I recently gave a talk on buying a classic or collectible car at a men’s group.? Here is is what I said:
When it comes to buying hot rods and classics, you hear a lot of rules. Some are good, some are so-so and some are lousy. I?m going to give you mine and let you decide how to rate them. For you who already know all this already, sorry ?bout that. Don?t shoot me, I was asked to do this. Anyway, here are my rules.
First rule: If you?re buying a classic car or hot rod, don?t assume the experts know what it will be worth in a few years. When I got into hot cars, they weren?t classics. They were what I drove every day. I had a ?67 Jag XKE roadster that I sold for $3200 and thought I made a killing since I?d paid $1300 for it less than a year before. Then I had a ?70 Hemi Roadrunner that I sold for $2000 and thought I?d really scored since I?d paid $1400 for it two years before and it had been my daily driver. In average condition, both cars are worth in the six figures now. Since when I owned and sold them it was during the original gas crunch of the ?70’s and the Hemi ?s mileage was in the gallons-per-mile if you put your foot into it, few expected them to go up in value at that time. However, if hindsight were foresight, we?d all be rich. Then again, I knew a guy who bought an ?81 Delorean for 17k when it was a couple of years old because he expected the value to skyrocket and the average value is now 22k and another guy who bought a ?78 Corvette Pace Car new for almost 25k and parked it after driving it a few years, expecting it to be worth it?s weight in gold, but it?s only now worth a few thou more than he paid for it. Even at the lousy interest rates lately, they would have done better putting the money in the bank. Although we?ve seen the value of some cars shoot for the stars again, if the stock market crashes like it seems to be doing now, their value will too. Buy a car because you want it, not because you want to make money off of it. They?re not money in the bank, but movable works of art. Be wise in how you buy, but do it for the fun of driving the car instead of as an alternative to buying a rental property.
Second rule: Don?t rebuild it yourself. Now if you?re a mechanic and painter, bought the car at an absolute steal or have a friend who can do all the work for a pittance, then go for it. But the best way for the average guy to get in the hobby is to let the other guy do the work and buy it cheaply. Even the guys who do all the work restoring a car themselves will many times get pennies per hour for their labor, if that. If you have the skill to do the work and love doing it, that may not matter. Cars are a passion and, like most passions, have little to do with reason. Of my three cars that I restored, I have one break-even, one slight profit and one home run, when factoring in my labor. But I was lucky. In the future, If I buy another car it will buy ready-to-cruise. You may get people who say that they would not have been able to get the car they have in the way it was restored for the price they paid, and I will not dispute that. But could they sell it for what they have into it without finding the perfect buyer? Remember that finding perfection on this earth is about as hard as finding New Old Standard parts for a Duesenburg. I personally know a guy who built a beautiful show car with all the best stuff and had it for sale for over a year with no serious offers. It finally sold at an auction to a porn actress for over100 grand less than he spent on it. He said, ?I don?t even want to know what?s going on in that back seat.? Unless you love turning a wrench and using a sander, my general rule now is to buy someone else?s labor on the cheap. Unfortunately, I?ve never followed that rule.
Third rule: Everybody lies. I don?t really believe that is always the case, but Dr. House often said that on his TV series and it has an element of truth. When you?re buying a car, assume it?s a lie. No matter how good it looks, check it out. If the car doesn?t have a fiberglass or aluminum body, bring a refrigerator magnet to check out the body. If there?s bondo, the magnet won?t stick. It?s a quick and easy way to check for prior repairs. Bring coveralls, a creeper, a light and a mirror. Check out the frame, underbody, inner fenders and suspension. Look for rust, poor repairs and rotted bushings. If the owner doesn?t want you to do that, walk away immediately. Ask for receipts on all repairs and rebuilds the owner claims were done. While I won?t say he?s definitely lying without them, I wouldn?t put my money on his word. Check under the car for drips. If it?s dripping then, it will likely do a lot worse when you drive it home. Even a car that has been detailed can reveal its dark secrets if you look carefully. While still overseas, I bought my ?72 Vette from a friend here who claimed he knew the entire history of the car and that it ran like a scalded dog. Supposedly, the interior was in great shape, all the chrome had been redone and all parts were there. I took his word for it. He lied. The rockers were tightened with no lash on solid lifters, the interior was bad, the chrome was shot and the boxes of parts had many omissions. I still have the car, but our friendship suffered a fatal blow. I just had to put a lot more time and money into it than I expected. The worst stories I?ve heard are eBay cars that were not checked out by the buyer. If you can?t check out the car yourself or do not feel qualified to make an educated evaluation, hire a professional. A cost of a couple hundred is better than a loss of a couple thousand, or more. It hasn?t happened to me, but has happened to friends, car guys who dropped their guard.
