Jay Leno on why the Prius is the new Mustang
Investing in automobiles may sound like an expensive, if glamorous, alternative to stocks. But talk to noted car buff Jay Leno and you’ll soon realize that investing in autos today isn’t all about Ferraris and Bugattis.
“I had an intern at our show who was 21 years old,” said Leno. “I said, ‘You like classic cars?’ He said, ‘Yea.’ I said, ‘You got any?’ He said, ‘Yea, I got a '91 [Mazda] Miata.’ And I went, well yea, that was built before he was born. And when you look at the ’91 Miata, it was the first generation. It’s twin cam. It’s 5 speed. It’s a real sports car. It’s very simple. It’s very lightweight. And you realize – that will be the Mustang of the future.”
Even the Ford (F) Mustang is, in many ways, a surprising collector's item. As Leno told Yahoo Finance, when the Mustang first came out in 1964, Ford made a million of them and so no one thought they’d ever be a collector’s item.
Get the Latest Market Data and News with the Yahoo Finance App
“For so may people from my generation, it was the car of their youth, the car they lusted after,” said Leno. After all – who can forget Steve McQueen tearing up the silver screen in a forest green ’68 Mustang in “Bullitt”? Now that translates into baby boomers buying old Mustangs and helping to drive the price up.
So what cars are set to become the Mustangs of the next generation? According to Leno, the '91 Miata is one. So is the first generation Toyota (TM) Prius. “First generation Priuses will seem cute and quaint in another 20 years. They’ll seem so simple: Little battery, little engine and you know, ‘My mom had one when I was 5,’” he said.
But before you go out and buy a '91 Miata and a 2000 Prius, Leno has some words of advice for would-be car investors. “It’s like artwork,” he said. “If you buy what you like, if it doesn’t go up in value, at least you still like it.”
But there are precautions you may want to consider. According to Kiplinger, for example, investors should be aware that there are higher costs associated with these types of investments – and that doesn’t refer to just maintaining your investment’s carburetor and transmission. Auctioning a car off after it appreciates in value often comes with a 7-10% commission fee, for example.
Related: Ford CEO: We're making a 'Tesla' for the masses
If you’re more into cars because they’re cool, than because you hope to make money off of them, you may be in luck there, too. Leno is launching a new show on CNBC (CMCSA) called “Jay Leno’s Garage.” You may recognize it from the Internet version which has been running on the web for about a decade, according to Leno, and on YouTube (GOOGL) for the past year and a half.
“I’m not a big fan of these shows where they call each other brother and throw tools at each other. I mean, [my show will have] maybe a little bit more of the history and the design and that aspect of the automobile,” he said.
More from Yahoo Finance:
We're in an auto bubble: Here's how to play it
El Erian: October volatility a preview of what's ahead
Meg Whitman's HP earnings report card: What's working, what's not
