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Investing in Collector
Cars
Cars
A Simple Help Guide for Those
Looking to get into the Collector Car
Hobby.
Looking to get into the Collector Car
Hobby.
Investing in Collector Cars in a Poor
Economic Environment
Q: Why should I consider spending my limited
income on a collector car?
A: Our 401K's and investments have taken a
beating. Collector cars hold their value even during
tough economic times, and in some cases, their
appreciation is greater than increases in the stock
market.
In Conclusion
If you can afford to get into the collector car market,
this is a very good time as you can get a lot of car
for your dollar. Yes price corrections occur, but this
normally happens to cars that had over-inflated
prices to begin with. Current example of this is the
Dodge and Plymouth E-bodies.
Economic Environment
Q: Why should I consider spending my limited
income on a collector car?
A: Our 401K's and investments have taken a
beating. Collector cars hold their value even during
tough economic times, and in some cases, their
appreciation is greater than increases in the stock
market.
In Conclusion
If you can afford to get into the collector car market,
this is a very good time as you can get a lot of car
for your dollar. Yes price corrections occur, but this
normally happens to cars that had over-inflated
prices to begin with. Current example of this is the
Dodge and Plymouth E-bodies.
What to Look for in a Collector Car
Q: What should I look for in a collector car?
A: There are a number of things to consider, and
not every trait needs to be on the car to make it
collectible. Things to consider are:
- Rarity
- Engine Displacement
- Convertibles
- Options
- Originality
- Low Miles
- Clones/Tributes
- Cars of the 70's and 80's
- Full Size Cars with Large Engines
Rarity
Rarity is important but just because a car is a low
production model does not make it collectible.
Research needs to be done to determine if a low
production model is collectible. Rarity can also
apply to how the car is optioned. A friend of mine
has a 1961 Pontiac Catalina 4-door with a 389
Tri-Power with a 4-speed. This is probably an
extremely rare combination and very valuable.
Engine Displacement
The rule of thumb here is bigger is better, and in
most cases the more cubic inches, the more the car
is worth. But, there are many small blocks out there
that can perform with the big boys. Mopar had the
340 in their lightweight Darts and Dusters and
Pontiac had the 350HO in the lightweight Lemans.
The 302 Chevys and Fords offer fantastic
performance, but they are rare items and tend to be
very pricey. The smaller displacement engine cars
may require more searching than their big block
brethren, but they tend to cost less, can offer similar
performance, and are easier on gas.
Convertibles
It has been said that, "If the top goes down the price
goes up" and this is very true. A convertible will in
almost all cases be more valuable than its hard top
counterpart. Convertibles take more effort to
maintain than a hardtop, and the car will weigh more
than its hardtop counterpart, but when the weather is
nice, nothing beats it.
Options
Options normally add value, but there are those out
there that prefer their collector car to be a low option
performance car, or are only looking for
performance options. This is more a matter of
personal preference, if you like options, then look
for a highly optioned car. Understand that there is
another group that want their muscle car stripped
down, light, and fast.
Originality
This is like money, the more original a car is the
more valuable it is. There has been a recent move
in the collector car hobby to keep cars original
rather than give them a full on restoration and bring
them back to showroom condition. Original
documentation to validate a car is also very
important. The more documentation, the more
valuable.
Low Mileage
Cars that have low mileage tend to cost more, and
they also gain more value over time. If you do not
mind limiting your driving or not driving at all, this
can give you a car that over a period of time, can
become very valuable. High mileage does not
exempt a car from being valuable, but lower
mileage tends to make a car more valuable than a
comparable high mileage one.
Q: What should I look for in a collector car?
A: There are a number of things to consider, and
not every trait needs to be on the car to make it
collectible. Things to consider are:
- Rarity
- Engine Displacement
- Convertibles
- Options
- Originality
- Low Miles
- Clones/Tributes
- Cars of the 70's and 80's
- Full Size Cars with Large Engines
Rarity
Rarity is important but just because a car is a low
production model does not make it collectible.
Research needs to be done to determine if a low
production model is collectible. Rarity can also
apply to how the car is optioned. A friend of mine
has a 1961 Pontiac Catalina 4-door with a 389
Tri-Power with a 4-speed. This is probably an
extremely rare combination and very valuable.
