Depreciation, defined as the gradual loss in value of an asset over time, is one of the realities of owning a car. However, classic cars follow a different set of rules regarding depreciation. Because of their collectible nature, classic cars can be treated more like investments that may appreciate over time. Here at Alexander Automotive, our dealers understand the ins and outs of classic car investment and depreciation and are happy to explain how they work. 

What is Depreciation?

Depreciation refers to the rate at which your car loses its value from the first year you purchased it. When you buy a new car from a dealership, its value begins to drop from the moment you first drive it off the dealership lot. 

The Market for Classic Cars

One way to diversify an investment portfolio for the automotive enthusiast is to start collecting classic cars. Any financial analyst will recommend against using current vehicles as an investment, as most lose a good portion of their value within the first few years of ownership. However, the rules are flipped upside down with classic cars. 

Not only do most classic cars not depreciate, but within the past decade, the market for classic cars has outperformed other collectibles like stamps and coins and has even matched the stock market at times. 

One of the groups that measure the collector’s car market is the Historic Automobile Group International. It tracks vintage collectible cars from automakers like Porsche, Ferrari, and more, and it has been found that the value of these vehicles has increased 6.19 percent in 2022 and 2.73 percent in 2021. 

Here at our Franklin TN classic car dealership, we carry a wide selection of classic cars that appeal to the head and heart alike. Stop by to discover the classic car of your dreams.