as possible investments. Why? Because many vintage cars have skyrocketed in price over the past 10 to 15 years.

For instance, the Porsche 911 has gone up 683 percent in the past 13 years! There is no mutual fund or stock exchange that is going to match those types of returns. And it is not just limited to Porsche vehicles, but vintage cars from brands such as Volkswagen, BMW and Mercedes-Benz.

Classic Car Index

One German bank, Suedwestbank, has a method they use to track the prices of classic German cars. They call it the “OTX Classic Car Index.” The bank’s research indicates that price changes for 30-year-old German vehicles are going up a lot faster than Germany’s stock exchange.

When one considers the fact that Germany has a very impressive economy, it showcases the value in buying those classic German cars as an investment vehicle. It is especially prudent for individuals who have substantial assets, as they can afford to spend a sizeable amount on a couple of classic cars!

Are There Any Risks?

No investment is risk free. When it comes to classic German cars, one has to avoid counterfeits at all costs. It has become a common theme that certain cars are tweaked to resemble other models, which can dupe buyers into paying a lot more than market value.

Of course, the car being bought still has a value. But there can be a “hundreds of thousands of dollars” worth of difference between two similar models from the same car manufacturer. Anyone looking to invest in classic cars must do their homework before making a purchase.

Sacrificing Liquidity

The other issue with investing in classic cars, such as a 30-year-old Mercedes or BMW, is the loss of liquidity. If an investor is hoping to quickly sell all their assets, a classic car is not going to help.

Of course, anything can be sold quickly, but at a cost. To get proper market value for a classic car, it can take weeks or months to line up a deal. There are very few models, such as the Porsche 911 mentioned earlier, that have a huge market. Other classic cars may have a high value, but they are niche commodities.

But investors who want to diversify can do very well with a classic car investment. Buying a car now and keeping it for the next decade could see huge returns! It is a worthwhile addition to a portfolio that may be full of stocks and bonds.