Top 25 cheap classic cars to invest inClassic cars appear to be the in thing. Celebrities such as Chris Evans and Harry Styles are well-known collectors and a new report suggests that owners of older cars may now be insuring their vehicles for far less than they are worth, due to the rapid increase in prices.

New tax regulations mean that more classic cars are now tax-free, too, so it got us thinking. What would be our pick of 25 cheap classic cars that could go up in value?

Choose carefully and you can buy an appreciating classic rather than simply scrap metal, so sit back and enjoy our list of 25 classic car gems. We’ve set a budget of £5,000; remember there’s no guarantee these cars will go up in value, and that the prices are for guidance purposes only.

Alfa Romeo Alfasud

Top 25 cheap classic cars to invest in

Price guide: £1,500 – £3,500

A cast-iron classic car, it’s just a shame the Alfa Romeo Alfasud wasn’t built with such rock-solid foundations. When it was launched in 1972, the Alfasud revolutionised the small car sector and also delivered one of the best front-wheel-drive cars in history.

Rust has killed many of these little gems, and today there are fewer than 100 Alfasuds enjoying active service in Britain. Top Gear once heralded it as the best car of the 1970s. And as Alfa Romeo had effectively taught the world how to deliver a sweet-handling front-wheel-drive car, Top Gear probably had a point.

Audi TT

Top 25 cheap classic cars to invest in

Price guide: £2,000 – £8,000

Two decades on from its debut as a concept car at the 1995 Frankfurt Motor Show, the Audi TT still looks box-fresh. Many would argue – with huge justification – that it looks better than the current third generation TT. Three years after its debut as a concept car, it became a production reality, with only minimal design changes.

Its bold, Bauhaus-inspired exterior was matched by a delightfully individual interior and early cars were powered by a 1.8-litre turbocharged engine, either in 180hp or 225hp guise. A guaranteed future classic?

BMW E30 3 Series

Top 25 cheap classic cars to invest in

Price guide: £500 – £5,000

For something a little more practical, how about the E30 3 Series, which offers rear-wheel-drive motoring at budget prices? Naturally, the wonderful E30 M3 won’t slot neatly into the ‘cheap’ category, so our money would be on the Touring, which was the result of a BMW employee’s desire to create a more practical version of the 3 Series saloon.

The engineer Max Reisböck needed something bigger to go on holiday with, so he bought a wrecked 3 Series and built an estate version in his home garage. His bosses at BMW were so impressed, they put the car into production with only minimal changes.

Citroen AX GT

Top 25 cheap classic cars to invest in

Price guide: £750 – £3,000

James May once called the Citroen AX GT the best car in the world and although his tongue was firmly in his cheek, he may have had a point. They simply don’t make cars like the AX GT any more.

It was light – just 710kg – so its 1.4-litre carburettor engine was perfectly capable of giving the tiny French hero a mighty turn of pace. And with no power steering or other electrical nonsense to get in the way, it provided the kind of engaging drive that modern hatchbacks can only dream of.

Citroen GS

Top 25 cheap classic cars to invest in

Price guide: £500 – £4,000

And then there’s the Citroen GS, which is doing a very good disappearing act in the UK. Seriously, Paul Daniels has got nothing on the GS.

The DS and SM might be out of reach these days, but the GS is still sensibly priced – for now. It brought hydro-pneumatic suspension and all-round disc brakes to the man on the street, plus an ability to drive on three wheel – a wonderful car.

Citroen XM

Top 25 cheap classic cars to invest in

Price guide: £250 – £3,000

Putting the C6 to one side for a moment, the XM was the last truly eccentric Citroen. Highlights included a wonderfully-styled interior and super-comfy hydractive suspension. It was only appreciated by a minority of motorists and a reputation for unreliability and complexity didn’t help its cause.

But prices have bottomed out and a strong following with Citroen circles will ensure that good examples are highly sought after.

Fiat 126

Top 25 cheap classic cars to invest in

Price guide: £500 – £2,500

The all-new Renault Twingo and Smart Fortwo prove that the old rear-engine and rear-wheel drive recipe is alive and kicking. Some would suggest this puts them in mind of the Porsche 911, but we’re looking at something a lot smaller – the Fiat 126.

This is an everyday miniature hero you can park anywhere. Surely a classic to invest in, especially when viewed alongside the values of the Fiat 500.

Ford Escort XR3/XR3i

Top 25 cheap classic cars to invest in

Price guide: £500 – £4,500

Fast Fords will always hold their value and whilst the Escort XR3 and XR3i don’t have the RS badge to add kudos, they remain the epitome of 1980s cool. And don’t let the fact that the MK3 Escort did away with rear-wheel drive fool you, these cars will be appreciated.

