Revving up returns

By Steve Ladurantaye
Globe Investor Magazine, November 18, 2008
Photography by Bettmann./Corbis


While worried investors spent most of the year running for the exits, investors who prefer vintage automobiles spent more than $200 million beefing up their portfolios at RM Auctions. The Blenheim, Ontario, auctioneer, one of the largest vintage-car specialists in the world, will help collectors buy and sell more than 2,800 automobiles this year, many of them for more than a million dollars apiece. "Despite the current financial climate, outstanding cars will always bring exceptional prices," says RM's managing director, Ian Kelleher. An extremely rare 1948 Tucker sedan, auctioned in August, illustrates his point: The original owner would have paid $800 (U.S.) to drive the car out of the automaker's Chicago factory in 1948, and it last changed hands, in 2006, for $525,000 (U.S.). This year, it received a closing bid of $1,017,500 (U.S.). The experts say that investors should only consider vintage vehicles if they're in it for love. After all, many vintage cars return home from the auction with their original owners. Here are some tips to make sure you pick the right car.

Rarity

Of the 51 Tucker 48s ever made, 47 still reside in museums and garages. "The smartest investors go out and find the best example of the car that exists, so the car will retain its value," says Jim Miller, a collector from Baden, Ontario, who has more than 50 vintage cars. There's a downside, of course: Extremely rare cars are difficult to price. "There may not be a market, even if it's an incredible find."

Documentation

The lineage of the million-dollar Tucker was well documented, with factory paperwork, a list of owners going back to 1971, and up-to-date maintenance records. It was built on Oct. 25, 1948, and was in inventory when the company entered receivership. Without these documents, the car would likely have sold at its asking price, rather than for a $500,000 premium. "You can also get window stickers and sales receipts," says Terry Lobzun of RM Auctions. "Anything that ties that car to its history can add 15% to 20% to its value."

Maintenance

Protecting your investment means preserving the car's authenticity. If the bumper falls off the Tucker, its new owner can expect to pay $40,000 for a proper replacement. The good news is that you probably don't need to invest in a master mechanic-most vintage vehicles are relatively uncomplicated. "Most of these cars are very elementary from a service perspective," says Miller. "There are no computers, and usually they just have fuel problems. It's very straightforward to learn, and most people do the work themselves."

Accessories

Those with smaller budgets can still get in on investing-accessories and memorabilia make up a significant portion of the vintage car industry. A recent find of odds and ends at the Tucker factory included a lighter once owned by founder Preston Tucker. It sold for $1,500.

Guidelines

Classic cars from the 1930s through the 1950s tend to make better investments because of their unique features, original designs and scarcity. "A vintage sports car is one of the hottest segments of the collecting market today," Lobzun says. And a car that was previously owned by a celebrity or used in a movie can sell for more than double its peers, so make sure you run a check on the vehicle's identification and serial numbers. Which would you rather own-the 1968 Ford Mustang 390 CID Fastback that Steve McQueen drove in Bullitt, or the same car owned by some guy from Iowa?