It is a well known fact that almost all cars depreciate in value over time. Therefore, if you are looking for an investment opportunity, we would advise against using a car for that purpose. The general rate of depreciation is surprisingly high - this informative AA article on depreciation estimates a new car will lose 40% of its value by the end of the first year of ownership. To answer the question of ‘Are Cars Worth it?' then, these facts and figures almost certainly prove that financially, cars are never worth it. However, their usefulness as well as their history, class and performance make vehicles worth it in a whole different way.
While 99% of cars depreciate in value, it is not unheard of for cars to appreciate in value. They may also initially depreciate and then appreciate later on in their lives. Factors such as rarity, performance and condition all have an affect on this. An example we found here on Autotrader is a red Ferrari Enzo which cost £450,000 new between 2002-04, but will now fetch anything from £700,000+. This is all because only 400 were made and hence they are extremely rare. As the article goes on to say, the best cars for investment would be ‘limited production super-cars in iconic colours and good condition which will hold their value the most'.
As vintage cars go, well revered cars are likely to increase in value as time goes on, as original models will unfortunately be damaged, lost, stolen, scrapped... the list goes on. An example of this would be the Ferrari 260 GTO that was made between 1962-64. When new, it cost $18,000 US. It recently set a world record, being sold for $35,000,000 US in May 2012.
Even cars which were originally fairly common, can now be extremely scarce, meaning that although they originally would have depreciated, will now be far more expensive than they were to begin with. Guessing what car might be well sought-after and scarce enough in 50 years time is nigh on impossible and hence an extremely risky investment.
See a list of the most expensive cars sold in auction from Wikipedia.
There are a 20 or so factors which determine the value of a classic car. These are summed up succinctly here on Wikipedia's Vehicle Valuation Criteria page.
As was made evident from the ‘Which Cars Appreciate in Value?' answer above, rarity is a key to pushing up the value of a vintage or classic car. For newer cars, you should be looking at the condition and mileage of the vehicle. Well made cars tend to depreciate less than others, but the fall in price is generally inevitable. Our page on selling cars explains how the best you can hope for is a depreciation of 13% per annum.
If you are looking for the value of vintage cars for the purpose of resale, we would advise you think very carefully about the way in which you go about parting with your vehicle. There are a number of methods from listing online, to sending to auction and approaching specialist car dealers. However, if you are having to sell purely to raise financial capital Borro can help. As cars do depreciate in value, it would be a shame to sell up for a short term cash injection, losing the amount you originally invested in the car. Instead, you could consider an option to use the value of the car against a secured loan. These loans typically offer up to 50% of the car resale value and at much more affordable rates than logbook loans. In addition, we transfer money direct into your account often within 24 hours. These loans do not take into account any personal finance information or credit checks and are therefore very popular with our customers. To find out more, simply contact Borro on 0808 163 9009 or view our page how-it-works.
Initially, our first priority when assessing the value of your car is checking the V5 document to certify ownership of the vehicle. Then, depending on its age, our experts appraise a prestige car's value in one of two ways:
Modern, high-performance cars:
We verify factors such as year, make model and overall condition. This is then checked against industry leading tools such as Glass and Cap to produce an accurate value.
As well as checking the overall condition of the vehicle, we do a thorough check on auction history records from specialist car auctions such as Bonham's.
Ultimately all these reports are influenced by the factors outlined in the 'How Do I Find the Value of a Classic Car?' section above. To get your prestige car valued accurately and quickly contact the Borro team on 0808 163 9009.
You can use the information below to compare recent UK prestige car valuations. These have been made by our experienced experts and are in-line with current market trends.
Aston Martin DBS
Jaguar XJS convertible
Porsche 911 Turbo