As with any investment, buying a classic car can be fraught with pitfalls. Buy correctly, and owning a classic car can be a terrific experience that can also reap a profit when it comes time to sell. Make a mistake, and a classic car can become a money pit that returns little joy and no profit.
Here are 10 tips to keep you on the road and out of financial trouble.
Here are 10 tips to keep you on the road and out of financial trouble.
Think about whether you really want a classic car
OK, this may seem like a no-brainer, but experts say that people who have never driven an older car often are disappointed."Be careful what you wish for,'' says Tim McGrane, vice-president of marketing for Barrett-Jackson Auctions, whose five-day sale in Scottsdale, Ariz., in January is one of the world's most prestigious.
"When people think they want to own an old car, they should carefully think that through. These cars often don't drive as smoothly as a new car. They have a different steering feel, they brake differently, and they often have squeaks and rattles even when they've been perfectly restored.
"A buyer should have a clear understanding of what they're getting into. If they can, they should find someone who has a car similar to what they're considering and at least sit in it and, if possible, drive it.''
Buy what you're passionate about
While there's every likelihood that your collector car will appreciate in value over time, make your buying decision as though it won't. Own a car that will bring you joy no matter what happens to its value. If you buy that 1965 Rambler Marlin only because you think you can flip it for a quick profit, you may be stuck with a car that you don't cherish and then it becomes a sore point."You want to make sure you get the car you really want,'' says Terry Lobzun of RM Auctions. "You're likely to own it for some time.''
Do your homework
Just as you would with a stock or mutual fund, research the type of car you want. Know how many of each model was produced, what the original factory options and colors were.Learn to decode a car's Vehicle Identification Number, which can tell you a lot about how the car was equipped when it left the factory. For the most popular American collector cars, there are books available, such as the Corvette Black Book, that supply exacting details on production numbers, options and VIN codes. The Internet also is a great resource, as are local car clubs.
Beware of counterfeit cars
The truth of the collector-car business is that it's far easier to counterfeit a car than it is to print a bogus $20 bill. VIN tags can be changed; numbers on engine blocks and fenders can be altered.To what point? Consider that a 1966 Mustang convertible in excellent shape and equipped with the rare 271-horsepower "K-code'' V8 can bring more than $30,000, well above the price the same car with a six-cylinder engine would command. But all the parts necessary to convert that six-cylinder car into a K-code car are readily available, making it easy to create a counterfeit.
Extensive research can help guard against getting a fake car, but the best insurance is to look for cars that have good provenance -- meaning they come with lots of documentation about their past, including original window stickers, the chain of ownership and warranty cards.