Engine Displacement
The rule of thumb here is bigger is better, and in
most cases the more cubic inches, the more the car
is worth. But, there are many small blocks out there
that can perform with the big boys. Mopar had the
340 in their lightweight Darts and Dusters and
Pontiac had the 350HO in the lightweight Lemans.
The 302 Chevys and Fords offer fantastic
performance, but they are rare items and tend to be
very pricey. The smaller displacement engine cars
may require more searching than their big block
brethren, but they tend to cost less, can offer similar
performance, and are easier on gas.
Convertibles
It has been said that, "If the top goes down the price
goes up" and this is very true. A convertible will in
almost all cases be more valuable than its hard top
counterpart. Convertibles take more effort to
maintain than a hardtop, and the car will weigh more
than its hardtop counterpart, but when the weather is
nice, nothing beats it.
Options
Options normally add value, but there are those out
there that prefer their collector car to be a low option
performance car, or are only looking for
performance options. This is more a matter of
personal preference, if you like options, then look
for a highly optioned car. Understand that there is
another group that want their muscle car stripped
down, light, and fast.
Originality
This is like money, the more original a car is the
more valuable it is. There has been a recent move
in the collector car hobby to keep cars original
rather than give them a full on restoration and bring
them back to showroom condition. Original
documentation to validate a car is also very
important. The more documentation, the more
valuable.
Low Mileage
Cars that have low mileage tend to cost more, and
they also gain more value over time. If you do not
mind limiting your driving or not driving at all, this
can give you a car that over a period of time, can
become very valuable. High mileage does not
exempt a car from being valuable, but lower
mileage tends to make a car more valuable than a
comparable high mileage one.
Clone/Tribute Cars
Clone and tribute cars can give you an opportunity to
own a very rare or low production car, for a fraction
of the cost of an original car. As long as you go into it
knowing that the car is a clone or tribute and you do
not mind that it is not the real thing, they can be very
enjoyable and are much easier on insurance
compared to the cars they are emulating.
Cars of the 70's and 80's
Collector cars of the 70's and 80's are now
becoming the next collectibles. This takes more
research to determine what is collectible as
performance was waning and engines and cars
were being downsized. Some examples are GM
F-bodies from this era. They are showing strong
appreciation, especially the special editions like the
late 70's bandit Trans Ams. Buick Grand Nationals
from the 1980's are also showing strong
appreciation.
Full Size Cars with Large Engines
Before muscle cars became the norm, only the full
size cars had the biggest engines. If you do not mind
putting a bit of weight behind your muscle, you can
get a big car with a big engine for a very affordable
price. Chevy had the 427 Impala SS, Pontiac had
421 Catalina 2+2's, Ford had 7-Litre 428 Galaxies,
Mercury had the X-400 Mercury Marauders with the
429, etc. These cars tend not to get the notoriety that
their intermediate size cousins get, but with some
research you can find a very affordable car that can
seat 5, and flat out haul.
In Conclusion
You do not need to pick a car with most of these
traits as a car with most of these traits would be off
the charts cost wise, and we are trying to buy a car
with limited resources. This is where you the buyer
needs to determine which traits you want, or are
willing to pay for and then look for cars that fit what
you are looking for.
Clone and tribute cars can give you an opportunity to
own a very rare or low production car, for a fraction
of the cost of an original car. As long as you go into it
knowing that the car is a clone or tribute and you do
not mind that it is not the real thing, they can be very
enjoyable and are much easier on insurance
compared to the cars they are emulating.
Cars of the 70's and 80's
Collector cars of the 70's and 80's are now
becoming the next collectibles. This takes more
research to determine what is collectible as
performance was waning and engines and cars
were being downsized. Some examples are GM
F-bodies from this era. They are showing strong
appreciation, especially the special editions like the
late 70's bandit Trans Ams. Buick Grand Nationals
from the 1980's are also showing strong
appreciation.
