Are Classic Cars Good Investments? Weighing the Pros and Cons

By Rebecca Lake. January 27, 2025 · 10 minute read

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Are Classic Cars Good Investments? Weighing the Pros and Cons

It’s widely accepted that a car begins to lose value when it’s driven off the lot — but collectible cars can be an exception to that rule. Many types of classic cars, particularly those that are distinctive or exceptional in some way, can gain value over time.

Are classic cars a good investment? Classic car investments fall within the category of alternative investments, which include various asset classes that don’t move in sync with traditional stock and bond markets. Thus, alternative investments — including collectibles like antiques, art, and cars — can offer portfolio diversification beyond traditional stocks and bonds, and may offer high return potential for people who understand the market’s inner workings and complexities.

But similar to other types of alts, classic cars are highly illiquid, lack transparency, and investing in classic cars includes a number of risks.

Key Points

•   Older cars that are distinctive, historic, or extraordinary in some way can become valuable collectibles.

•   Classic cars, like other types of collectibles (e.g., sports cards, jewelry, art) are considered a type of alternative investment, meaning these assets don’t move in sync with traditional stocks and bonds.

•   Like other types of alternatives, classic cars are illiquid and the market for these collectibles lacks transparency and can be hard to predict.

•   Classic cars come with a number of related expenses that would-be investors need to consider, including: storage, maintenance, and insurance costs.

•   Collecting cars may be profitable for those who know the market well, and are able to handle the inherent risks of this market.

What Is a Classic Car?

The Classic Car Club of America defines a classic car as a “fine” or “distinctive” automobile that is:

•   American or foreign-built

•   Produced between 1915 and 1948

•   Generally a higher-end, limited-quantity vehicle

Other definitions of classic cars use a different time frame. For example, the California Department of Consumer Affairs defines a collector car as a special interest vehicle that’s 25 to 35 years old. Additionally, California state law specifies that collector cars must be primarily used in shows, parades, charitable functions, or historical exhibitions and not as transportation.2

Whether a car is labeled as classic, vintage, or antique typically hinges on age. Here’s how the ranges break down:

•  Classic: Manufactured in 2000 or earlier

•  Antique: Manufactured in 1975 or earlier

•  Vintage: Manufactured between 1919 and 1930

These differences are important to know when considering a classic car as an alternative investment. SoFi does not offer any ways to invest in classic cars at this time.

Recommended: Alternative Investment Definition

Factors Affecting Classic Car Values

What makes some classic cars a good investment and others less so? Determining car value requires considerable knowledge and skill as you can’t always rely on modern vehicle valuation sites. Kelley Blue Book, for instance, is a popular valuation site but it doesn’t offer estimates for cars that are more than 21 years old.4

Numerous factors influence what a classic car is worth, including:

•   Age

•   Condition

•   Rarity/scarcity

•   Popularity

•   Brand recognition

All of these factors can affect a classic car’s investment return. Older vehicles in good or excellent condition that have a rarity factor are more likely to command higher prices compared with a more recent-year vehicle that’s more common, less popular, or in poor condition.

Recommended: Evaluating the Pros and Cons of Alternative Investments

Potential Benefits of Investing in Classic Cars

Here are some of the positives of becoming a classic car investor.

•  Appreciation potential. Your everyday vehicle might lose value over time but some classic cars can gain in value as they age. In some cases it’s possible to sell a collector car for much more than what you paid for it. A 1955 Mercedes-Benz 300SLR Uhlenhaut coupe sold at auction for $143 million in 20225 — but it was one of only two such cars ever made. That situation is rare, and most types of collectible cars won’t command nine-figure prices.

•  Enjoyment factor. If you’re a classic car aficionado, investing in them could be a source of pleasure. You might draw enjoyment from seeking out in-demand vehicles, restoring them to their original condition, joining collector associations, or simply driving them around town on the weekends.

•  Diversification. Classic cars can offer some portfolio diversification, which could theoretically help you manage risk in your portfolio. Continued appreciation of vehicle investments can help offset slower or negative growth from the stock portion of your portfolio if market volatility increases. But appreciation is never guaranteed, no matter what type of asset is in hand.

•  Tangible asset ownership. Some investors prefer assets they can see or touch in person and classic cars deliver that. You may feel more connected to your investments when you can be more hands-on with them.

Risks and Challenges of Investing in Classic Cars

Classic car investments carry risk like anything else. It’s important to have perspective on those risks before you begin investing to make sure classic cars are a good fit for you.

•  Market volatility. Classic cars are worth what a buyer is willing to pay for them at any given time. If the market fluctuates, or investors are pulling back on classic car investments out of fear of a broader economic downturn, that could affect the values of the vehicles you own.

•  Maintenance costs. Even if you’re not driving a classic car daily, you still need to spend time maintaining it. Maintenance costs — and potentially restoration costs — should be factored into your investment expectations as these expenses effectively lower returns.

•  Storage and insurance. Once you acquire a classic car as an investment you’ll need a place to store it where it’s protected from extreme temperatures, excessive humidity, and the risk of vandalism or theft. If you don’t have such a place available at your home you’ll need to pay storage fees to park your classic car elsewhere. In addition, like most valuables, a collectible car will need to be insured.

