PLEASURES OF THE ROAD : Investing for the future: Will the car you own be a collectible 10 years from now? : CASHING IN
Success in plying the collector-car market, say seers and sellers of fine automobiles, is simply a matter of playing the stock market’s basic imperative: Given a lot of capital, a little common sense and patience, high rollers can’t lose.
Consider. You have $1 million in hard cash. You can be sure that IBM or Eastman Kodak aren’t going belly up anytime soon. By betting/investing in either certainty, you’ll be retired to St. Croix in 15 years.
Similarly, sink that million dollars in, say, a couple of screamers from Porsche’s recent 200-car litter of 959s. Or a matched set of Ferrari F40 super cars, final design of Enzo Ferrari, of which only 950 will be built. In 15 years (bearing in mind that in that same wink of time, the value of a Bugatti Royale jumped from $150,000 to $10 million) you should be able to buy St. Croix.
Or as world-wandering Thomas W. Barrett III, grand doyen and gentle dictator of the international-car-auction circuit, once said: “You never pay too much for the right car . . . you occasionally buy too soon.”
But what for us with less money than sense? Where among us--in a Torrance showroom, on the Ventura Freeway, in myriad Recyclers, or in our own garage--sleep today’s buys with promise of becoming tomorrow’s collectibles?
“Whoever suggests the 1988 Fiero GT is probably right,” believes Dean Batchelor, automotive author, former editor of Road & Track magazine and one-time manager of the stunning Harrah’s automobile collection in Reno. “Pontiac chose to trash it when they’d got it just right. There’s a feeling in the industry that we’ll see it (manufactured) again . . . although I wouldn’t want to bet a day’s salary on that.”
Batchelor, however, will bet on the Fiero’s formula for probable longevity. It is a quick, attractive and an affordable car at $15,000. It has a history as Detroit’s first courting of the two-seat market since the Corvette of the ‘50s. Until production was halted this year, the five-speed, V-6 Fiero GT was an enormously popular machine.
And in a recent survey by Road & Track magazine, the 1987-88 Fiero (“I wouldn’t buy one of the early cars, they weren’t that good,” Batchelor warns) was the only contemporary American car tipped as a future collectible. In 12 years, predicts R&T; judge Owen Ward, a collectible-car broker for Symbolic Cars of La Jolla, the Fiero should be worth $40,000. Correction, says David Brownell, editor of Hemmings Motor News. It should touch $60,000.
Batchelor--with Mike Frankovich, a representative of A. J. Risley Imports of Studio City, concurring--also likes the Cadillac Allante. This expensive, two-place convertible was introduced last year for those wanting to buy domestic while indulging a secret longing to tour grandly in the European image.
“If you asked me to pick just one car to store in a garage for 20 years, it would be the Allante,” notes Frankovich.
Adds Batchelor: “It is a good car, it has the Cadillac name, it has a (Italian designer) Pininfarina body and it is a rare car because they (Cadillac) aren’t going to build that many.
“Unfortunately, it is tremendously high-priced. But because of that, they are selling slowly, and if you could buy one from a dealer for $45,000, or buy a good used one for $40,000, you could drive it for a long time and not risk losing any money.”
Therein, adds Batchelor, lies the first lesson for those seeking an investment they also can drive daily.
“I would never buy a car that I wouldn’t like to drive for a while,” he advises. “Because if it doesn’t succeed as an investment, you’ll at least be able to enjoy it.”
Experts have developed several other rules of greasy thumb for those searching for a vehicle that in time will accrue more than rust spots and tin worms:
The notoriety of a car, even its ridicule and abject failure, may mean nothing but bucks in the future. Look at prices currently being asked for the Chevrolet Corvair condemned by Ralph Nader, the Tucker closed down by the Securities and Exchange Commission, and the Edsel that was shut out by everybody. Now think hard about the investment potential of a DeLorean.
The corollary of drivability is desirability, and what was fun and popular to own in the past may well be profitable to buy for the future. That’s why 1955-56 Ford Thunderbirds currently are selling for $25,000 and you can’t touch a Porsche Speedster of the ‘50s for under $25,000.
Benchmark cars--in the past they have included the XK-120 Jaguar, the early Corvettes, the T Series MGs, the V-12 Ferraris, the Ford Mustang and especially those tickled by builder-designer-chili-chef Carroll Shelby--are fail-safe propositions.
Whatever we hungered for in our youth but were unable to afford, we will certainly buy the moment our monthly disposable income tops $100. Therefore, nostalgia for the era isn’t the only reason why the Chevrolet Bel Air, the early Corvettes, all the be-finned and be-chromed and behemoth American land yachts of the ‘50s are doing so well in the ‘80s.
