NYT article on collecting cars
11-01-2007, 11:02 AM
#1
Jane Bond 007
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NYT article on collecting cars
Take particular notice of the last group......
Originally Posted by NYT
Collecting
Making a Fortune Small in Collector Cars
By DAVE KINNEY
Published: October 28, 2007
TIRED of the stock market’s gyrations? You say that Miami condo didn’t pan out as you had hoped?
Future Shocks for Car Collectors (October 28, 2007) Perhaps, in a flash of financial fantasy, you have mused about riches that would be yours if instead you had invested that cash in can’t-miss collectible cars. Maybe you were tempted by a particular new model that was certain to grow valuable — to buy one and preserve it as a zero-miles example, a shrink-wrapped retirement fund. Collectors even have a nickname for such a practice: pickling.
A look at past financial performance, however, might have you rethinking pickled cars as a road to riches. Few cars deliver a profit to their original owners when inflation, ownership costs and the potential returns of more conventional investments are considered.
One exception is a hot model whose initial demand drives the price well over the window sticker — the Volkswagen New Beetle and Ford Thunderbird were memorable cases — but any such effect is likely to be short-lived.
Here is a selection of automotive investments that fizzled. While some were fine automobiles, they are included here because of their poor performance as investment vehicles.
1963-64 STUDEBAKER AVANTI The last hope of Studebaker’s dying automobile division, the Avanti was a fiberglass-body coupe with handsome styling done by a team working under the famed designer Raymond Loewy.
Any possible windfall for the original Avanti buyers was limited early on: first, the car became an orphan when Studebaker stopped production. Then came the introduction of the Avanti II, a continuation of the original car, albeit with a Chevrolet engine. The availability of a visually similar car, even if it was not the genuine item, has held back the appreciation of original Avantis.
Using the Consumer Price Index inflation calculator at data.bls.gov/cgi-bin/cpicalc.pl, the same $4,445 that an Avanti cost new in 1963 amounts to $30,286 in 2007 dollars. An excellent example, according to the Kelley Blue Book Official Guide for Early Model Cars, is valued at $24,100 today.
1976 CADILLAC ELDORADO CONVERTIBLE The first of the modern can’t-miss automotive investments, this car was promoted as the last hurrah for American convertibles. Impending safety legislation led many to pay huge premiums for cars thought to be the final examples of a breed nearing extinction.
The legislation never came, and convertibles returned. A new Eldorado listed for $11,049 in ’76; recent auction sales for decent examples are in the $25,000 range. Using the C.P.I. inflation calculator, that $11,049 in cash is now equivalent to $40,485. Had the purchase price been invested in a mutual fund that tracked the Standard & Poor’s 500 stock index, it would have grown to $200,000.
1975-76 CHEVROLET COSWORTH VEGA Even the much-maligned Chevrolet Vega flirted with instant-collectible status. One performance version was powered by a twin-cam 16-valve 4-cylinder engine designed by Cosworth, the British engineering firm and racing engine builder. This unlikely combination, with a factory price of $5,916, was deemed a keeper by many owners.
Formerly mothballed examples still exist. A March 2007 sale of a 30,000-mile example in average condition for $8,800 may seem like a tidy profit, but you’d fire any broker who did not deliver a better rate of return over 30 years.
1975-76 BRICKLIN SV-1 The gullwing Bricklin was one of the best cars ever to come out of New Brunswick, Canada. Costing $7,490 new, a better-than-average example can be found today for less than $20,000, according to the most recent National Automobile Dealers Association Classic Collectible and Special Interest Price Guide.
1981-82 DELOREAN DMC-12 With its stainless-steel skin and gullwing doors, the DeLorean looked flashy, but performance from the rear-mounted V-6 engine fell short of the appearance. When introduced, its price was $26,175; the N.A.D.A. guide says an average example will sell for $27,100 today. No wonder so many roam the streets dressed up in “Back to the Future” guise.
1985-91 FERRARI TESTAROSSA The Testarossa was the car to have in the late 1980s, so desirable that it took some luck to find one for sale at its 1987 window sticker of $134,000.
“People were ready to pay $30, $40 or $50,000 over list ” to buy one, said John Levy, a sales consultant with Shelton Ferrari in Fort Lauderdale, Fla. “The more people saw them go up in price, the more they were willing to pay.”
“Then the music stopped,” Mr. Levy said, adding that “a good early Testarossa could be had today for around $50,000.”
1988 35TH ANNIVERSARY CHEVROLET CORVETTE Chevrolet has released quite a few special-edition Corvettes, including Indianapolis 500 pace cars and models for the 25th and 50th anniversaries. One even commemorated the car’s 35th birthday. While 25 is silver and 50 is gold, 35 is coral — endangered, yes, but not something that savvy investors hoard as an inflation hedge.
