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What is it Worth?
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Many avid car enthusiasts who go to car shows and cruise nights are often approached and asked the question, "What is that car worth?" This is a hard question to answer as most owners of collector cars did not get involved in the hobby for financial reasons. In fact some would argue that money is the wrong reason to get involved in classic cars at all. This is especially true of restorations when you take into account that most people who restore cars wind up putting more money into them than they ever get in the sale of the car. Value is a hard thing to pin down with any classic car as it is difficult to find any two that are 100% identical. In essence any car is only worth what buyers and sellers agree it's worth. Some owners would consider the question of, "What is your car worth?" to be a rude one, equivalent of asking a person how much money they make.
Very few cars could actually be considered an "investment" in the true sense of the word. Only a few cars might actually qualify as investments in that they not only hold their value but gain value (Dusenbergs, '57 Chevy's, Bugatti's etc) especially when restoring them. Yet every so often when the stock market goes down speculators tend to enter the hobby looking for investments or at least a hedge against inflation (like gold is). These speculators are not necessarily "car guys" or interested in cars per-se and speculators have also shown up in other collectible markets such as art, antiques, and jewelry. Some do make money but most speculators in classic cars loose their shirts as this hobby has an unfortunate tendency to take advantage of those who don't know what they're doing. The real damage done by speculators to the old car hobby is that speculation tends to drive up costs of participation for everyone in it. Your average hobbyist will probably not be able to retire by selling off his antique cars and more likely they will be sold off by his estate when he dies. High costs that create barriers to entry into the hobby may also mean that younger people may not take the place of the last generation of car enthusiasts, thereby creating the possibility that there may not be a classic car hobby in the future, or that it will become only a hobby of the wealthy. The irony in that is many people got into old cars in the first place because it was a cheap hobby for a working man and they couldn't afford to buy a new car.
The worst offenders of price inflation through speculation in the classic car hobby are the major auction houses like Barrett-Jackson. Such entities create a circus-like atmosphere in the marketplace for wealthy buyers who go on television and bid up old production cars to obscene prices. Sometimes comparable cars to the cars being auctioned can be found for a fraction of the final bid price in publications like Hemmings Motor News. Sellers who see the auctions on TV and own comparable old cars sometimes then assume that their car is worth much more than it is actually worth to the bulk of buyers. Barrett-Jackson buyers represent the top end of the marketplace. Some sellers who own very junky examples of cars that were auctioned off on TV also inflate the price of their cars to laughable levels.
The bulk of the cars that are in demand in the hobby today are muscle cars of the '60's and '70's. As a general rule buyers want the cars they thought were cool as kids but were too young or too poor to afford at the time. Most such buyers now are in the 40-60 age bracket, established, and have more disposable income to finally buy those cars despite their increasing value. Not all those cars are necessarily rare either some are very common production cars, yet the marketplace has decided it likes them.
One other appeal of an antique car to buyers is that unlike buying a new car, you do not have the staggering level of depreciation that new cars are subject to, even if the antique car you buy looses value while you own and use it. New cars depreciate the very moment you drive off the dealership car lot. In many states antique license plates are cheaper than standard license plates, although it is assumed that you are not using an antique car as daily transportation.
So if you're thinking of getting involved in the old car hobby the question is not, "What is it worth?" but rather "What is it worth to you?" Be prepared for a big learning curve and buy a car because you like it and not because someone tells you it is an "investment." Be okay with it, if you get stuck with the car and are unable to sell it, because that is a distinct possibility. Once you decide what car you really want it actually pays to pony up the membership costs and join the car club associated with your chosen Make of car. You may even find cars that are not for sale on the open market.
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