Question.... Has anyone really ever made money on a car like an investment

[david b]

Not including dealers, has anyone ever really purchased a car, insured it, paid for storage, maintenance, cost to transport, auction fees etc etc. and come out with more money than they had in the car when you add all of it up? Dont even include the "cost" of money in your calculation. I would love to know because all of my collector friends talk about it but everytime I do the math it is always a cost and not a profit.

I am of the opinion that cars like the GT's are a hobby (a great one at that) and it just costs money. Just depends on how much.

Would be interested in hearing what other people think on this topic.

 

[jaxgt]

Without a great deal of luck or holding the car for a long time, I think it is very tough for an individual to make real money on a collector car. I currently have 3 vintage cars and have sold 3 over the years. I consider myself quite lucky to break even, and that usually requires some fuzzy math on my part to convince my wife I didn't lose any money and to rationalize the whole thing for myself. Only once did I make real money on a car. I only owned it for a few months so mostly luck. Actually the nice profit helped me to buy my GT !

It's pretty hard to time the market on collectible cars, unless you plan on holding them for a long time. Sure, guys who bought Gullwings in the 1970's for $7000 are doing great, but guys who bought muscle cars 5 years ago are eating their shorts. I typically tell friends the best car to buy is one that was over restored for too much money 5 years ago and now on a distress sale. If you have to restore or do a lot of work to a classic, it gets very expensive fast. On top of that, if you factor in the additional things you mentioned - insurance, storage, transport, commission to sell, maintenance etc..., don't buy one to make money. If one buys a car to show at major shows, restoration costs climb exponentially for the pursuit of perfection. Chroming, paint, body work, finding rare parts is a very expensive hobby.

The other comment I'll make is maintaining classics takes a lot of time ! Searching out parts and folks who can work on them (unless you do the work yourself) can be very time consuming. Living in steamy Florida, I enjoy climbing in my air conditioned GT, pushing the magic button and going.

These days I tend to think of classic cars as works of art where my primary enjoyment is looking at them and showing them, and my secondary enjoyment is driving them (after all, they don't typically have A/C and are quite slow). I don't think of them as an investment. If I make money, or don't lose much, I call it a victory.

 

[silver1331]

I look at it differently, I enjoy my cars so its not fair to assume i should get back ALL of those costs - maintenance, insurance, storage etc. thats the cost of ownership and enjoyment. what do you have at the end of a round of golf?

The asset price though is different and i view that (at least with my non daily drivers) as something that hopefully will hold value or appreciate. Like anything its buying it right and having the right asset - I have a mostly original 63 Ferrari that ive made 25% on in the last year. Its not for sale but ive gotten a 2 offers. I have low vin 92 viper (#12 - first one sold to public was #18) that i paid $30k for. Feels like that will be worth more than I paid but if not i dont really care and it doesnt feel like i'll lose much there. With interest rates where they are, id rather keep some money in a 63 ferrari and a 92 viper than treasurys...but thats just me.

 

[tanner]

Jax had me laughing out loud with the fuzzy math bit. That first paragraph is dead on for me.

 

[Sinovac]

Non-dealers can make a bona fide "profit" on some cars but by and large the entire "investment" rationale is something we have invented to convince ourselves and our wives that we aren't making silly purchases. I paid $160k for my GT 4 years ago. I can make 10% all day long on relatively safe investments. Even assuming the GT is still worth $160k (it isn't), I have "lost" about $64,000 in interest (non-compounded interest, no less) and about $7,500 in insurance, registration fees, etc. Although I have not done the calculation, I bet the GT would need to be valued at about $500k 10 years after purchase (it won't) to equal what I could have made in a typical investment, assuming annually compounded interest.

I looked long and hard at an original 289 street Cobra when the prices dipped into the low-mid $300k range several years ago, but I could not justify the purchase. I believed the opportunity cost was simply too high. Even with the increase in the Cobra's value since then, I probably would have only matched my safer investment that yielded 10%/year. Of course I never would have sold the Cobra, and that makes it the WORST investment possible.

Never view cars as investments. Buy and keep them because you love them.

