News from The Globe and Mail
Classic cars craze driving up prices
Saturday, February 01, 2003
Looking for a 1970 Plymouth Superbird Coupe? If you'd been at the recent Barrett-Jackson car auction in Scottsdale, Ariz., you could have picked one up. Of course, you would have had to outdo the winning bid, a whopping $145,000 (U.S.).
Vintage cars are hot, and experts say it's largely because of the awful stock markets of late, which makes other investments that much more attractive. Just what is the difference between pricey chrome trophies like the Superbird Coupe and a worthless clunker? Age, condition and rarity are the three biggest factors. Most insurance companies will deem your car an antique or classic if it is at least 15 or 20 years old.
Auction record makers aside, you can get in on the classic car craze for relatively few dollars. For example, you can pick up a 1964 Chevrolet Malibu SS for $19,000 or even a 1930 Ford Model A for $15,500.
Like most investment trends, demographics play a part, particularly the baby boomers.
"They have disposable cash and want to direct it into something they can control," says Dean Renwick, the president of Antique and Classic Auto Appraisal Service, which has six offices throughout Ontario. Last year was his busiest in 12 years as eager buyers called on his seasoned eye.
But like most investments, the most money to be made -- or lost -- is during a bubble, and that's just what happened in the late eighties and early nineties. Prices were booming and brought in speculators; speculators who sometimes couldn't tell a valuable vintage from a dusty beater.
But the price increases of the past few years have been steadier and are much more likely to stick, experts say, noting that these days it's more knowledgeable fans outbidding each other.
"In the nineties, people were buying classic cars because they thought they could make a quick buck," says Rob Myers, chairman of RM Classic Cars and RM Auctions of Blenheim, Ont. "Today a lot of buyers are true car enthusiasts."
Of course, there is a big advantage in investing in old cars. Unlike, say a wine collection that drops significantly in value if you start popping corks, a vintage car can appreciate while you are cruising around town in style.
"The majority of people are buying for the long term," Mr. Renwick says. "Most buyers now are people who want to own that cool car."
So what to look for? Muscle cars from the fifties, sixties and even seventies are hot now, and for obvious reasons. "The baby boomers are driving the prices, and they're buying the cars that they remember," Mr. Myers says.
Other good bets are sporty convertibles like an early Mustang and cars with big "blocks," or engines, says Ken Knight of Winnipeg's Vintage Auctions of Canada. And as long as it's in good shape, odds are it won't turn out to be an automotive Nortel. "Most older cars [the mid-seventies or earlier] are going to hold their value if they're in good condition," he says.
In terms of condition, what you're after is "mint" -- meaning everything is in perfect shape. Like with a stamp collection, you'll pay more for mint, but you'll have a better resale value. You have to do a little detective work, warns Mr. Knight, who suggests looking for a frame that hasn't been rusted or damaged. Surprisingly, mint condition doesn't mean original, merely that it has been perfectly restored. An original vehicle in perfect condition, he says, will typically add a 20-per-cent premium to the price of the car.
© The Globe and Mail