Classic Dreams Can Come True.
Vintage Autos A Solid, Fun Investment
Was it a candy apple red Mustang convertible or a slinky black Corvette coupe that turned your head years ago, when you were young and too broke for anything but a drab sedan?
Or, if you're a little older, do you fondly recall passing, while on your way to school, a snappy yellow 1940 Buick convertible that belonged to the banker's wife down the block?
Those distinctive, now-classic cars may be the autos of your dreams. And, now that you're in a position to afford the classic you once lusted after, maybe it's time to make the move.
The payoffs are the pleasures of driving and owning a classic and maybe even financial gain if you keep the car in good shape. Over the last two decades, classic cars have been solid investments. But don't look to make a killing with a classic car. The amazing 1986 to 1989 run-up in classic-auto prices may never be seen again; speculators and dealers, who mostly fueled the run-up, got burned when the boom market collapsed in early 1990 because the recession was setting in and easy bank loans were drying up. The speculators may never look at another old car again. "The annualized return for (a solid) collector-car portfolio from 1969 to 1990 was 37.77 percent, which is a nice rate for a certificate of deposit with wheels," said Mitchell Kruse, president of Kruse International, a huge, international classic-car auction companyv based in Auburn, Ind., that is holding an auction of about 350 classics at the Volo Auto Museum in Downstate Volo on Sept. 26 and 27.
"The annualized return rate didn't fall much during the market downturn of the last few years, because most cars that experienced a dramatic price drop were exotics, such as Ferraris, which are in a small segment of the market."
There are some good classic-car deals out there, judging by what experts say and by prices in publications such as the venerable Hemmings Motor News. The Hemm
ings monthly contains thousands of advertisements for virtually every classic car sold.Unlike many of today's new cars, the old ones have lots of charm and style. And it's likely that classic cars will provide a bigger financial return than some of today's financial instruments, such as a 3 percent bank passbook account.
Nobody claims to have a crystal ball, but many classic-car dealers and market observers feel prices have bottomed out since falling from the high levels of the late-1980s boom market. During that boom, prices of cars from Jaguars and Corvettes to Ferraris rose to astronomical levels.
Old Ferraris were among the biggest gainers. Ferraris that routinely sold for $25,000 in the early 1980s were changing hands in the late 1980s for hundreds of thousands of dollars. Some sold for millions. Even certain model Corvettes, such as 1960s models with 400-plus-horsepower V-8s, that had sold for a few thousand bucks in 1981 were being bought for $125,000. Speculators made fortunes overnight, with a desk, phone, a list of people with old 12-cylinder Ferraris to sell and a list of buyers.
"Banks no longer are in there rocking and rolling with easy loan money to speculators, and things have returned to normal with classic car prices. We're seeing only gradual gains," said Robert Halpern, general manager of Motorcar Gallery in Fort Lauderdale, Fla., one of the country's oldest classic car dealerships.
"The 1980s boom never will happen again, although certain cars will go up steadily in price," said Bob Grossman. He's a former top international sports-car racer, former Maserati and Lamborghini importer, veteran classic car dealer and owner of Bob Grossman Foreign Cars in Sag Harbor, N.Y. Richard Buxbaum, a longtime Chicago area classic car dealer and owner of Autokraft Restorations in Westmont, said it may be time to buy that old car of your dreams "because the classic car market has bottomed out for sure."
"I say that because, in the last several months, key cars are selling for higher prices again." Grams said owners hoping for late-1980s prices to reappear "finally have tired of waiting." "They're putting their cars - from classic Mustangs to Jaguars - on the market for reasonable prices," he said. "The autos are being snapped up, partly by investors who foresee a market upturn' I've had an enormous amount of business in the past few months."
But buying a classic doesn't mean going out and getting a car just because it's old. You have to do some research, and you have to check the car out.
"The average consumer should be quite careful and bring along an expert before buying," Buxbaum said. "And we're not talking about the "expert" who's taking a high school auto mechanics course or the uncle who knows how to change a car's water pump.
"Look at a classic from the inside out, not from the outside in. Find a place to put the car up in the air so you can comfortably poke around underneath and search for things like rust or a kink in a frame rail from an accident - things that can't be seen otherwise."
Buxbaum also suggested getting as many receipts as possible, covering such things as repairs and restoration work. "Try and find out as much as possible about the car's history. Talk to its former owners," he said.
A car's history is important. If the car has an interesting one, it could become more valuable. "Buy a classic that's as original as possible, and find one with historical importance - a car that shaped the history of the auto," Motorcar Gallery's Halpern said. "Historical cars range from the Bugatti Royale and Ferrari Testa Rossa to the Volkswagen Beetle, original Ford Mustang and Ford Model A. There's a handful of the multimillion-dollar Royales, so they're naturally worth more than the mass-produced Beetle or Mustang."
