We’ve covered the essentials of owning a car and how to be efficient with it. Now, let’s have some fun and talk about how you can own a great car for very little money (probably). I’m not a financial advisor, so let’s classify this as entertainment, so nobody ends up sacrificing their kids’ college fund on my questionable advice.
With that disclaimer out of the way, let’s dive into how affordable it can be to own a really nice classic car. Most of us deal with leases, where the lease payment covers the depreciation of the car—the value it loses each month as it ages and gets used. As the car gets older, it loses value, and unlike a loan, where you’re paying off the car’s total value, in a lease, you’re just paying for the value it loses (plus a small finance charge, called a “money factor”).
Here’s where it gets interesting: a classic car doesn’t depreciate in the same way. In fact, over the last decade or so, many classic cars have appreciated in value! Now, don’t take out your 401(k) to buy a ‘64 Mustang, but you can spend $50k on one, drive it 5,000 miles a year, maintain it, and resell it three-five years later. Essentially, it’s like a lease: you’ll likely get most or all of your money back. Classic cars don’t depreciate the way regular cars do, so you’re not penalized for age or usage.
That said, you do need the cash up front, and you should be prepared for some risk. The value of classic cars can fluctuate, repairs on older cars can be expensive, and there’s always a chance you might end up with a dud. But don’t worry, there are ways to minimize the risk. First, you can finance a classic car for up to 15 years (since they don’t lose value!). Second, buying from a reputable dealership like Streetside Classics can help. For example, check out this 1967 Camaro: 67 Camaro at Streetside Classics.
This ‘67 Camaro is a great example of minimizing repair issues—it’s got a modern engine and transmission—and it’s a stick shift!
Convinced? Go get yourself a hot rod, you accountant, you!
Eric Samson is a car enthusiast and entrepreneur. He can be reached at [email protected].
