Like so many other investment opportunities, the risks are high with a collector car. There are rewards, but they don’t come easy, as a return on your investment could be years or decades away, or it may never come. Don’t let a few seven-figure showboats at the big auctions give you gold fever — the value of a collector car is based on a lot of factors, including its condition, rarity, equipment, originality and provenance, but it all essentially boils down to how many people want one when it’s available.
Case in point: a San Francisco museum put 29 of its immaculate 1929-1962 classics up for auction in the summer of 2019, and only 15 met their reserve. Twenty years earlier, many of these cars would have sold for amounts in the high six figures or even upwards of a million. The market simply moved on to more contemporary classics. No matter what you have or want to buy, you’ll need to take shifts like this into account.
Buying Your First Collector Car
Buy and Hold
When you find a car you’d like to buy, be sure to care for it meticulously. You’ll also want to make sure any replacement parts are from the original equipment manufacturer. Once you’ve made your purchase, maintenance and originality are the only factors tied to the eventual value of the car that you’ll really have any control over. Otherwise, all you can do is hope the value climbs and stay on the lookout for potential buyers.
If you’re buying new, you’re really playing the long game. The new car will likely take some time to attain collector car status, and that will only come after a decade or more of initial depreciation as “a used car” followed by a slow climb to its eventual value.
Some predict that a car like the Lexus LC 500, pictured here, might one day be desired by collectors. It’s rare, fast and beautiful — an instant classic, so it’s just a matter of time before this car will pay for itself, right? Maybe.
Consider this example: In 1964, a person buys a brand-new Corvette for $5,000. They keep and maintain it well over a period of nearly 60 years, and then they find out it’s climbed in value to $50,000. That sounds great until you factor in inflation and realize that $5,000 in 1964 is about $42,000 in 2021. Add in the costs of ownership and it comes out to a loss, not a gain. And best not to think about what that money could have turned into if invested in the stock market over those six decades.
On the other hand, that person will have enjoyed 57 years of owning and driving a very cool car, and that’s definitely worth something as well. Only you can put a price on that experience.
Pick and Pounce
If buying new isn’t your thing, the other approach is to let someone else do the waiting and then buy in just before you think a particular car will begin its ascent to collector car status. Then you can ride the wave as the price goes up — if it goes up.
This is where market awareness and careful research come in. Start by figuring out what you’d like to own, and then begin monitoring for a steady increase in values. Auction houses and collector car insurance companies publish values and auction results online, so that could be a good place to start.
Right now, the heat in the market (which was severely disrupted by COVID-19 pausing a year’s worth of auctions) is for cars from the 1980s and 1990s. Depending on your age, you might think that makes perfect sense, or you might understandably think they’re too new to be “classic,” but buyers who dreamed of these cars in their teens and 20s are now in their 40s, 50s and 60s with some extra money in their pockets. They’re going after cars like:
- 1993-1998 Toyota Supra
- 1997-2001 Acura Integra Type R
- 1998-2002 BMW Z3 Roadster
- 2000-2009 Honda S2000
Hit ‘Em Where They Ain’t
For the safest path, put enjoyment over investment and shop around for affordable classics. This could mean a vintage Beetle, a non-fire-breathing first-gen Mustang, or an orphan like an AMC or Studebaker.
A collector car can be the best of all worlds: transportation, a hobby and an investment, and it’s probably best to keep your priorities in pretty much that order. Drive it to enjoy it. Appreciate its beauty. Dedicate what spare time you can to it. By taking this approach, any extra money you might eventually bring in with it will just be a nice bonus.
Check out all the body and paint supplies available on NAPA Online, or trust one of our 17,000 NAPA AutoCare locations for routine maintenance and repairs. For more information on classic cars, chat with a knowledgeable expert at your local NAPA AUTO PARTS store.
Photo courtesy of Wikimedia Commons.
Mike Hagerty is an automotive journalist whose work has been featured on radio, TV, in print and online since 1997. He's the Publisher and Editor of MikeHagertyCars.com, and contributes car reviews to the Los Altos Town Crier and losaltosonline.com. Previous outlets have included KFBK and KFBK.com in Sacramento, California, the ABC television affiliates and Hearst-Argyle and Emmis radio stations in Phoenix, Arizona; AAA magazines for Arizona, Oklahoma, Northwest Ohio, South Dakota and the Mountain West and BBCCars.com.