Having a garage full of classic and vintage cars is a common fantasy among auto aficionados. If you have the budget to make that happen, should you go on with it? The answer depends on different factors.
If your reason for collecting cars is to show off, we recommend taking more time to consider your reason. While showing off or prestige seems to be the sole reason auto collectors do what they do, there’s more to it than that. Buying cars and making space for them is taxing. And it’s not like you can let them sit in your garage without maintenance. Like the cars you use for work and leisure, the autos in your collection would require preventive maintenance. If you have ten cars, imagine how much their upkeep would cost in total.
That said, here are the things you should consider before being an auto collector:
1. Your Main Reason for Collecting
Aside from the obvious, which is your love for cars, there has to be a more profound reason for your desire to be a collector. Auto collection is a lifestyle, not merely a hobby. As such, it takes commitment to maintain it. And time and money will enable you to make that commitment.
If you want to show off, that might be a weak reason, and therefore not enough to keep you committed. To test your determination to start an automotive lifestyle, determine the goal of your collection. How and where will you acquire cars? How will you pay for them? Until when are you going to collect? Having clear answers for all those questions and more will help you realize if your plan to collect is logical or just a spur-of-the-moment desire.
2. Your Budget
If you’re seriously considering collecting cars, then you clearly have the budget. But it doesn’t mean you can automatically afford to maintain your collection. Buying classic cars, in the first place, can already strain your savings. After all, you can’t just buy any car and expect it to add value to your collection. There are such things as “collectible cars,” which are valued at over $1 million.
While you can buy any car you desire and make it look as good as a collectible, that may not be a wise financial move if you’re aiming to boost your collection’s overall value. To make your garage practically a vault of cash, each of your cars should have historical importance. If you can’t acquire such, buying a celebrity’s used car is the second-best option. But that celebrity should be associated with cars, like Steve McQueen, Jay Leno, and Jerry Seinfeld.
The rule of thumb is, if you’re buying a car that teenage boys fantasize about, that’s a worthy purchase. Most car collectors buy the autos of their childhood dreams, after all.
3. Your Location
Aside from a spacious garage, you should also be living in a safe and secure area. If your location is prone to flooding, you may face a disaster during heavy rain. Similarly, if your neighborhood is plagued with burglars, your cars can be at high risk for theft.
No matter where you live, or your location’s vulnerability to the elements and burglars, your garage should be equipped with an impenetrable security system. You need strong garage locks, security cameras, alarms, etc. You can also equip each of your vehicles with their own anti-theft systems and connect your entire security system to your smartphone for better monitoring.
Also, consider if you’d be staying in your current residence for the long term. It won’t be easy to move several cars if you turn out to have relocating plans. You’d need to look through heavy haul trucks for sale or rent before finalizing your moving plans. So if you might buy a new home in the future, start small with your collection, and only go all out once you’ve got the space you need.
4. The Risks
Another reason collecting cars is costly is tax. Since cars are tangible personal property, they’re subject to capital gains tax if you sell them at a profit. The profits will also incur commissions or consignment fees, transaction fees, and transportation costs.
In addition, an auto collection generates storage costs and requires insurance. If you’re using your own garage, storage won’t be a problem, but maintaining that storage can strain your pockets, too. For one thing, your garage has to be clean, free of moisture, and well-ventilated. Achieving those three isn’t cheap.
Overall, collecting cars is only glamorous on the outside. What you don’t see is the painstaking effort collectors expend to keep their autos in tip-top shape and maintain their lifestyle. If you’re ready to take risks and commit to the taxing life of an auto collector, then maybe the automotive lifestyle is right for you.