JOHANNESBURG – For most investors, traditional asset classes like equities, bonds and cash will make up the bulk of their portfolios. However, for the adventurous, there lie many other non-listed investment options that offer both potential yields as well as enjoyment. These other asset classes are collectively known as alternative investments or alternatives for short. Alternatives behave differently to traditional asset classes and act as a useful diversification tool, which could lower overall portfolio risk. There is a wide variety of alternative assets available to investors, however, investing in classic cars is a personal favourite.
What is a classic car?
There are many different opinions around when a car becomes a classic. Some base it purely on the vehicle’s age while other motoring groups consider age with other factors like make, mileage and engine size before classifying accordingly. The one thing all motoring groups agree on, however, is that a classic car needs to be old. For most motoring enthusiasts, true classic cars must have stood the test of time. There are various motoring groups that differ on the age where a vehicle becomes classic, and these time periods range from 20 to 30 years, however, I have always applied the 30-year rule to when an investment car becomes classic and when it has the possibility of really appreciating in value.
Why invest in classic cars?