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Top Reasons to Invest in a Classic Car

Buying a classic car is an investment for many drivers and car enthusiasts. While most vehicles would be considered poor investments due to depreciation, the opposite is true of classic cars. Here at our classic car dealership in Franklin TN, our dealers know a thing or two about investing in classic cars. These are the top reasons to invest in a classic car. 

What Makes a Classic Car

Before discussing why you should invest in a classic car, it’s essential to understand what exactly separates a pre-owned from a classic. For the most part, it comes down to age. Most people consider classic cars to be historically significant vehicles that are at least 15 to 25 years old. They possess a quality that makes them interesting to collect, such as unusual designs or limited production runs. The rarer a car, the more valuable it is likely to be. 

Starting Out is Easy

Classic car investing is not limited to individuals with a high net worth. For instance, we have an inventory of classic cars in the $20,000 to $30,000 range. Our dealers are happy to explain what makes our inventory unique and why they are great investments. 

Classic Cars Can Appreciate in Value

Value appreciation is a must for any good investment. Luckily, many classic cars gain value over time due to rarity, performance, or other special attributes. The data bears this out. According to the Historic Automobile Group International, vintage collectible cars from certain automakers increased in value by 33.78 percent in 2019, 6.19 percent in 2020 (unaffected by the pandemic), and 2.73 percent in 2021. 

Classic cars make for excellent investments. Begin your investment journey today by visiting Alexander Automotive and checking out our selection of vintage classic cars. 

Do Classic Cars Depreciate

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. 

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