 

[david b]

Non-dealers can make a bona fide "profit" on some cars but by and large the entire "investment" rationale is something we have invented to convince ourselves and our wives that we aren't making silly purchases. I paid $160k for my GT 4 years ago. I can make 10% all day long on relatively safe investments. Even assuming the GT is still worth $160k (it isn't), I have "lost" about $64,000 in interest (non-compounded interest, no less) and about $7,500 in insurance, registration fees, etc. Although I have not done the calculation, but I bet the GT would need to valued at about $500k 10 years after purchase (it won't) to equal what I could have made in a typical investment, assuming annually compounded interest.

I looked long and hard at an original 289 street Cobra when the prices dipped into the low-mid $300k range several years, but I could not justify the purchase. I believed the opportunity cost was simply too high. Even with the increase in the Cobra's value since then, I probably would have only matched my safer investment that yielded 10%/year. Of course I never would have sold the Cobra, and that makes it the WORST investment possible.

I agree with you.

Although making 10% all day long on realtively safe investments, well that is for another discussion. The definition of safety and all day long has been challenged over the last 2 years.

There is also discussion on the board sometimes about buying the parts and storing them and making money down the road on them. I just never can get the math to work.

 

[red gt 1442]

One of the factors that all are missing is that the investment( or making money) is not generated when selling......it is when buying. When you buy a car below market, ( a good deal) that in itself will hold or get better over time. Therefore PROFIT.

Many here have disclosed the fact that buying muscle cars would just be a wash or lose money when selling. Again, it's in the buying not the selling that matters. Anyone buying at some of these auctions (BJ,Russo,etc.) would be very unlikely to be making a profit. In my opinion they are overpriced, overrated, and you really have no idea what you are buying, unless you take an expert for that model along .

If you are buying to enjoy, not caring of the price, then do just that. In reference to the FGT, I believe these cars will not get cheaper (unless the economy goes to pot, then everything will follow suitl) and the low mil one's will bring more, but overall they will generate a profit. Although you might now say, well I didnt buy it to make money, what better than to be surprised and get 2 for the price of one?

 

[david b]

One of the factors that all are missing is that the investment( or making money) is not generated when selling......it is when buying. When you buy a car below market, ( a good deal) that in itself will hold or get better over time. Therefore PROFIT.

Many here have disclosed the fact that buying muscle cars would just be a wash or lose money when selling. Again, it's in the buying not the selling that matters. Anyone buying at some of these auctions (BJ,Russo,etc.) would be very unlikely to be making a profit. In my opinion they are overpriced, overrated, and you really have no idea what you are buying, unless you take an expert for that model along .



Sure buying a car at wholesale will give you a better opportunity to do make money but it just never works out.

If you are buying to enjoy, not caring of the price, then do just that. In reference to the FGT, I believe these cars will not get cheaper (unless the economy goes to pot, then everything will follow suitl) and the low mil one's will bring more, but overall they will generate a profit. Although you might now say, well I didnt buy it to make money, what better than to be surprised and get 2 for the price of one?

Not sure I understand your logic. If you buy the car at a great price, cheap, under market whatever you want to call it do you think when you sell it after factoring in the money you have put into to it to insure, maintain etc.. you will have more money if add up the purchase price and those other items. Keep in mind the tax you pay on the car as well. If so, I would like to see the math. Everytime I do it I just cant get there.

 

[BlackICE]

The odds of making money by collecting cars, is less than holding CA muni bonds!

 

[1827]

Bought mine for invoice less holdback (dealer employee), drove it for a year, 2,000 miles. Sold it for a $14,000 profit. Wish I had never sold it.

 

[RPM217]

Have a NSX buddy that was able to get on the list and get one of the first GT's flipped it for an immediate 50 profit, got another one that he actually drove a few miles and flipped it for another quick profit, I'm not sure, but I think he made 25k on the second one. So, if you're fortunate enough to get one at MSRP when everyone wants to be the first, you can flip and make money. I have a few Ferrari friends that have been fortunate enough to make money on quick flips as well. Hell, people who bought the T-Bird and the Crossover were able to sell them for a quick profit, and later in the product cycle, the manufacturer couldn't give them away. It's all about timing!!!

