With the easing relations between the U.S. and Cuba and thousands of classic cars in Cuba some companies have made plans to get these classics into collectors’ driveways here in the USA. Will this make a good investment strategy?
Cuba loosened some trade restrictions on autos, allowing new autos to be bought and sold inside Cuba. Lifting the U.S. trade embargo on Cuba, would let Cuba’s classic automobiles return to the U.S. Experts anticipate a niche market of buyers willing to pay a premium to own a piece of Cuban history.
“Most people would want them as a sort of art piece,” says McKeel Hagerty, chief executive officer of car insurer Hagerty. Even immaculately restored examples of 1950s-era American cars aren’t terribly valuable, Hagerty says.
Many of the cars found in Cuba have been modified and are far from original. In many cases the cars that came with the big original motor now has a four cylinder that was pulled out of a Russian Lada. The only real value left is the bodies and even then they have been modified and repaired with non-original parts.
But it does seem there is a market; interested buyers should expect to pay two or three times as much for the jerry-rigged Cuban examples. Hagerty estimates that a top-of-the-line 1954 Chevrolet 210 Delray club coupe would fetch $20,000, while the Cuban version might command $40,000 to $60,000. Similarly, one could pay more than $60,000 for a 1955 Buick Century sedan re-imported from Cuba that would ordinarily be valued at $20,600.
With markups like these, it sure seems that there is a valid investment play that could be made. For sure, timing and being able to navigate the Cuban market will be an important factor.
Could this be an investment area for small firms to explore? For now, the embargo still remains in effect and so we may not see too many Cuban Classics rolling down U.S. Roadways that soon. There could be markets in other parts of the world but the nostalgia of American Made Classics has a place in American History and so this investment area could be a profitable one when the time is right.
As things slowly open up in Cuba we may see prices rise inside Cuba, only time will tell if that price bump will reflect here and make it really worth owning a piece of the history.