•  Authenticity concerns. Authenticity is always a concern with any type of collectible investment. Buying a classic car requires extensive due diligence on your part to ensure that what you’re purchasing is the real deal.

Recommended: Is Investing in Art a Good Idea?

Understanding Classic Cars as an Alternative Investment

Before considering whether to invest in collectible cars, it may be helpful to understand some of the basics about alternative investments in general. Classic cars — like antiques, art, sports cards, jewelry — have some of the typical advantages and disadvantages of alternative investments. Investors can access some alternatives through a traditional brokerage or online investing platform.

Potential disadvantages of alts

•   Alts are often higher risk, and/or can be subject to greater volatility, depending on the market involved.

•   Markets for most alts are not transparent, making it difficult to track prices and determine the asset’s real value.

•   Are usually less liquid than traditional investments due to limited number of buyers and lack of a convenient market.

•   Often have higher minimum investment requirements (e.g., higher purchase price), and higher maintenance costs.

Evaluating a Classic Car for Investment

How do you find a classic car to invest in? It can take time and you’ll need to do your homework. Here are some guidelines for evaluating whether a classic car is a good investment.

•  Set your criteria. First, decide what you’re looking for. Are you interested in a specific make and model, or do you want to invest in a car that was manufactured in a certain year? Establishing the basics can help you refine your search.

•  Shop around. There are different ways to find a classic car to buy. You might look in auto trader magazines or online, visit auction houses, or attend classic car shows. Looking at different buying options can give you an idea of how much prices may differ from one place to the next, and where the best deals can be found.

•  Don’t buy blind. It may be tempting to buy a classic car you find online but it’s a mistake to do so without seeing the vehicle in person first. If the seller allows it, bring along a mechanic and/or a professional appraiser to inspect the vehicle with you.

•  Check the condition and provenance. Take time to examine the car’s condition and its details. Look into how many were produced, where it was made, and what kind of demand exists for any vehicle you’re interested in to assess whether its valuation is fair.

•  Consider the timing. The best time to buy a classic car investment is usually when you can get it for the best price. Following market trends can give you an idea of how prices are moving at any given time so you can better time your purchase.

Alternatives to Direct Classic Car Ownership

You can still invest in classic cars even if you don’t want to own one directly. Some of the alternatives to physical ownership include:

•  Fractional ownership. Fractional ownership allows you to invest small amounts and claim a partial ownership stake in a work of art or other collectibles like cars. Drift Capital, for instance, offers fractional share investing in the world’s rarest and most valuable cars.6

•  Classic car funds. Classic car funds work similarly to mutual funds, in that they accept money from multiple investors. Those funds are then pooled to make investments in classic vehicles.

•  Classic-car-themed ETFs. ETFs or exchange-traded funds are structured like mutual funds but trade on an exchange like stocks. Auto ETFs can offer exposure to a range of vehicle-related companies, including car manufacturers and classic car storage facilities.

Alternative investments,
now for the rest of us.

Start trading funds that include commodities, private credit, real estate, venture capital, and more.


The Takeaway

Classic car investments are not limited to the ultra-wealthy; virtually anyone can invest if they have the capital to do so and the willingness to learn how the collectible car market works.

Classic cars are considered a type of alternative investment, though, and as such come with certain potential risk factors, such as lack of liquidity and markets that aren’t transparent. Alts can be profitable, and may offer a hedge against inflation or portfolio diversification.

Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

How liquid are classic car investments?

Liquidity for classic car investments is tied to what’s happening in the market and what type of car you own. The more in-demand a vehicle is and the stronger the classic car market, the easier it may be to find a buyer.

What insurance considerations are there for classic cars?

Insuring a classic car is a smart move as you want to protect your investment, but you’ll need a policy that’s designed for the type of vehicle you have. Several insurance companies offer coverage for classic, vintage, and antique vehicles. How much you’ll pay for a policy can depend on your level of coverage, the age and condition of the car, and how it’s used.

Can I use a classic car while it’s an investment?

You can use a classic car investment but it’s important to consider how wear and tear might affect its value. You’ll also need to discuss use with your insurance company and review your state’s laws, as some states won’t consider your car a classic if you’re using it for personal transportation.

How do economic conditions affect classic car values?

Economic conditions can affect demand for classic car investments and the returns they generate. During a downturn, for instance, demand for classic cars may slow which could drive prices down. When the economy picks up and demand increases, prices could rise as well. Some car brands may hold their value better during economic ups and downs.

What expertise do I need to invest in classic cars successfully?

Investing in classic cars requires knowledge of how that market works and what affects valuations. You’ll need to know how to identify a classic vs. vintage vs. antique car, and what paperwork is required to purchase and insure one. You’ll also need to understand how selling a classic car for a profit may affect your tax situation.


Photo credit: iStock/welcomia

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.


Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at https://sofi.app.link/investchat. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

SOIN-Q424-045

TLS 1.2 Encrypted
Equal Housing Lender