Fourth rule: Avoid emotion. Auction cars are the most dangerous because you often have little time to properly check out the car and problems can be hid. Caught up in auction frenzy, you can bid on car without properly checking it out. While I have heard of great deals at an auction, many are not. I speak from experience. I bought an ?65 Impala convertible that looked great. I hadn?t planned on bidding, but it looked so good, sounded so good and was going for so little that I threw in a bid. I got it. It was not until careful inspection that I realized some almost-hidden rust issues and suspension problems. Emotion cost me a couple of grand, because I fixed everything before I sold it. Well, that and I bought it right before the stock market ?readjustment? of 2008. The double whammy of car investing. The same is true when buying from a dealer or individual. While I would normally advise against buying from a dealer, it can work if you know the value of the car and don?t let your emotions rule your brain. Remember that there is always another ?67 El Camino big-block out there and be ready to walk away. The trump card for the buyer is ?no.? Be ready to use it.
Fifth rule: Know why you?re buying the car. If it?s just for an investment, I?m not the guy to talk to. I?ve made good money on most collectible cars I?ve bought and sold over the years, but I often sold too soon or walked away from one I should have bought because it didn?t appeal to me. If you?re buying a car because you like it, then consider my previous four rules. Normally, at least you won?t lose money if you sell. However, this is too often where emotion over rules the mind. Even if a car has no expectation of going up in value and is going to take a lot of work, you might want to do it. While I am not one of those ?the journey is more important than the destination? guys, you can build the car you want, the way you want and have the satisfaction of doing it yourself. In my nine years of writing my car column in The Union, I?ve heard a lot of different stories about why someone bought or built a certain car. Often the story is not logical. But what love is? However, just like having STD test done before a marriage, check out that love of your life and know the consequences before you commit. If you think the rust and rot on the car you want is worth the cost, go for it, just like if the woman you love and want to marry has . . . . Well, you get the idea. Go in with your eyes open.
My last rule is on insurance. As a general policy, don?t go with regular insurance companies unless you plan to use the car as a daily driver. Companies like Hagerty?s and Grundy usually give better, more comprehensive coverage for far less than Allstate, Farmers or State Farm. When it comes to paying for a loss, insurance companies have Actual Cash Value, Stated Value and Agreed Value. Only Agreed Value makes sure you get paid what the policy says your car is worth. The other two allow the insurance company to wiggle out of paying you the amount your policy was for. Also, if the insurance company can make your car worth less, they can total it rather than repair it after an accident, even if it isn?t the best for you. Not that they would ever do that. Some companies make you get an appraisal to make sure it is worth that, others do not. There are normally conditions regarding mileage and when you can drive the car for collector policies. Check out the company you use to make sure it is the best for you.
If you were expecting me to tell you what car to buy, sorry. There are too many variables. Do you like foreign or American made? Do you want modern, nostalgic or classic car? Do you want street rod or pure stock? How much modifying do you want? Just like the women we love, there are many choices and not all of us agree on which one is best. You like a blond or a redhead? Voluptuous or athletic? Strategically added silicon or not? It?s all personal preference. If it?s stock, the older the car, usually the rougher the ride and the lower the performance. I wouldn?t dare tie that into my women and cars analogy. A ?40 Ford coupe or a ?57 Vette might look cool, but they were not all that comfortable to drive or ride in for long distances or all that dependable compared to modern cars. That?s why resto-rods, cars that look pretty much stock but have modern running gear and conveniences, are so popular. There?s a lot of debate on how it affects value, but that depends on individual car model and options. Clones have become popular for high-dollar muscle cars, like Hemi Roadrunners that were once plain Plymouth Belvederes and SS454 Chevelles that entered this world as humble small-block Malibus, so watch out if you?re in that market. A clone should cost far less than an original, so get documentation. Finally, the market for later-model cars that were once shunned, ones like the mid-to-late 70’s Trans-Ams, Datsun 280Z?s and the 80’s Pontiac Fieros, have gained popularity while still being affordable. They also have more creature comforts. Just be aware that smog checks are ,done on cars newer than 1975. Although, by law, all original smog equipment is supposed to be on any car, that?s not really checked. So what?s the next car craze? You tell me. I?ve put down a few websites that you can use to establish value of your dream car. Again, these are not perfect. Once you modify a car, which many of us have, it can affect the value positively or negatively. The main thing about a hobbyist car is to do your research and have fun after you buy it.
Here are a few websites that can help you find what a certain car will cost you. You will see that they do not all agree on values, so take them as background information rather than a bible.