How To Protect Your Savings Bidding On Classic Cars
As the COVID-19 pandemic continues to spiral unabated in many parts of the world, the economy is more in the spotlight than ever, as millions of people have lost their livelihoods in 2020, and the prospects for recovery look grim as there seems to be no end in sight.
If you are one of the lucky dads who have managed to stay afloat, and still have savings (less than, you are probably looking for ways to preserve your savings ( bear in mind that 70% of Americans have less than $1000 in savings, of which 25% have none at all ) in the face of all the uncertainty.
In this article, we will take a look at how the more fortunate amongst us have continued to save money, where they have invested it – and how perhaps there is an opportunity to grow those investments by bidding on cars and vintage cars online.
How are people saving money?
In the coronavirus crisis of 2020 more Americans than ever are hoarding their cash, with personal savings reaching a historic high of 33% in April 2020, according to the US Bureau of Economic Analysis. This is due in part to the shutdowns, but people everywhere have high levels of fear and insecurity about if and when the pandemic will end. In addition, personal spending declined by early 14%.
The bulk of the savings are being placed into conventional accounts at commercial banks and credit unions, with the amount of cash deposited jumping by almost a whopping $1 trillion between March and April 2020!
This decline in consumer spending causes fear that this will trigger a decline into recession. As history has shown recessions have also offered lucrative opportunities to grow your savings with smart investing. As Erika Rasure, Assistant Professor in the MBA program at Maryville University opined recently in Business Insider “this is an excellent time to set financial goals and seek opportunities for investment that exist specifically in a market like this". Where you do not have money, have employment insecurity, or just worried about what the future will hold “there is a keen awareness of how much money you have, how much money you need, and what you can or cannot do with the money you have." Wise words indeed!
Where is the most popular place to invest money right now?
When surveyed Americans overwhelmingly look to invest in the stock market (28%), real estate (26%), and cash (18%). It should be noted that this is despite the stock market falling by over one-third at the beginning of the pandemic, and it is down by 5% since the beginning of 2020. It is true that stocks are a great investment for the average person, but only if you invest in stable companies for the long term and have the nerve and means to leave your money in even when the inevitable stock market chases occur.
But getting your cash out can be tricky unless you are very skilled, and if you use investment agencies, they will soon take a substantial slice of short-term trades.
Let’s face it, most average people do not have the skillset, time and expertise to play the rises and falls of the stock market.
So why not look to make trades in the classic or vintage car market instead?Let’s take a quick look.
Why buying and selling classic or vintage cars can be a great idea…
The ways to make money are to buy a classic or vintage car online at a site like Bid Garage and hold on to it for some years hoping it will increase in value: alternatively, ‘flip” the vehicle by buying it, fixing it up and selling it quickly.
You will obviously need to do your research about the demand for a particular type of vehicle, and the market in markets where you will be able to turn a profit. You have to know what cars are worth – fortunately, there are some excellent online resources like the Hagerty Price Guide Tool where you can get up-to-date information on historical values, market, and even insurance values for any given classic or vintage car.
For example, for top range vintage cars in the $30,000 plus range there will usually be wealthy collectors even in these recessionary times. The risk is higher and the turnover may be slower, but values of historic vehicles have tended to rise during recessions, and financial pressures could encourage owners to sell their cars at knock-down prices. Choose quality cars from low-production manufacturers with prestige.
What if you only have a few thousand dollars to spend?
Well even if you only have $2,500-5,000 to invest in flipping a standard used car, you can still turn a couple of thousand-dollar profit if you look for popular entry-level starter cars like Toyotas, Hondas and Nissans, and maybe invest some time, money and effort cleaning them up and making them mechanically sound. Then look to flip them via online car sellers and maybe after a few successful transactions you’ll be dealing in the classic Chevrolet and Cadillacs in the near future.
So we hope that this article has inspired you to look at this creative way to grow your nest-egg, and we’d be delighted if you would share your best tips in the comments below.