The same is true for the Corvette’s 35th — interesting, but hardly investment grade. If you had invested your $34,275 at the rate of inflation and walked to work, you would now have about $60,406. A very nice example of one of the 2,050 built will cost you about $21,000 today, according to the Cars of Particular Interest Value Guide.
1982-91 PORSCHE 944 The years have not been kind to the values of Porsches from the 1980s. As an investment by an original buyer, the saddest case of all may be the 944, a front-engine water-cooled 4-cylinder car that followed the tepid 924 in both design and execution. At introduction, the 944 cost $18,980. Today, one in good condition is worth $4,100, according to Kelley Blue Book.
Making a Fortune Small in Collector Cars
By DAVE KINNEY
Published: October 28, 2007
TIRED of the stock market’s gyrations? You say that Miami condo didn’t pan out as you had hoped?
Future Shocks for Car Collectors (October 28, 2007) Perhaps, in a flash of financial fantasy, you have mused about riches that would be yours if instead you had invested that cash in can’t-miss collectible cars. Maybe you were tempted by a particular new model that was certain to grow valuable — to buy one and preserve it as a zero-miles example, a shrink-wrapped retirement fund. Collectors even have a nickname for such a practice: pickling.
A look at past financial performance, however, might have you rethinking pickled cars as a road to riches. Few cars deliver a profit to their original owners when inflation, ownership costs and the potential returns of more conventional investments are considered.
One exception is a hot model whose initial demand drives the price well over the window sticker — the Volkswagen New Beetle and Ford Thunderbird were memorable cases — but any such effect is likely to be short-lived.
Here is a selection of automotive investments that fizzled. While some were fine automobiles, they are included here because of their poor performance as investment vehicles.
1963-64 STUDEBAKER AVANTI The last hope of Studebaker’s dying automobile division, the Avanti was a fiberglass-body coupe with handsome styling done by a team working under the famed designer Raymond Loewy.
Any possible windfall for the original Avanti buyers was limited early on: first, the car became an orphan when Studebaker stopped production. Then came the introduction of the Avanti II, a continuation of the original car, albeit with a Chevrolet engine. The availability of a visually similar car, even if it was not the genuine item, has held back the appreciation of original Avantis.
Using the Consumer Price Index inflation calculator at data.bls.gov/cgi-bin/cpicalc.pl, the same $4,445 that an Avanti cost new in 1963 amounts to $30,286 in 2007 dollars. An excellent example, according to the Kelley Blue Book Official Guide for Early Model Cars, is valued at $24,100 today.
1976 CADILLAC ELDORADO CONVERTIBLE The first of the modern can’t-miss automotive investments, this car was promoted as the last hurrah for American convertibles. Impending safety legislation led many to pay huge premiums for cars thought to be the final examples of a breed nearing extinction.
The legislation never came, and convertibles returned. A new Eldorado listed for $11,049 in ’76; recent auction sales for decent examples are in the $25,000 range. Using the C.P.I. inflation calculator, that $11,049 in cash is now equivalent to $40,485. Had the purchase price been invested in a mutual fund that tracked the Standard & Poor’s 500 stock index, it would have grown to $200,000.
1975-76 CHEVROLET COSWORTH VEGA Even the much-maligned Chevrolet Vega flirted with instant-collectible status. One performance version was powered by a twin-cam 16-valve 4-cylinder engine designed by Cosworth, the British engineering firm and racing engine builder. This unlikely combination, with a factory price of $5,916, was deemed a keeper by many owners.
Formerly mothballed examples still exist. A March 2007 sale of a 30,000-mile example in average condition for $8,800 may seem like a tidy profit, but you’d fire any broker who did not deliver a better rate of return over 30 years.
1975-76 BRICKLIN SV-1 The gullwing Bricklin was one of the best cars ever to come out of New Brunswick, Canada. Costing $7,490 new, a better-than-average example can be found today for less than $20,000, according to the most recent National Automobile Dealers Association Classic Collectible and Special Interest Price Guide.
1981-82 DELOREAN DMC-12 With its stainless-steel skin and gullwing doors, the DeLorean looked flashy, but performance from the rear-mounted V-6 engine fell short of the appearance. When introduced, its price was $26,175; the N.A.D.A. guide says an average example will sell for $27,100 today. No wonder so many roam the streets dressed up in “Back to the Future” guise.
1985-91 FERRARI TESTAROSSA The Testarossa was the car to have in the late 1980s, so desirable that it took some luck to find one for sale at its 1987 window sticker of $134,000.
“People were ready to pay $30, $40 or $50,000 over list ” to buy one, said John Levy, a sales consultant with Shelton Ferrari in Fort Lauderdale, Fla. “The more people saw them go up in price, the more they were willing to pay.”
“Then the music stopped,” Mr. Levy said, adding that “a good early Testarossa could be had today for around $50,000.”
