Timeless and tax-free

Classic cars may not be gold mines, but they are still a source of riches. By Roger Bell

How would you like a car that's exempt from excise duty, cheap to insure and resistant to depreciation? What if it also attracted envy and kindred spirits, even enriched your social life? Too good to be true? No. Inspector Morse runs such a car. James Bond, too. As thousands of classic car owners will testify, there's a lot to be said for a golden oldie.

Loosely defined,a classic car is anything on four wheels that's survived 10 years, better still 20. Class, style and condition count for more than age, though. Any "classic" that doesn't quicken the pulse lacks the essential tingle factor. Triumph Stags and old Jaguars have it in abundance. Ford Populars and Hillman Minxs do not. Never mind that the Stag was a dog. Classicism transcends bad reputations.

Just as rare grandees with exotic names do wonders for the ego, so also does a competition heritage. Take the humble Ford Cortina (and you're welcome to it). A few hundred pounds will suffice for a nice survivor. For a prime Lotus Cortina -- same car, superior engine and provenance - you'd need pounds 10,000. Blame Jim Clark. Cars that evoke memories of derring- do on the race track are premium-priced cars.

Anyone who buys a classic as a hedge against inflation either hasn't been paying attention or is guilty of self-deception. Nothing spectacular has happened to values since they crashed six years ago, leaving many speculators with smouldering wallets. These days, classics don't so much make money as stretch budgets. At worst, the decent ones avoid crippling depreciation - the bane of all new cars. At best they hold their own against inflation. Insure them on a restricted-mileage policy, and they cost remarkably little to cover. All right, to be exempt from excise duty (road tax) - currently pounds 140 a year - cars must be at least 25 years old. But anything more than four years old qualifies for reduced perks tax in business. A classic on the firm? Why not?

Employees pay benefit-in-kind tax on 35 per cent of their company car's original list price. So if your dream machine is a mint MGB GT - price pounds 1,428 with overdrive in 1971 - the tax incurred is a fraction that for a typical modern repmobile costing 10 times more. Take a third off for age allowance, and another third for business mileage, and you're facing a minuscule tax bill. But beware. The Inland Revenue's largesse does not extend to cars over 15 years old if their current value exceeds pounds 15,000.

Whoever's funding your indulgence, aim high. For the price of a new mid- range Ford Mondeo you could buy a cracking Sixties Mercedes 250SL, a decent mid-Seventies Ferrari 308 GT4 or various iterations of the Porsche 911. All are wonderful to drive, huge on image and strong on character. Such cars are not so much mobility as moving experiences.

On a lower plane, Ford Fiesta money will suffice for a prime Alfa Romeo Montreal, a pristine 20-year-old BMW 3.0CSL or a late-Sixties Jaguar 340 - value in top condition about pounds 9,000. The earlier Jaguar Mk2 3.8 with the same body and underpinnings would cost twice as much.

If the budget's tight go for something in good nick of a lower order rather than a tired pedigree. Five grand - Lada Samara money - will buy a nice Lotus Excel, an MGB or a fibreglass-bodied Reliant GTE. Better a healthy Humber than a moribund Maserati.

There are, of course, snags. For a start, the classic car market is a minefield for the unwary. In a recent report, the AA said two-thirds of the classics it inspected were in need of extensive repair. Finding the right car is the biggest headache, but not the only one. Old cars are not as safe as moderns with airbags and anti-lock brakes. Catless, they also pollute more. In the very long term, emission regulations could threaten their very existence. Reliability is another contentious issue. Not so spares or repairs for the more popular classics, thanks to specialist clubs offering guidance, expertise and sympathy to members. Socials and motoring events, too. You're never alone with a golden oldie.