Investing in cars
By Robbie Woliver• Bankrate.com

Sure, the experts say, you can invest in old cars purely for the money.

But why in the world would you?

"We might make money from it, but it's really all about capturing your youth," says Thomas Barhold of Bethpage, N.Y., whose first car was a '54 Chevy that he bought in '54. "You start by returning to the days of cruising the streets with your buddies, and end up making a few bucks off the investment. Not a bad deal."

"You can usually trace the car-enthusiast's interest back to the first car they ever owned," agrees Steven Julian, owner of the Scottsdale Auto Auction in Scottsdale, Ariz. "It was significant to them once, and later in life they can buy one again, unless they were lucky enough to have kept it from their youth. And then they can sell it and make a nice profit."

So when you talk about investing in cars, there's both money and passion involved in the deals.

First step: Research
How does one know what wise moves to make when it comes to investing in cars? It's simple, say many experts: Start with research. Join clubs, read magazines, attend shows and auctions. There are clubs all over the country for a variety of trucks, motorcycles (Harleys hold their value more than any other bike) and cars -- including antiques (pre-1915 horseless carriages from the Brass Era), vintage (1920s nickel cars) and classics, such as the '57 Thunderbird. From Corvettes to Rolls Royces there are clubs, such as the Classic Car Club of America, that offer advice, camaraderie and events where cars can be shown and rated. Many car publications, such as Hot Rod Magazine, can also be found online.

As far as investment value, Julian says that if you do your homework, there can be a quick return of 10 percent to 25 percent. "Many cars can be bought for reasonable fees, from $5,000 up to $40,000," he says. "Of course, other cars can go for millions." Some enthusiasts wait months before selling, others wait up to seven years. Julian says he tries to sell his "as fast as I can, an average of two to six weeks."

Recession deflates market
Sept. 11 and the recession have dampened the market. "It's been a great downfall since then," says Julian. "It's been a dramatic change because the market was so inflated before then. But you know something? People might not invest in several cars at this point, but they will still buy that one car that means something to them, and still make a profit on it, if they buy and sell wisely.

"When you start losing your job, the first thing to go is your third or fifth car. But you'll hold on to the first and second." Prices have dropped 15 percent since Sept. 11, 2001, making it a buyer's market, according to Julian.

"It's like playing the market," he says. "It's tied very closely to the economy. When things like real estate and antiques do well, cars do well." Even some new cars, he says, can be good buys: If it becomes a fad, that sporty car bought at sticker price before its release can be resold immediately at a profit.

But the thrum of an engine, not the heft of a bank balance, is what really attracts people to sink their money into pricey cars. "The best reason to invest in cars, besides the money you can make, is giving in to the passion we all have for cars," Julian says.

What's hot
While there are antique, vintage and classic cars, the 1960s and 1970s cars now dominate the field, making American muscle cars today's investment of choice, he says. "Older investors who were buying the vintage '30s cars of their youth are dying out, and the younger generation is making cars like the Chevelle or the Camaro more popular.

"For these types of cars, the larger the engine, the more it's worth. The big block motor is what drives the price up. Also the condition, style, even the color determines the profit to be made," Julian says.

The danger: falling in love
Don't get too fond of your car, or you'll end up like Barhold, who says it might be difficult parting with his classic.

The proud owner of a 1978 black-and-silver Corvette with 1,200 miles, silver leather seats and a 350 engine, Barhold says he's "gotten quite attached" to his car.

He knew he had gotten a deal with his flashy Corvette because only 6,002 of these cars were manufactured. This was his first investment car, and Barhold, a retired vice president of operations for an electronics firm, bought it after receiving a bonus. In the summer of 1999, he paid $18,500 for the car. He thinks he can get $24,000 for it now, but he wants to show it first, maybe get a first-prize win to pump up its value.

He has put only $600 into the Corvette, and has tried to maintain its original condition because that is one of the most important aspects of value. When he drives the car "to just keep it breathing," he takes to the road very early in the morning to avoid other traffic, and admits that the ride is a little nerve-racking. He is happy to bring it back home and place it safely in his garage next to his red 1989 Thunderbird.

Car clubs for everyone
He agrees that joining a car club is the best way to start in the field of car investment. "It will give you a good sense of a car's price range," he says. But he admits that "If you want it bad enough, you'll pay anything. It's a very emotional type of investment." (There is even a classic car Web site called MotionalMemories.com.)

Read periodicals, Barhold concurs. From Car Collector Magazine to Corvette Fever, you can find some publication that will guide you through the maze. Conduct Internet research; there is much information ranging from the prestigious Kelley Blue Book to the more individualized MuscleCars.net. Barhold also suggests going to car meets. They can be formally held in Convention Halls or can be like South Bend, Ind.'s, Cruise In, which draws 600 cars to a McDonald's parking lot. There is even a National Corvette Museum, in Bowling Green, Ky., which includes nondenominational church services and special events, such as their recent show featuring cars owned by American astronauts.

Proper care and feeding
Once you buy, don't forget to get as much documentation as you can. "I still have the tags that hung on my turn signal," Barhold says. "Keep things like the visor sleeves, instruction books, or even promotional items that came with the car." And, of course, document the sales history. Every little detail can add to the resale value.

"Cars are a very wise investment," Barhold says. "I don't think it's risky at all. You just need to take care of the car. Take a lot of time keeping it shiny and new looking. Don't take the value out of it, and the investment will grow, if you made a wise buy in the first place."