Full Size Cars with Large Engines
Before muscle cars became the norm, only the full
size cars had the biggest engines. If you do not mind
putting a bit of weight behind your muscle, you can
get a big car with a big engine for a very affordable
price. Chevy had the 427 Impala SS, Pontiac had
421 Catalina 2+2's, Ford had 7-Litre 428 Galaxies,
Mercury had the X-400 Mercury Marauders with the
429, etc. These cars tend not to get the notoriety that
their intermediate size cousins get, but with some
research you can find a very affordable car that can
seat 5, and flat out haul.
In Conclusion
You do not need to pick a car with most of these
traits as a car with most of these traits would be off
the charts cost wise, and we are trying to buy a car
with limited resources. This is where you the buyer
needs to determine which traits you want, or are
willing to pay for and then look for cars that fit what
you are looking for.
Long Term/Short Term Investment
In our current poor economic state, this economy
promotes long term investment. Buying and selling
cars, known as flipping, is very difficult to do now
because of the limited number of buyers. Most
people who buy collector cars right now will be
looking for deals and probably will be holding onto
the cars for 5+ years, or determined by the economy
and when it starts showing signs of recovery.
Market Outlook
This is a buyers market, there is a smaller buyer pool
and because of this, private sellers and dealers are
more willing to negotiate. Good deals can be had
and you can get more car for your dollar. If you watch
the auctions like Barrett Jackson and Mecum, you
will notice that there are a lot of good deals to be
had. As long as our economy is in this state with
credit in disarray, it will be a buyers market.
In our current poor economic state, this economy
promotes long term investment. Buying and selling
cars, known as flipping, is very difficult to do now
because of the limited number of buyers. Most
people who buy collector cars right now will be
looking for deals and probably will be holding onto
the cars for 5+ years, or determined by the economy
and when it starts showing signs of recovery.
Market Outlook
This is a buyers market, there is a smaller buyer pool
and because of this, private sellers and dealers are
more willing to negotiate. Good deals can be had
and you can get more car for your dollar. If you watch
the auctions like Barrett Jackson and Mecum, you
will notice that there are a lot of good deals to be
had. As long as our economy is in this state with
credit in disarray, it will be a buyers market.
Some Collector Car Fallacies
Fallacy 1:
I need to spend a lot to get a lot.
Not true, research is key, you need to know what you
want and what you are looking at, and most
importantly you need to have an idea of what the
market value of the car is.
Fallacy 2:
Collector cars lose value in bad economic times.
Not true, price corrections occur during these times,
mainly on cars that had over-inflated prices to begin
with. Prices seem to decline a bit because the
potential number of buyers decreases. Buyers have
more negotiating power and can work better deals.
Collector cars very rarely ever depreciate.
Fallacy 3:
If I buy a collector car, I need to store it away to
maintain its value.
Wrong, like any machine a collector car needs to be
driven. Routine maintenance and very good detailing
are key to keeping a collector car looking like new.
Fallacy 4:
My wife has the final say on what kind of
collector car I can buy.
Well there might be some truth to this one.
Fallacy 1:
I need to spend a lot to get a lot.
Not true, research is key, you need to know what you
want and what you are looking at, and most
importantly you need to have an idea of what the
market value of the car is.
Fallacy 2:
Collector cars lose value in bad economic times.
Not true, price corrections occur during these times,
mainly on cars that had over-inflated prices to begin
with. Prices seem to decline a bit because the
potential number of buyers decreases. Buyers have
more negotiating power and can work better deals.
Collector cars very rarely ever depreciate.
Fallacy 3:
If I buy a collector car, I need to store it away to
maintain its value.
Wrong, like any machine a collector car needs to be
driven. Routine maintenance and very good detailing
are key to keeping a collector car looking like new.
Fallacy 4:
My wife has the final say on what kind of
collector car I can buy.
Well there might be some truth to this one.
| I hate to do this but we are a litigation happy society so here it goes... Disclaimer Royal Automotive LLC does not promise or imply that by following the information here, that you will make a lot of money investing in a collector car. This is intended for informational use only and is only one source of reference, among many, that deal with investing in collector cars. All purchases, and or sales of collector cars are the responsibility of the reader. |
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Ed Kubiszak-Manager
E-mail: ed@royalautomotivellc.com
Ph: 219-771-9812
See us on
E-mail: ed@royalautomotivellc.com
Ph: 219-771-9812
See us on
