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German bank suggesting classic cars as investments

German bank suggesting classic cars as investments

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With low interest on borrowing, savers also get low interest on their savings. That is leading many to look elsewhere when planning for the future. Sometimes you can find opportunities in the most unusual places. According to German banks, classic cars could be one of those places.

A report from Bloomberg quoting a banker from German financial company Suedwestbank AG says that vintage and classic cars is a good alternative to traditional savings.

‘For customers with more than 1 million euros in liquid assets, a classic car can be an attractive addition to their portfolio in terms of yield and value stability,’ Jens Berner, vintage car expert at Suedwestbank AG’s asset management unit, said in an interview. ‘After the financial crisis, requests for alternative investments such as art, wine or classic cars had risen sharply.’

The banker quotes a local German index that tracks vintage cars. The OTX Classic Car Index which tracks mainly German classics but which can relate globally, shows some cars more than quadrupling their value. For example, the page quotes classic Porsche 911 cars as having gained 683% of their value in the past 13 years. There is no savings account that even comes close!

Choosing your future classic
Investing in a classic or vintage car sounds easy. Find a good classic, buy it and store it in a garage somewhere. Leave it a decade or two, clean and service it and reap a several hundredfold reward. As usual, it is nowhere as simple.

Identifying a future classic is an incredibly risky task and one even some experts are hesitant to put their name to. Making a good investment isn’t just about selecting the right car. It’s about getting the right car at the right price, which means buying at the right time. Unless you’re a bona-fide classic car expert, you’re going to need professional help.

Fortunately help is at hand. Insurer Hagerty produces an annual report on what it thinks will be future classics. In its 2018 release, it says the Audi RS3, Chevrolet Camaro ZL1 1LE, Dodge Challenger SRT Demon, Honda Civic Type R and Jeep Grand Cherokee Trackhawk are their top five picks for potential future classics.

I have always believed that cars are a great place to spend money. Until now, that has been about enjoyment and lifestyle as much as anything. If I had a million dollars to invest, maybe I would buy a classic. One thing is for sure, I wouldn’t do it without professional advice and I would suggest you don‘t either!

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