Have You Ever Made Money On A Classic Car Investment?

I just came across this in an article in one of our Aussie newspapers this evening:

Looking to splurge on an emotional investment that will quadruple your money in 10 years? Forget watches, stamp collections or even fine art. Buy a classic car.

Not just any old banger will do, though. According to the annual Knight Frank Wealth Report released this week, a ”truly investment grade car” bought in 2002 would have appreciated by up to 395 per cent over the past 10 years.

That makes cars easily the best ”passion” investment you can make, well and truly outperforming popular luxury items such as fine art (199 per cent), jewellery (140 per cent) and watches (76 per cent).

The most sought-after cars tend to be Ferraris, with a 1957 Ferrari 250 Testa Rossa holding the world record of $US16.39 million ($A16.02 million). Classic Aston Martins, Mercedes-Benzes and some pre-war Bugattis, Alfa Romeos and Rolls-Royces can also fetch prices in the millions.

Going from that list, it seems the type of car they’re talking about is already out of my reach. It looks like you have to spend serious money before you can make even a little money back. There must be some makes and models sitting just under that imaginary line, cars that will be regarded as classics in the next decade. I have to confess that I’ve had some recent thoughts about spending more than I’d ever usually consider on something exotic. I’m pretty sure the car I’m considering would appreciate in value over time, but it might take a long time for it to really be in demand.

It’s a daunting proposition because exotics, even the ‘affordable’ ones, tend to be older. That means they’re possibly going to be harder to maintain, harder to get parts for (without selling a kidney, at least). We’ve all seen the Mid-Engine Challenge on Top Gear. They spell it out pretty well. “Yes, you can buy a mid-engined supercar for under £10,000 but for heaven’s sake, don’t.”

But what if you spend a little more than that…….?

Have any of you ever had experience with classic car investment? Ever made any money on a classic car? It’s obviously possible, but is it attainable if you’re not super-rich to begin with?

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5 Comments

  1. For every example of money made, how many don’t? Add in your climate controlled storage costs to a hypothetical profit. Plus, to avoid wear and tear, you won’t be able to drive the beautiful thing.

    It is too easy to make fun of cars and investment in the same sentence. So, I’ll stop. And besides, I shouldn’t talk. I own sailboats. Multiple. They are very good at money absorption.

  2. I backed into something that turned into an investment. I have a 1973 Porsche Carrera RS replicant. Swade has ridden in it when he was out in L.A. for the Saab 97x introduction.

    Back in the last 90s I was hot for an early 911 Porsche. I wanted something 74 or earlier so I would not have to fight CA smog inspections. I liked the simplicity of the early cars. i wanted something lihgt. I bought a 1973 that had a fresh egine buit by a famous builder and a 20 ft paint job and body work. Paid less than $20K USD in 1999. I was not a Porsche expert back then, I just liked the car. I also looked at a real RS for $75K but did not want to spend that much [real RS is now $300K to $400k in US auctions].

    My “RS” is my daily drive and I have put 110,000 miles on it since 1999. A few years ago the condition of the body work and a slight fender bender got me interested in a restoration……turned into bare metal restoration job and many months of work and a little more than $10K to do.

    Then I did the suspension, and then the transmission, and interirors.

    I love driving the car, it is the best driving production car Porsche ever built.

    With the real RS valuies in the stratosphere the well done clones are not in the $70K to 100K range! I guess I just lucked out. I can send swade a photo if he wants to post it.

    Parts are not an issue. There is a whole Porsche subculture to call on and many good websites for help. ’73 and earlier is the ticket here. The “long hoods” they are called and the values are still going up.

    I will never sell mine, so I may not see the cash in value….maybe my kids will.

  3. I’m not going to say I “made money” on classic car purchases, but I have come out ahead.

    I owned a 1991 Jeep Grand Wagoneer (the final year of the classic full size Jeep). I’d managed to put about 100,000 miles on the Jeep, turning over the odometer and leaving it showing 85,000 miles. I’d bought it in 1997 for $6500 at about 95,000 miles.

    By late 2000, it had developed a range of mechanical faults, which culminated in a catastrophic cooling failure in traffic, which left me with a damaged block. I had a rebuilt engine (AMC 360) dropped in for just over $2000, but very quickly, that replacement engine also failed, due to a walking crankshaft. The engine’s warranty, got me another installed gratis, but soon this one started to show the same symptoms. A conversation with my mechanic indicated that there was something wrong in the transmission that was causing the issue. Although I question his assessment to this day, changes in my personal life had already gotten me started on the path back to Saab.

    In January 2001, I decided to trade in the Jeep on a 2001 Saab 9-3 SE. I find the car I want at the Saab dealer and bring my Jeep in for the trade. For reasons not important to this story, I find that the car I’ve discussed with the salesperson isn’t at the right dealership at the time I’ve arranged to come buy it. I’m told they’re picking it up and it’ll be there momentarily.

    We wait 3 hours for the car to arrive, at which point I’m told it’ll be at the dealer within the hour and we should start the final paperwork.

    By this time, I’m pretty pissed off, having waited despite having an appointment. The salesman goes out to value my trade. He’s impressed with the Jeep, practically fawning over it (it was, visually, in very good nick). He does his write up and values it at $11,000.

    It’s only when I’m signing off on the documents that I notice he’s written up the Jeep as having 85,000, but since they’ve left me to stew for hours, I’m too pissed off to correct them.

    End of story, I drove a classic old Jeep for 3 and half years, putting nearly 100,000 miles on it and walked away $2500 ahead.

    Of course, when I sold the Saab, I took a similarly sized hit, so karmically, I feel OK.

    Fast forward to 2008. I decide to buy another Wagoneer (yes, I have a problem). This one was a 1983 example with 195,000 miles. I pay, you guessed it, $6500 for it.

    I drive it and put up with its faults (they ALL have faults) for about 20,000 miles until I decide that it’d be nice to have a car that starts and runs every morning. I post ads for it and get some interest, but no actual offers. In the meantime, I find a Beetle Turbo at a local dealer that keeps calling my name. On a lark, I ask the dealer how much he’d give me for the Wagoneer. He tells me that if I buy the Beetle, he’ll give me $9500 for the Wagoneer. Again, I make money on the deal, $3000 this time.

    I’m not going to lie. I’m going to buy another Wagoneer. Just not this year.

  4. Not really a classic, or a car for that matter, but I once bought a 1994 Honda CBR600F2 for $4,700, rode it for nearly 3 years, and sold it for $5,000. Yes, it got serviced plus a new rear tyre and chain at one point, but all in all it was a cheap commuter.

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