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How to Invest in Classic Cars

By U.S. News & World Report

For many Americans, owning an automobile is a necessity, but depreciation and other costs nearly ensure that it’s also a poor investment.

But not always.

During the last decade, more investors have been jumping on the classic-car bandwagon, buying antiques and otherwise prized automobiles as an alternative to traditional investing. The demand has helped push the value of classic cars up nearly 500 percent in the decade ending in 2014, according to the Knight Franklin Luxury Investment index.

What’s driving values? The Internet, for one. The amount of information available on the Web, as well as the ease with which data can be found, has removed a lot of the footwork necessary to ensure a particular car is worth purchasing, says Alain Squindo, chief operating officer at RM Sotheby’s, an auction company that specializes in rare and collectible automobiles.

“It’s a much faster and effective way to research cars” that has allowed many more people to become savvy investors, Squindo says. As with other types of alternative investments, such as works of art or wine, classic car investing for many is a passion. And much like those investments, buying a collectible car needn’t require an extraordinary amount of money. Paying under $20,000 is “perfectly reasonable,” he says.

Whatever your price range, be sure to pick the best example you can find. Here are some other tips to consider:

Not just any old car will do. Rarity is the big driver of classic car values. Knowing how many examples of a particular make, model and year is key to understanding whether it’s worth its asking price. It’s one reason some experts suggest focusing a search on German and Italian vehicles, such as Porsche and Ferrari, which simply didn’t make many cars. One example: A 1955 Porsche 356 Pre-A Speedster by Reutter fetched 341,600 euros ($381,120) at RM Sotheby’s Paris auction this month — well above its estimated value of 250,000 to 300,000 euros. The car’s relative scarcity — only 1,233 examples were built — was likely a significant contributor to its final auction price.

Keep passion in mind. If you’re looking to invest in a classic car to make a quick buck, better keep moving. Although the market continues to expand, expert sentiment in February saw its biggest month-over-month drop since 2009, suggesting the classic car market may be slowing, according to a report by Hagerty Insurance, a vintage-car insurer. Keep this in mind: Buy what you love. If you never make a penny from your investment, you’ll at least own something you truly want.

Do your research. Sure, the Internet can help you research a make and model’s history, but it can also connect you with other collectors, enthusiasts, even previous owners — many of whom are eager to share what they know.

Consider age and condition. Generally, an older version of the same make and model is worth more. But other factors influencing value include the number of miles on the odometer and the amount of original equipment, as can documents showing the vehicle’s previous owners, maintenance and travels, which can also provide insight into how original the car is.

Don’t forget the intangibles. A vehicle’s value isn’t limited to nut and bolts, and sometimes the purchase price is determined by intangibles. Some collectors, for example, prize original condition over restoration. In other words, beauty is in the eye of the beholder, so the perceived value of a car often depends on the collector’s preferences.

One isn’t enough. Just as you wouldn’t buy and hold just one stock, it pays to diversify your portfolio of classic cars, too — if you can afford it — should you be serious about making money from buying a classic automobile. It can be tough to know if and when a particular car’s value will accelerate and by how much. Spreading your investment over several models can help hedge your bets. Squindo, from RM Sotheby’s, says collections of 100, 200 or even 300 cars aren’t unusual.

There are extra costs. The cost of owning a classic car isn’t limited to its purchase price. Other expenses such as insurance, maintenance, restoration and storage must be considered before you plunk down your hard-earned cash. Keep in mind that owning a vintage vehicle — just like holding stocks — means you’ll likely need someone to help you manage your investment, otherwise known as a mechanic.

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How to Invest in Classic Cars originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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