Last updated: Mar
22, 12:34 AM
If you want to spend a lot of money
to restore an old car and call it an "investment," some financial
specialists say go right ahead.
Just don't count on that chrome-laden toy to build your wealth anytime soon -- or at all.
Donna DiMaggio, a Daytona Beach financial planner, said she encourages her clients to make vintage cars or any other collectible a part of their overall financial strategy if it's a hobby that gives them pleasure.
"The client may be better off by investing in something they have knowledge of and experience with, rather than investing in something they don't know or care much about," DiMaggio said.
Ormond Beach investment adviser Joseph Meyer drives a 1988 Rolls Royce but still misses a 1970 Cadillac Coupe de Ville he owned for 16 years. Meyer said high-end vintage cars tend to climb in value over the long run.
"The advantage of the truly classic cars is that they can appreciate 10 to 15 percent a year," Meyer said. "You don't see wide fluctuations in prices for models that are really rare."
Such advice has an especially appealing ring for car buffs who have been pounded in the stock market. Stocks overall have lost almost half their value over the past three years.
For people with spare cash and a hankering for collectible cars, buying opportunities beckon in the Daytona Beach area this weekend and in weeks to come. The Spring Daytona Beach Car Show at Daytona International Speedway, today and Sunday, gives buyers more than 1,200 vehicles to choose from.
The Centennial of Speed celebration, which starts Wednesday and continues through Friday in Ormond Beach, won't have any organized car sale or auction. However, collectors have signed up to display scores of pre-1920 vehicles, giving browsers a chance to see some specimens valued at $1 million-plus each.
And on April 26, the Kruse International auction company will liquidate the Klassix Auto Attraction in Daytona Beach and more than 100 of its collectible cars and motorcycles. The sale features a number of cars made famous by movies and television shows. (For a partial inventory, check http://www.kruse.com/).
Veteran collectors say people can get started in the hobby for just a few thousand dollars but they probably will end up spending much more if they aim for a complete restoration.
Kim Willis, who restores old cars at Kim's Auto Service in Daytona Beach, said a typical medium-priced rebuilding job will take several months and cost in the $20,000 to $40,000 range, depending on the scarcity of parts. A top-shelf restoration often costs $50,000 or more.
Willis has spent about $40,000 on parts for his own personal obsession, a red 1969 Plymouth Road Runner 383.
If he had to sell it tomorrow, would he make any money on it? "No, but if I'm lucky, I might break even," Willis said.
Kruse's 2003 auction price guide shows that a 1968 Road Runner sold last year for $43,500, but several other similar models sold for half that amount.
When it comes to selling a vintage car, it may take years to get close to the price you're looking for, Meyer said. Many sellers will put their car up for auction several times before finally settling for a price that may be thousands of dollars below their original target.
Prices lately have tended to favor the collector, said Stephanie Hartsell, spokeswoman at Kruse's headquarters in Auburn, Ind.
"Our auction business has been very strong this year," Hartsell said. "We're selling a higher percentage of the cars we offer for bid and we're getting higher prices than ever before. "
But the hobby remains a high-risk financial gamble, warns Richard Lintenella, editor of Hemming's Motor News, a magazine for car collectors.
"We strongly advise against anyone getting into this as an investment," he said. "Sure, some prices are going up but others are going down. There's nothing really to judge the overall market by."
Several area collectors said they're confident that most of their vintage cars are rising in value, but they have no intention of selling them.
Charles Lichtigman, president of Charles Wayne Properties, got hooked 25 years ago. He now owns a 1927 Nash, a 1929 Packard Phaeton and a 1962 Bentley.
Lichtigman, who keeps track of his hobby's expenses, says his results are mixed. The Bentley cost him $15,000 and now is worth about $24,000. The Packard, however, is worth less than what he paid for it.
"When I went into car collecting, I justified it to myself and to my wife as an investment," he said. "But you're probably not going to do well unless you can get a real buy on a car."
The lure of the bargain is what motivates Charles Pike and his sons to keep their garages filled with old Fords. The retired Ormond Beach computer engineer and his family now have about a dozen Fords in all -- Model As, Model Ts, Mustangs and Thunderbirds, "plus a couple of more in pieces." Some were acquired for just a few hundred dollars.
"I keep buying them, but I don't ever sell them," Pike said. "I just give them to the kids."