Values are already on the rise. Early XR3s are thin on the ground, but there’s a good supply of the later fuel-injected XR3i, first introduced in 1983.

Ford Puma

Top 25 cheap classic cars to invest in

Price guide: £500 – £2,000

One day, we’ll look back at the time when a Ford Puma could be bought for a few hundred quid. That day might be a long way off, so patience is definitely required. There are some 29,000 Pumas on the roads of Britain, but rust (check the wheelarches…) and high mileage will see many falling by the wayside in years to come.

Find a rust-free 1.7-litre Puma, ideally with the early ‘propellor’ alloy wheels, and revel in one of the greatest front-wheel drive cars ever built. Better still, stretch to the sublime Ford Racing Puma, because the prices won’t stay this side of £10,000 for very long.

Honda Accord Type-R

Top 25 cheap classic cars to invest in

Price guide: £1,500 – £3,000

The arrival of the all-new Honda Civic Type-R will renew the market’s interest in the Type-R brand, so you can expect the prices of good ones to go up. The Integra Type-R already commands strong prices and there are few bargains to be had. So how about the super-crazy Accord Type-R?

It’s often forgotten, which means the prices have sunk to rock bottom. Ask anyone who has owned one, the Accord Type-R is a properly sorted performance saloon.

Mazda RX-7

Top 25 cheap classic cars to invest in

Price guide: £500 – £4,000

In reality, all three generations of the Mazda RX-7 would make good investments, but our heart belongs to the original, also known as the SA22C. Besides, try finding a good third generation (FD) car for our budget. That’s if you can find an unmodified example at all.

With a purity of design and a free-revving rotary engine, the original RX-7 was a unique proposition in the sports car market. Seek out a specialist and the RX-7 should provide good long-term returns.

Peugeot 309 GTi

Top 25 cheap classic cars to invest in

Price guide: £500 – £3,000

You’ll need to be quick on this one, because we’re already seeing signs that prices may be on the rise. In fact, we’ve seen one admittedly excellent 309 GTi Goodwood on sale for a price in excess of £10,000. Wow.

Here’s the thing. The Peugeot 309 GTi is essentially a 205 GTi in a different frock. Far too many were stripped for their mechanicals, including the 1.9-litre engine, which means there’s around 100 on UK roads. Fortunately, there are treble this amount listed as SORN (off the road).

Peugeot 405 Mi16

Top 25 cheap classic cars to invest in

Price guide: £1,000 – £3,000

Good luck hunting one of these down, but if you do, you’ll be rewarded with one of the very best performance saloons of the 1980s and 1990s. Far too many have been lost to rust or for their engine to be extracted for use in a Peugeot 205.

The earlier cars are quicker and lighter and it’s also worth hunting down the four-wheel drive Mi16x4.

Peugeot 505

Top 25 cheap classic cars to invest in

Price guide: £500 – £3,000

Don’t let the relative anonymity of the Peugeot 505’s styling put you off, this is one special car. Not only was it Peugeot’s last rear-wheel drive model, it was also rather good to lick down a back road in.

Numbers are dwindling fast, which is a shame, because the seven-seat estate is brilliantly practical and the super-rare 505 GTi is a convincing performance car that could give the Germans a run for their Deutschmark.

Porsche 924/924 S

Top 25 cheap classic cars to invest in

Price guide: £500 – £5,000

The Porsche 924’s backstory is the stuff of legend. Originally designed to be a Volkswagen and powered by an engine sourced from Audi…blah, blah, blah.

But the 924’s stock has been rising for some time now, and with numbers decreasing and interest increasing, it’s only a matter of time before values head north. The pick of the bunch is the 2.5-litre-engined 924 S, which is essentially a 944 in a 924 body.

Renault Avantime

Top 25 cheap classic cars to invest in

Price guide: £500 – £4,000

Talk about making an entrance. Over a decade on from the Renault Avantime making its debut, it still looks like a concept car that could so easily be unveiled in 2015.

It wasn’t particularly brilliant to drive (underneath you’ll find an Espace), but the Avantime is all about its bold, coupe-styling and brilliantly eccentric, four-seat interior. Naturally you’ll want the 3.0-litre V6 engine, but the Avantime is a guaranteed future classic.

