Appreciate Classic Cars? Market’s on a Roll
Some 10 to 15 million people worldwide call themselves car collectors--from the bidder who paid $10.8 million for a Ferrari at auction to the kid who buys a ’59 Cadillac sedan because it’s on the album cover of his favorite heavy metal band.
At the top of the list, according to an article in the current issue of Town & Country, are former Los Angeles Times publisher Otis Chandler; Ken Behring, owner of the Seattle Seahawks, and Ralph Englehart, owner of Las Vegas’ Imperial Palace Casino. Ralph Lauren, Reggie Jackson, Jay Leno and Bill Cosby are also collectors.
Most of the activity in the car-collector field is in cars that cost less than $50,000, however, and at this less expensive end of the market, the prices are appreciating as rapidly as they are at the seven-figure end.
At present, Ferrari prices appear to have peaked, while less expensive Maserati, Alfa Romeo, Cisitalia, Abarth, Lamborghini and Iso models have picked up speed. At the moment, anything red and Italian is hot. Even such obscure models as the Iso Rivolta have gone from $5,000 to $50,000 in less than 12 months.
What powers car-collecting trends? Most collectors crave an automobile that was popular when both they and it were young. The age of envy appears to be 14.
Right now baby-boomers in the 26- to 45-year-old age group are driving up the prices of cars built between 1960 and 1980.
In recent years, collector cars on average have done better than virtually any other investment but not every old car is a smart investment.
High-quality blue chips such as Duesenbergs will always be in demand, while there are high-risk automobiles that are currently overlooked but ought to be in great demand in the future.
All experts agree that vintage racing cars in all price ranges are the hottest collector-car category today and will be for the foreseeable future. A group of experts offer these tips on car collecting:
--Don’t buy a car to restore. Restoring an old car is more difficult and often more expensive than restoring an old house, and it’s easy to get ripped off.
--Don’t buy a 99-point car. Car collectors rate the condition of their cars on a 100-point scale, with the highest 99 points. The difference between a 99-point and a 90-point car may be minor, but the difference in price will not be. And a 99-point car can be maintained in pristine condition for only a year or two before it starts to deteriorate from oxidation.
--Save 10% for expenses. Every old car needs something.
--Go topless. Convertibles are more expensive to buy but appreciate faster.
--Buy from the Sun Belt. Most cars from inland California or the Carolinas, from Arizona and Texas, usually have not been exposed to road salt or coastal condensation.
--Buy originals. A Ferrari with a Chevy engine might be cheaper, but it’s not as good an investment as a car with all the proper parts. Most collectors, especially Corvette and Porsche owners, are almost fanatical about having matching serial numbers for the chassis and engine.
--Buy classic car insurance. One great saving in collector cars is insurance. As long as you own at least one car for each member of the household to use as everyday transportation, you can insure your collector car for surprisingly little.
-- Study up. Becoming knowledgeable in this market is a lot more fun than studying cocoa futures. Classic Motorbooks, Box 1, Osceola, WI 54020, catalogues thousands of books about automobiles.
