I doubt any car could be considered an 'investment', considering their running costs. If you would have put $5,000 cash into an interest bearing deposit back in 1970 instead of purchasing a Phase 3 GT-HO, you would be a lot better off today not owning the GT-HO over those years. On the other hand a good original or restored Ford Model T still commands good $$ today. They were only $200-300 new, still not a good long term investment.Originally Posted by seavan
The value of old cars goes thru lots of ups & downs over time, but there are factors other than just desirability which have an effect on their price. The car's condition, rarity & the prevailing economic climate also have a huge effect.
You ask, when does a collectible or desirable car turn into a Vintage car ? I think you need to firstly check out the definition of a 'Vintage car' & secondly check up on what some Vintage & Veteran cars currently go for.
A Vintage car is defined as one built from 1919 to 1929, while those pre-1919 are defined as Veteran. 1930 to WW2 are pre-war & WW2 onwards are post-war & so on. This system worked well in the 60s & 70s but nowadays with the majority of classic cars being post WW2, they tend to classify these later cars by decades. So a Sandman or Monaro can't 'turn into a vintage car'.
The recent (pre-GFC) explosion in collectible cars of all types, especially 70s muscle-type cars, has distorted prices markedly but they've now settled down a bit. So don't take the last 10 years as a good example of collector car pricing.
If you graph any car's value over time, they devalue greatly from new to 5 years old, then slow down from 5 to 15/20 years, at which point many cars reach junk value. I remember in the late 70s/early 80s when Falcon GTs & HK/T/G GTSV8s could be owned for not much money. I also remember very well in the 70s, early Holdens (even EH) were dumped in the streets deemed to be worthless. A bit like VN Commodores & EA Falcons currently.
When cars get to 30 years plus years of age, they begin to become sought after, some models more than others & their values vary depending on rarity & desirability, but even the plain jane cars bring good $$$ if they're in good condition. Most seem to peak at 35-40 years old, but again this is general guide. From then onwards they don't seem to drop markedly, because inflation holds them up. If you didn't pay stupid money currently for say a Monaro or Sandman, I can't see that figure dropping much, even in the long term. After that 'peak' any drop would be gradual & minimal, if at all. It should be more of a plateau, as long as the car is kept in good condition.
The recent boom was an exception, for several reasons, but once those prices come down out of the stratosphere (remembering it was only a few cars anyway) they won't drop, they will always hold their value. A true investment should always increase over the long term, but cars values won't do that.
Dr Terry
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