Renault Fuego Turbo

Top 25 cheap classic cars to invest in

Price guide: £300 – £2,500

The Renault Fuego was the French answer to the Ford Capri, famed for its ‘bubble’ tailgate and sleek styling. It wasn’t especially quick and it wasn’t the sharpest drive, but it was practical.

And – three years after the Fuego was introduced – Renault invited us to enter ‘the turbo zone’ with the new Fuego Turbo, complete with huge 1980s-style side decals. Very few remain today.

Rover 200 BRM

Top 25 cheap classic cars to invest in

Price guide: £500 – £2,500

The Rover 200 BRM is unfairly dismissed in classic car circles, presumably because a) it’s a Rover 200, b) the interior is a bit, er…challenging and c) that orange grille. But hang on a minute, because it’s actually far better than you’d think.

The 200vi upon which it was based was a thoroughly decent car, it has a Torsen differential and that Brooklands Green paint gives it a timeless appeal. Yours for around a grand. Bargain.

Saab 9000 Turbo

Top 25 cheap classic cars to invest in

Price guide: £250 – £5,000

The Saab 9000 Turbo is destined to follow in the footsteps of the super-desirable 900 Turbo by becoming highly collectable. The 9000 was built to Saab’s exacting standards and designed to cover long distances. The seats are amongst the comfiest you’ll find in any class.

The 2.3-litre 9000 Turbo is the one to have and prices are looking strong. Compare and contrast the survival rate to that of the Thema, 164 and Croma – three cars which shared the same platform.

Suzuki Cappuccino

Top 25 cheap classic cars to invest in

Price guide: £750 – £3,750

Thanks to its cult status and neat packaging, the Suzuki Cappuccino is a car that will, at the very least, hold its value. Rarer than the majority of roadsters of the same era (just 1,110 cars were officially imported), the Cappuccino was built to Japanese Kei-car standards.

This means it’s incredibly small and – at 725kg – very light. Go on, you know you want to.

Vauxhall Carlton 3000 GSI

Top 25 cheap classic cars to invest in

Price guide: £500 – £4,000

Right, we know what you’re thinking, but bear with us on this one. Without the Vauxhall Carlton 3000 GSI, there wouldn’t be a Lotus Carlton. And while you can’t afford the Lotus-badged version (not without selling a kidney), you can afford the 3000 GSI.

It’ll be hard to track down a good example, but with a top speed of 150mph and rear-wheel drive, the 3000 GSI makes for an interesting alternative to the cars more commonly spoken about.

Volkswagen Corrado

Top 25 cheap classic cars to invest in

Price guide: £400 – £5,000

What we have here is not only one of the greatest cars Volkswagen has produced, but it’s also another of the best front-wheel drive performance cars of all time. Naturally, the pick of the crop is the properly quick VR6, but you shouldn’t rule out the supercharged G60 or the humble 16V.

The Corrado is a rare thing, in that it was a classic even before it went out of production. Amazingly, Volkswagen struggled to sell it, so a few tears were shed when the VR6 Storm signalled the end in 1995. Useable everyday and even now, as good as many brand-new performance cars.

Volkswagen Golf GTi MK2

Top 25 cheap classic cars to invest in

Price guide: £700 – £4,500

The MK1 Golf GTi is already a bona fide classic and there are very few bargains to be found. But the MK2 Golf GTi is a different story. Yes, prices of the most desirable cars are very strong, but there are still affordable cars to be found.

For example, find a good value three-door 16V in Oak Green and there’s money to be made. The trick is to find a MK2 Golf GTi away from specialist dealers and club forums. You may have to be patient, but the MK2 Golf is a useable and highly rewarding daily classic.

Volvo 240 Estate

Top 25 cheap classic cars to invest in

Price guide: £250 – £2,000

Have your green wellies and National Trust window sticker at the ready, because here is the venerable Volvo 240 Estate. For a generation of car enthusiasts, this is where it all began – being transported to school in the back of a 240 Estate.

So well engineered was the Volvo 240, you could still press one into daily service and it wouldn’t even flinch. Loved by the well-to-do and antique dealers, the 240 boasted a huge load area and rear-wheel drive. There are plenty to choose from, so prices are low. For now.

Volvo 480 Turbo

Top 25 cheap classic cars to invest in

Price guide: £350 – £2,000

The elegant P1800 is out of reach and the C30 is too new to be considered a classic. But somewhere in between you’ll find the 480. As the first front-wheel drive Volvo, it has secured a place in history, but it was never really universally accepted.

Which means values plummeted and it fell head first into bangerdom. But look, it has pop-up headlights, individual styling and – in Turbo guise at least – a bit of poke. One for the long-term future.