Tuesday, February 11, 2014

Buying a Classic car……..Hind sight is always 20/20!

The old saying “Hind sight is 20/20” is so true and when it comes to buying a classic car for an investment, you better do your homework.  If we only knew then what we know now!  Just think for a minute at the cars that were just average drivers that became an investment goldmine.   I still hear stories of guys who are cashing in their 401K plans to buy classic cars and sit on them as they increase in value.  I’m not sure if I’m ready to go that far with my retirement plans but the numbers do support this as being a smart move in some cases. 

CNN Money just posted an article listing the top 10 dirt cheap collectible cars.  The article outlines the idea that you don’t have to be rich to buy cars that are increasing in value.  The author says with as little as $5000 you can purchase a few cars today that will make decent money in the near future.  One of the examples he gives is the 1985-93 Fox Mustangs equipped with the 5.0 liter V8 engine.

(1993 Cobra Mustang in rare Teal color)

Time coupled with the laws of supply and demand can change the value of a car in good ways and bad, but having forethought at which cars are going to be the most sought after ones is not an easy game to play.  Most of the articles I have read recently say the classic car market is on the move up again after skids over the last three years or so.  This rebound in the market may be due to the baby-boomers being able to go out and purchase the cars they wanted while in high school and college, the difference is now they can afford to buy one fully restored.  Better yet, they can buy one that has the gadgets and toys they wanted to have on it back in the day.

Again I remind you that hind sight is always 20/20 and we all know the cars now that we should have bought.  Many experts suggest that you buy a classic car today that is a good value, but that you also love and can enjoy as you wait for the value to increase.  Another article quoted stats on the 1970’s Porsche Turbo cars fetching approximately $20,000 over what they did just three years ago.  Classic pickup trucks have also been doing very well in the automobile auctions and seem to be bringing more money than ever. 

With all the tools we now have with the internet and websites devoted to collector cars and values, everybody can be an expert.  Collector car auctions like Barrett Jackson, Mecum, and RM Auctions have also kept buyers and sellers informed as to which cars are bringing the most and what type cars are not selling as well.  The only disadvantage to attending these auctions in person is that the excitement and passion can cause to you to make an emotional buy and not the wisest from an investment perspective.

Now I’m not advising you go out and cash in your retirement funds to go buy a classic car, but you might want to consider it as an option.  The more difficult task may be convincing your spouse that the classic Mustang or Camaro you are buying is purely for an investment!  (Good luck with that)