Today, The Car Spotter will be talking about the predicted increase in demand for classic cars and vehicles since the recent pension changes that came into effect on the 6th April.
The already booming classic car market is set to gain another boost since people can now withdraw up to 100% of their retirement pot, with some individuals choosing to invest in classic cars and vehicles since it is an area that has seen very good gains and increases in value.
Despite only the first 25% being tax free and the other 75% being subject to income tax, people may still opt to take out their pension as a one-off lump sum.
You can view impartial pension information here on the official government website.
Although it is probably a lot of peoples dream’s to own a rare, exotic classic car it may not be the best investment and there are a lot of things to consider.
Firstly there are a few drawbacks. A classic car will have upkeep and maintenance costs and provide no income whilst being owned. The only time it may generate returns is when it is sold but there is no guarantee the investment will increase in value with time. If the vehicle is left as part of an estate, it will be taxed as part of the estate. It may be difficult to quickly sell a classic car should the cash value be needed elsewhere.
However choosing the correct classic vehicle could also provide some great returns. Classic car values have risen more than gold, silver, jewellery, stocks and art amongst other investments.
Coutts bank say the value of some classic cars rose 257% between 2005 and 2013. Particular Ferraris, sought after Porsche’s. Lamborghini’s such as the Miura and Countach, Lotus’, Land Rover’s, Bentley’s, Rolls-Royces, BMW’s, Mercedes and many other makes have seen values increase rather than depreciating with particular models.
With prices never being guaranteed, they may fall as well as rise. Do you think you can spot the next classic car? Some factors that can affect the value and desirability of a classic motor include appearance, image, rarity, history, condition, mechanical aspects and drivability. They can also be money pits with large restoration bills.
Some people believe buying a classic should be done purely for the enjoyment and any rise in value should be seen as an added bonus.
What classic car would you purchase? Do you think it is a wise move to spend a large amount of your pension on a classic car?
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