Chicago Sun-Times
September 2, 1992
Author: Dan Jedlicka
Motors in the melting pot
Ford's recent decision to make its new models "world cars" is sad, if inevitable. The broader the marketing aims of a particular model (and what could be broader than trying to make one car appeal to the world?), the more conservative that car will be. Witness the Mondeo, Ford's latest world car. Although well-rounded in its abilities, it excels at nothing.
World cars will be bland, because they will have to cater for so many different people. Great cars of the past reflected national cultures and national prejudices. The upshot was machines of greatly varying appearances and abilities - and, sometimes, works of true genius. These instances of greatness spurred other car makers, and thus improved cars in general. Without the national foibles of the Italians, the French, the English or the Germans, we never would have had the Fiat Topolino and 500, the Renault 4, the Mini or the Mercedes S-class.
Those little Fiats of the Thirties and Fifties were the world's most space-efficient and technically ingenious small cars, until the Mini came along in 1959. They were tiny for the wholly practical reason that old Italian towns tend to have narrow roads. Petrol in Italy has always been expensive, so they had fabulously fuel-efficient engines; and they were ingeniously light, saving materials and more fuel. Equally, the rough roads and the peculiar needs of the strong agricultural sector led to the French car industry developing unique engineering skills: pave and peasantry equals comfortable suspension systems and hatchbacks. Andre Citroen, arguably the most far-sighted car engineer of all, developed the 2CV so that it could drive across a ploughed field without breaking any eggs carried in a basket. It not only had wonderfully absorbent suspension, but was also versatile (seats could easily be removed to carry small livestock or tools), cheap to repair (simply unbolt a damaged wing and bolt on a new one), light (an air-cooled engine made partly from aluminium) and fuel-frugal. There is no small car today which is as cheap to own, as versatile, as tough or, around town, as comfortable.
The other great seminal French car of the time, the Renault 4, was equally practical and tough. It was a cross between a hatchback and a small estate car, and in many ways a harbinger of both. Britain's class system gave the world its most regal car (the Rolls), a system of badging (L, GL, GLX, etc) which helped, at a glance, to determine the class of a driver even if the basic car were the same, and the leather-and-wood cabin which was the mark of a gentleman's conveyance but is now merely the mark of all Rovers.
The Suez crisis, and the subsequent threat to our petrol supply, helped give us the greatest small car of all, the Mini. Britain in the Swinging Sixties gave the world the Jaguar E-type - a thrusting, sexy, aggressive car, completely in tune with its rebellious times. Once Germans started to earn enough money to buy something better than Beetles, they began building the world's best big saloons: Mercedes and BMWs that whisked along big businessmen and big families reliably, comfortably and quickly. The Germans were the first to build motorways without speed limits, so it is no wonder their cars were fast, streamlined, safe and well- engineered.
American cars were big because the country has the fuel and the space; and because the Americans have long associated size with status. The bigger the car, the greater the kudos. American cars were also the most extravagantly styled: big chrome mouths, big chrome fins, extraordinary colours. Americans have always liked to wear their wealth.
The world car will change this marvellous multiplicity of cultures, of course. Indeed, it is already happening. American cars are getting smaller; Italian cars are getting bigger; French cars are less practical and less comfortable; British cars have less class; Germans are starting to drive more slowly. Some national traits do survive, despite the increasing globalisation of the car business. The French (Peugeot and Citroen, in particular) still make the best suspensions in the world. The British design the best cabins. The Japanese make the best engines (a consequence of their skills in motorcycle engineering and mass production). The Italians come up with the most imaginative designs.
But slowly, surely, those differences are being ironed out. The big car companies continue to swallow the small ones (new Jaguars are being developed by Ford, new Saabs by GM). International engineering solutions are being applied to national problems (which makes about as much sense as individual countries being governed by the United Nations). Flair and individuality are being replaced by corporatism and commercial sense - hang any sense of culture, or national creeds. Mainstream cars will get more boring, as Toyotas start to look more like Fords or Rovers or Renaults. And they will not just look more boring: their engineering will be less different, less innovative.
The recent planned merger between Renault and Volvo was symptomatic of these sad times. Are there two more disparate companies in the world? I ask you. Yet perhaps there is hope. Amid various remonstrations (particularly from the Swedes) against national characteristics and interests being neutered, the deal fell through.
The break-up was probably commercially damaging to both firms. Yet if it means we get another generation of Clios and Twingos and Espaces and Alpines, before Renault is finally neutered in the name of international business sense, it cannot have been altogether a bad thing.
The Independent - London
May 21, 1994
Author: Gavin Green