Classic cars are for fun, not profit

Long-term price escalation hasn't been crash-free.

Michael Ryval 1 August, 2014 | 6:00PM
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The proud owner of a 1971 MGB sportscar, Jon Rosenthall will readily admit that the payback on his investment is modest, in financial terms. Acquired in 1980 for $2,500, and modified at a cost of about $5,000 to include power windows, air vents and a customized dashboard, his MGB is valued at about $10,000 (for insurance purposes). That translates into a 2-3% annual compound rate of return.

"It's fallen behind inflation," shrugs Rosenthall, a retired general sales associate with the Toronto Auto Show, who lives in Maple, Ont. "You don't make money with MGBs. You get a different kind of payback."

The payback comes from the "elation and satisfaction you feel when you drive down a country road in the summer," Rosenthall continues. "It's about 25 degrees, the top is down, and you're heading to the home of another member of the MG Club."

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Michael Ryval

Michael Ryval  Michael Ryval, a regular contributor to Morningstar, is a Toronto-based freelance writer who specializes in business and investing.

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