 

[david b]

Bought mine for invoice less holdback (dealer employee), drove it for a year, 2,000 miles. Sold it for a $14,000 profit. Wish I had never sold it.

In your profit did you include tax you paid, insurance etc... If so great job!!!!

 

[jaxgt]

Actually - I was told that if you owned a car you sell for less than 2 yrs - the profit is supposed to be taxed at ordinary income rates.
For longer than 2 years, one could argue it is capital gains if the car was an "investment".

 

[Steve Schneider]

I bought a 70 boss in 1986 for $7 sold it 2 years later in 88 for $11, when I bought a 19,000 mile 67 GT 500 Shelby for $29 (not sold yet, was recently offered over $150), bought a 70 442 for $12 8 years ago sold it this year for $22, recently bought a GT through my business (reason was after safely investing say $150 in GIC's and then paying corporate tax then personal tax, crunched numbers ended up with 1% end day gain), business gets to right down some value and pays insurance etc, I drive the car, I never drove the GIC's.

 

[FBA]

The only way this car will be worth big money, is in (possibly) 15-20 years or more, when they hit the block...and that's a big maybe. Of course that's just my opinion...

 

[red gt 1442]

Not sure I understand your logic. If you buy the car at a great price, cheap, under market whatever you want to call it do you think when you sell it after factoring in the money you have put into to it to insure, maintain etc.. you will have more money if add up the purchase price and those other items. Keep in mind the tax you pay on the car as well. If so, I would like to see the math. Everytime I do it I just cant get there.

I know that a lot of factors exhist in the equation that I presented. The most important one is of course type of car. A guy loves a 1966 chevy 4 door.........he buys the car for a great price.....2 years later he finds that by selling the car he would be lucky to get his money back, not counting the tax, insurance and maintenance. Ok, in this case you are right. When you factor in all of these things, he actually lost money. Now, let's use the same equation with a 1966 chevy convertible, 427,etc.etc.....this vehicle based on market condition and demand ( they made 157 chevy conv. with a 427 ? ) will definetly go up in value, enough that it should be able to cover all of the expenses you talk about, and still come out with a profit. I guess I am directing this to my own situation, where in all of my life, I can count on one hand how many cars I have lost money on. I try to buy 1st what I like, but factor in the present/future market for that vehicle. If there is enough demand, you can make money . I know that having a crystal ball to see the future might be difficult, but a knowledgeable person ( doing his/her homework) can make it work. When you factor in holding that investment for 5/10 years, the equation will almost always work. Let's say I purchased a Mustang Boss 429 in 2002 for 65K. Had some corrections done for another 20K.......Insured for 9 years at 400. a year average. Now you know what I might have in this car, do you know what the market is right now ? Do you think I can make a profit? The point I might of neglected to mention would be type of car. I presently own about 8 cars with that example in mind....well, do you think I had a crystall ball....LOL

 

[red gt 1442]

The question asked was: Has anyone really ever made money on a car like an investment. I say, anyone can. You can get more specific by asking: Are we going to make money on our GT's? The answer IMO is yes 10 or more years down that road. Just ask some of the people that have multiple GT's, and some who have them in the wrapper still, with hardly any miles on them. NARDO help me out please....(lol)

 

[gtforme]

I am thinking that Carol Shelby made a little money on his personnal cobra , investment cost $0.00 , sale at BJ a few years back $5,500,000.00 , we could only be so lucky someday

 

[red gt 1442]

I am thinking that Carol Shelby made a little money on his personnal cobra , investment cost $0.00 , sale at BJ a few years back $5,500,000.00 , we could only be so lucky someday

Considering that Cobra was 1 of 2 built.......yes, I think he got his investment back, and then some............in today's marked if you do some research there are many cars that could double in 1 to 2 years.........and you only need two things.......one is the $, the other.(s) is somewhere beneath your belly....

 

[GTMikey]

After buying 3 shelbys and a GT in the last 6 years, I can say NO!!! It sure is a great sales pitch to the Mrs. though whenever I get the itch.....