Ontario man spent $40K on 1934 Ford Coupe — and owned it for years. But the police just took it away because it’s stolen property. How to avoid this pitfall with 3 alternative assets

The road to heartbreak

Unbeknownst to the Evoys, the car had been sold to them by a man who had stolen it from his business partner. And they’re not the only ones who have had something similar happen: The OPP investigation involves more than 200 vintage cars, according to CBC.

The Evoys followed the required steps when they bought the car. It was safetied (a safety standards certification that shows your vehicle meets minimum safety standards), plated and insured, and they possessed an Ontario government-issued ownership slip. Yet, days after the visit from the detective, the car was towed away without compensation and without the option to file an insurance claim, since it had been retroactively reported as stolen.

The Ontario Motor Vehicle Industry Council (OMVIC) — the province’s vehicle sales watchdog agency — can offer little help or compensation because the seller wasn’t a registered dealer.

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A legitimate classic car can be a sound financial decision

Not only have the Evoys lost a prized possession and the savings they used to buy it, they’ve lost what could potentially be a sound addition to their investment portfolio. While regular cars depreciate by as much as 10% as soon as they’re driven off the lot, collectible cars have the potential to appreciate over time.

However, price performance varies widely by the type of vehicle, as noted in the Hagerty Price Guide Indexes, a series of stock market-style indexes for classic cars. Many factors can affect price performance, so a certain amount of expertise is needed to approach cars as an investment.

But they may offer investors an opportunity for price appreciation, lower volatility, inflation hedging and diversification — not to mention personal enjoyment.

If you don’t have the expertise, the money for a classic car, or any desire to maintain one, you could consider investing in a classic car fund, which offers fractional ownership in a portfolio of collector cars.

However, if you do plan on buying a collector car from a private seller, ask for the original bill of sale and a history of the vehicle’s service record from the seller’s dealership or repair shop (which means it’s less likely to be a stolen car). Also, do a complete VIN check (the 17-digit code usually found on the dashboard, door jamb or engine block), which can help determine if the vehicle was stolen or re-VIN-ed. Services such as VinAudit Canada and Carfax can provide a report on the vehicle’s history. Also check with OMVIC to see if the seller is registered.

Other types of alternative assets

Cars are only one type of alternative investment. Others include real estate, precious metals (like gold), fine wine and art. These allow you to diversify your portfolio, providing a buffer to the volatility of the stock market and helping to safeguard your financial future. Many alternative asset classes, such as real estate, also offer a hedge against inflation.

But investing directly in these asset classes often requires some degree of expertise. And you could still be exposed to the potential for fraud, theft and forgery — incidents that have affected even careful, knowledgeable investors.

One way to dip your toes into alternative investments is with ETFs and investment funds, which allow you to participate in these markets and potentially profit from them, even if you’re not an expert. While you don’t hold the physical asset, you could still reap the benefits.

Investing in funds also helps you avoid a predicament like the Evoys now find themselves in — out $40,000 and their date nights at Dairy Queen.

Sources

1. CBC: They owned their cars for years. Now Ontario police say they're stolen property (September 29, 2024)

2. Hagerty.com: Which Collector Cars Are Faring Best in a Picky Market? (July 17, 2024)

3. VinAudit Canada: Home page

4. Carfax: Home page