Big engines. Small production numbers. Convertibles, before sedans. And don’t, beseeches Rick Cole, president of Rick Cole Auction of North Hollywood and pretender to the Barrett throne, be suckered by standard marques camouflaged as “limited . . . official pace car . . . bicentennial” editions.
“The public gets duped into the ‘classic car’ mode and into buying ‘collector’ cars or ‘limited editions’ that are only that because Detroit says so,” Cole says.
So back to today’s pickings.
There is no doubt, says Drew Donen, a partner in Spectrum Vehicle Auctions of Northridge, that buying the known quality of Mercedes, BMW and Porsche is any buyer’s easy hedge against harsh depreciation. In time, he adds, such cars may even show appreciation. If you can afford to buy them in the first place.
“Yet, there are regular cars out there that the ordinary guy can buy and make some money or at least get to drive a car for nothing,” he says. “The little Chrysler LeBaron convertible is kind of sexy and it’s not big money.
“I think the (Ford) Probe stands a chance because it has a futuristic look about it. In 10 years, when our kids have grown up, that may well be the sexy car they couldn’t afford. The same thing with today’s Corvettes.”
Donen even believes that the Suzuki Samurai--recently accused by Consumer Reports of being prone to low-speed roll-overs--could have legs.
“It’s as cute as heck, now has a history, and its prices can’t go any further down,” he explains. “I just went out an bought a Samurai as a fifth car.”
Barrett, of Paradise Valley, Ariz., well knows the high profits to be made by early, canny selection of the right car. At the Barrett-Jackson auction in Phoenix this year, he sold $30 million worth of collectible cars.
One was a 1966 Cobra 427. It sold for $265,000. Eight years ago it was worth about $60,000. Another was a 1959 Cadillac Eldorado. It sold for $67,000. Five years ago it was worth about $10,000.
“I think the 5.0-liter Ford Mustangs will be something to be reckoned with,” he believes. “But they have to be open, and they have to be a muscle (high-powered) car, and that’s what will eventually bring a third more money.
“The (Datsun) Z cars will surely go well in the future. The (Ford) Probe, the (Cadillac) Allante, the (Buick) Reatta are going to stick around.”
But he says the neoclassics--the replicar Auburns and Porsche Speedsters, the kit-car Excaliburs, the exotic Zimmer Silver Spirits and the Clenets once manufactured in Santa Barbara--are doomed.
“I don’t think they are going to go anywhere,” snorts Barrett. “Ordinary power trains. Plastic bodies. They were just for the neophyte who wanted you to think he was driving a classic.”
Gene Babow of Daly City, a writer for Collector Car News and president of the Assn. of California Car Clubs, is another Fiero aficionado and says he knows people “who have bought them to sock away.”
The Corvette is “another consistent possibility,” the Camaro series from General Motors “may slide in the back door” while the Lincoln Mark IV through VII line “will make it.
“The Ford Thunderbird, especially the current series from 1983 on, has a chance,” he adds. “I’m also starting to lean towards Japan and the (Honda) CRX. You see them zipping in and out everywhere; they are fun cars, and that’s one criterion for being a collectible.”
But if there is one thundercloud in the collector’s crystal ball, it is this: “Looking into the future, says Babow, “I find this funny thing called electronics, the many electronic devices (on today’s cars) requiring specialized instruments and trained personnel for continued operation.
“What’s going to happen when these parts aren’t being made any more? Can tomorrow’s collectors who want to drive their cars cope with this problem?”
For those who may wish to shop among the elderly but not antique cars, and who are prepared to settle for cast-iron power instead of computerized sophistry, there now are the ground-thumpers.
“That’s the muscle stuff of the ‘60s,” Cole says, “the Oldsmobile 442, the Boss 429 Mustang and the Plymouth Roadrunner. Prices have started to rise . . . but we’re going to see them triple or quadruple in the years ahead.”
The 1970 Plymouth Barracuda Hemi, he believes, will move from today’s $20,000 to $75,000 or more in the next decade. So will the Shelby GT500 Mustang convertible. The 1966 Pontiac GTO (now $15,000) should top $50,000. And the big-block 1967 Corvette Sting Ray will rise, Cole says, from its current $25,000 to $100,000.
But Cole sees no future legends in today’s bread-and-butter cars. He says that they are overproduced and design-uniform, quite long on cushioned performance and very short on character.
Yet Cole, by his own admission, could be wrong.
He remembers his first car, a 1971 Triumph TR4. He bought it for $2,000 and sold it for $800.
“It’s now worth about $6,000,” Cole says.
COORDINATOR: ROBIN TUCKER