1988 35TH ANNIVERSARY CHEVROLET CORVETTE Chevrolet has released quite a few special-edition Corvettes, including Indianapolis 500 pace cars and models for the 25th and 50th anniversaries. One even commemorated the car’s 35th birthday. While 25 is silver and 50 is gold, 35 is coral — endangered, yes, but not something that savvy investors hoard as an inflation hedge.
The same is true for the Corvette’s 35th — interesting, but hardly investment grade. If you had invested your $34,275 at the rate of inflation and walked to work, you would now have about $60,406. A very nice example of one of the 2,050 built will cost you about $21,000 today, according to the Cars of Particular Interest Value Guide.
1982-91 PORSCHE 944 The years have not been kind to the values of Porsches from the 1980s. As an investment by an original buyer, the saddest case of all may be the 944, a front-engine water-cooled 4-cylinder car that followed the tepid 924 in both design and execution. At introduction, the 944 cost $18,980. Today, one in good condition is worth $4,100, according to Kelley Blue Book.
11-01-2007, 11:14 AM
#2
Cast Iron Man
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Ouch!
That's OK though. Our cars are one of the best kept secrets around with a lot of bang for the buck! And most of us could mop the streets with most of the other cars mentioned on that list!
Of course cars are a poor "investment vehicle". Most depreciate 40-60% in the first 4-5 years. According to the book 'The Millionaire Next Door' most wealthy people buy used and drive the wheels off them.
If you want to make money investing in cars you'd better get a rare one cheap from an ignorant seller or have the money to invest or restore the uber-desirable ones.
That's OK though. Our cars are one of the best kept secrets around with a lot of bang for the buck! And most of us could mop the streets with most of the other cars mentioned on that list!
Of course cars are a poor "investment vehicle". Most depreciate 40-60% in the first 4-5 years. According to the book 'The Millionaire Next Door' most wealthy people buy used and drive the wheels off them.
If you want to make money investing in cars you'd better get a rare one cheap from an ignorant seller or have the money to invest or restore the uber-desirable ones.
11-01-2007, 12:03 PM
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Jane Bond 007
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11-01-2007, 03:50 PM
#6
Burning Brakes
Well whatever, I know that the 944 community is one of the most awesome in car land. And the cars are well kept secrets. Screw resale and screw people who look down their noses. Unlike most 911 guys who buy their cars as an accessory like a watch. Most 944 people I know like to drive. Simple as that.
11-01-2007, 04:52 PM
#7
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The talk about the 944 as if people bought them in the 80's as an investment. Porsche people buy their cars to drive them. The $4100 book value is about what I paid for my 87 NA and it is an incredible bargin at that price.
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11-01-2007, 11:28 PM
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dave kinney writes for sports car market. sports car market and their authors have always said the 944 has no investment potential. this is a revearsal of there long term stance.
11-02-2007, 12:00 PM
#13
Race Director
Well,
Really who would consider the 944 or any Porsche made to a worthy investment. Cars are not investmets. At best you might be able to sell it for what you paid. Of course that goes in the tubes when you consider inflation. Even then holding value is a great thing when it comes to cars.
Still they are not investments. A few rare cars can be investments, but those are not the ones you buy new. These are the ones you buy at the bottom of their value and hang on to if they happen to go up over time.
I can see some guys making money on a 944 if they buy a nice car now and it happens to go up. However the risk is high and even if it does go up the gain will be small.
So don't buy the 944 for an investment. Buy it for enjoyment and if you happen to be able to sell it for what you paid or a bit more be happy.
Really who would consider the 944 or any Porsche made to a worthy investment. Cars are not investmets. At best you might be able to sell it for what you paid. Of course that goes in the tubes when you consider inflation. Even then holding value is a great thing when it comes to cars.
Still they are not investments. A few rare cars can be investments, but those are not the ones you buy new. These are the ones you buy at the bottom of their value and hang on to if they happen to go up over time.
I can see some guys making money on a 944 if they buy a nice car now and it happens to go up. However the risk is high and even if it does go up the gain will be small.
So don't buy the 944 for an investment. Buy it for enjoyment and if you happen to be able to sell it for what you paid or a bit more be happy.
11-02-2007, 01:34 PM
#14
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Cars that you buy for an investment are the truly rare cars - cars that have race history or other spectacular features.
How can you say that a Ferrari 250 GTO, arguably one of the most valuable cars in the world, doesn't have investment potential?
Now, 944s? The will never be an "investor's car". Likely they'll never be worth more than their initial sticker price adjusted for inflation. But they still deserve love... I love mine!
How can you say that a Ferrari 250 GTO, arguably one of the most valuable cars in the world, doesn't have investment potential?
Now, 944s? The will never be an "investor's car". Likely they'll never be worth more than their initial sticker price adjusted for inflation. But they still deserve love... I love mine!
