For some of us, our hobbies can be more than just a way to pass the time-- they can also end up earning a pretty penny. In a four-part series, we take a look at how to cash in on your rare collections.
Photo Source: Reuters
The collectible car market is fueled by rarity. “It is about the number of cars made and options, such as power steering, brakes and windows,” says Denny Terzich, founder of ProRides and former portfolio manager at the Collectible Car Investment Group.
Collectibles are not just limited to American cars--foreign vehicles, such as the Ferrari 250 GTO, of which only 39 were made between 1962 and 1964, make up the higher end of the market.
“One-offs, or custom coach built vehicles, will always command a good selling price because there literally is nothing else like them in the world,” says Craig Jackson, chairman and CEO of Barrett-Jackson, a collector car auction house.
“The high-end of the vintage car market has done very well the past few years,” claims Keith Martin, publisher of Sports Car Market Magazine, “The prices of cars worth a quarter of a million and up have gone up 20 to 30% minimum.”
The very high end of the market--cars worth more than $5 million-- is also flourishing. A 1957 Ferrari 250 Testa Rossa sold for $16.4 million last year at a car auction held by Gooding & Company.
At Barrett-Jackson, they are seeing “big gains in pickup trucks, prewar classics and resto-mods, which are typically muscle cars that have been retrofitted with modern engines and drivetrain components.” The top seller at a recent January auction was a 1948 Tucker Torpedo, one of 51 ever made, which sold for $2.9 million, according to Jackson.
The lower end of the vintage car market has not experienced much success recently. “The market for cars under $50,000 has been very soft since the whole collapse of economy because a lot of those cars were bought with home equity loans,” says Martin.
Baby boomers have entered the collector-car market and are gobbling up the muscle cars of the 60s and 70s that they grew up around. “Results of $1 million to $2 million for the rarest muscle machines have become more common,” says Jackson, “More established collectors favor prewar classics, grand cars like Bugattis, Bentleys and Duesenbergs that represent a long-forgotten artisanship. European sports cars like Ferraris, Maseratis and Aston Martins are also much sought after.”
Just like watches and handbags, knock-offs pop up among collectible cars too. Jackson of Barrett-Jackson, recommends buyers make sure a car has all of the proper markings of the real thing by checking with the historical society for a particular marque or the manufacturer to ensure the VIN number matches the make and model.
“Another thing to look for is matching VIN numbers on the engine block, dashboard and inside the driver's door sill,” advises Jackson, “Make sure that the car is in good physical condition, that it looks the way that it is supposed to historically.”
Originality will also impact the value of the car. Prospective buyers will want to know what body work has been done to the car that could devalue it.
Buyers can compare the pricing to other similar cars by using websites such as Keith Martin’s CollectorCarpriceTracker.com. Martin reminds wishful buyers, “The carrying costs of a car are high. You have insurance, storage and maintenance to also consider.”
Photo Source: Reuters
Check Out the Rest of the Rare Collectibles Series
From antique silver spoons to license plates and toy train sets, collections that start as a hobby can quickly grow to become a valuable asset.