This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
MONEY COMMENT
By
A vintage 1929 Mercedes Benz was sold at auction last week to an anonymous buyer for £4.1m. The Mercedes Benz SKK, which cost £400 in 1941, became the second most expensive car in the world. (The accolade of the world's priciest car belongs to a 1930 Bugatti Type 41 Royale that came under the hammer in 1987 for £5.5m.) The successful auction of the seven-litre Merc, for me, begs the question as to whether investing in classic cars is worthwhile. Almost certainly in this case a return of 1,000,000% has been a profitable venture for former owner George Milligan, who unfortunately died this year. A return of one million percent over 63 years equates to a compound annual return of 16%. Over the same period, the UK stock market returned an average of 12% a year. However, investing in classic cars is not without risks. Firstly, and perhaps most importantly, which of the many cars on the market today will be the likely winners of tomorrow? Unfortunately, there are no hard-and-fast rules to guide potential investors. In fact there are very guidelines at all! Some experts reckon that cars featured in films, such as VW Beetles, Jaguars, Aston Martins and Mini Coopers can be a good starting point. However, there is little evidence to support this. Secondly, should you consider buying a car that may be in desperate need of a major restoration job? This can be cheap way of starting off a collection, but this route should only be attempted by experienced mechanics, who are prepared to devote endless hours to their hobby. Thirdly, even if you bought a roadworthy vehicle, maintaining the car can be quite costly. As with any mechanical contraption, faults will crop up periodically, and these need to rectified if the car is to be licensed and insured, although it's probably fair to assume that a £4.1m car doesn't get driven very often! Other considerations include storage costs, scarcity, and perhaps most importantly, whether you have a genuine interest in cars. Personally, cars don't interest me that much. I would rather have had invested the £400 in the stock market. Admittedly, my investment would only have turned into £290,000 instead of £4.1m. However, I wonder how many cars I would have had to buy back in 1941 just to ensure that my collection was properly diversified! More: Car Buying guide | Get a quote for cheaper motor insurance