They call it investing, but with the way the stock market has behaved over the past few summer months it might be safer to call it gambling. It’s a strange game to play, but everyone seems willing to invest in Wall Street, property, and all other manner of risky endeavor. Our dollar bill says “IN GOD WE TRUST” on it, but nowhere does it say anything about trusting the financial financial structures we have in place because most of them seem about as predictable as the weather here in Cincinnati.
Speaking of Cincy, over the past few months I have been chatting with a group of veteran car gurus about investment options over cups of caffeine at the weekly Cars and Coffee, and a reoccurring theme has been coming to the forefront. All four of these guys have been saying the same thing: Stock markets suck; you’re better off investing in collector cars. It’s an interesting idea, and a few of them seem dead serious about pulling out whatever they have in bonds and investing it all in cooled/heated garages and a crap-ton of kick-ass collector cars.
For as outrageous sounding as it may seem, this actually is a very sound way to invest your money. While everything still revolves around what the NASDAQ and Dow Jones are doing, selling the right car at the right time is a fantastic way to secure some retirement funds. But much like the stock market, there is a strong chance that you will lose big if you don’t do your research, know when to hold, when to sell, and where to put your next dollar down.
Becoming a collector car aficionado is not something that just happens over night. It takes countless hours of studying buying trends and vehicle choices, hunting for obscure parts in all corners of the globe, and then haggling, wheeling, dealing, and hoarding to make sure that the collector cars of tomorrow are getting completely restored today. This cheat sheet will hopefully offer you a glimpse at what goes into properly investing, building, maintaining, and selling the collector cars of tomorrow, because it’s going to take a hell of a lot more than just a clean shell and a few gallons of Stabil to get you comfortably into retirement.
To begin with, let me be the first to say that investing in collector cars is not, should not, be for everyone. This is an expensive, time consuming, dangerous, and headache-ridden way of playing the investment game, and I have seen plenty of people get burned by an investment that they thought was a sure thing, only to find it blowing up in their face like a Ford Pinto when it was time to collect. But if you think that going this route is right up your alley, and are willing to wait a few decades to make your money back, you will find that this path is far more rewarding and fun than anything anyone could ever experience on Wall Street. Remember, a custom 1965 Cadillac DeVille can get driven and enjoyed every day of the week when the weather’s nice, but you can’t cruise to the ice cream shop with your kids in a stock option.
Let’s start with the basics. Since you can’t restore a classic barn-find in your yard or on the street in front of your house, a garage is definitely going to be the first big investment, next to some quality collector car insurance from the guys over at Hagerty. If the car you’re looking to sell for big dividends one day is merely a shell right now, I suggest skipping the heated/cooled side of the equation until it is nearing completion to save you some extra dough up front. Having the know-how when it comes to welding, painting, swapping, and restoring a car is another plus, and if you aren’t interested in tackling this crucial side of the equation be prepared both mentally and financially to hand that prized possession over to a pro.
Once you’ve got a spot set aside for restoring that jewel, it’s time to get down to researching how you want to rebuild it, because customization can make or break a build if it is not done tastefully, whereas restoring a car to OEM specs is almost always a sure bet. Nevertheless, while it may seem like a great idea to buy that Model T truck, it is important to remember that the guys who typically spend top dollar on collector cars are the ones who remember them from their childhood and will typically purchase a vehicle for nostalgia’s sake. Going too far back means that the likelihood of landing a high bid during auction time is drastically decreased due to the fact that everyone who remembers riding in one of these things is likely six feet under at this point.
So knowing what to buy, how long to hold onto/rebuild it, and getting it to market when the auction block is hot are all key components when it comes to cashing in on a piece of automotive nostalgia, even when there is no telling what direction the market may turn from one decade to the next. While buying a few “future classics” like the 2005 Ford GT, first generation NSX, Buick Grand National, and Toyota FJ40 may sound like a wise investment today, there’s no guaranteeing that these vehicles may be worth their weight in sand by 2030.
This leads us to the main reason why investing in collector cars is better than banking on Wall Street stock options. If the economy tanks, and you lose big because your shares aren’t worth anything, what will you have to show for it? Nothing. At least with a cool collector car you have something material, and while it may not be worth much in monetary value, the level of coolness emanating from someone as they pull into a gas station in their turbocharged ’62 Oldsmobile Jetfire is tough to ignore. Remember, the stock market may crash, but keep your eyes on the road and that classic car of yours never will.