Classic Car Capital

Collector Cars as Investments

By Martin Swig

1937 LaSalle Convertible Coupe Every few weeks we read of a new world record price paid for a collector car. Are these the good investments they’re claimed to be?

I think not. Here’s why.

When I was in high school and college in the late ‘40s, early ‘50s, a car was the centerpiece of a young man’s life. Chevy, Ford and Plymouth – they were all good and created lifelong memories. Then, when you drove your car to Monterey and heard an Jaguar XK120 boom through the old Pebble Beach circuit, you knew where your life was headed.

Much later, MGBs, Mustangs, Camaros, 914s, GTVs and 240Zs were important to us. And now that we have some money, we’re only too happy to write a big check to buy a memory.

Today, kids don’t care about cars. The sound system is more important than the car it’s installed in. So they won’t have significant memories of cars as they get older. And they won’t have any urge to acquire the dream cars of a much older generation.

A few cars, timeless examples of automotive art such as Mercer Raceabouts, Alfa Romeos, Duesenbergs, 300SLs, really good Ferraris, and a few Mercedes and Bentleys, will continue to be desirable as fine art. But a multi-million dollar car that has to be housed and maintained may not look as good as a 7% triple-net lease — that $5 million car could be seen as a loss of $350,000 per year in income!

There’s another function: In the ‘70s, ‘80s and ‘90s, new cars were pretty dull. A great ‘50s or ‘60s car often was a more appealing drive, as well as being better looking. So the old cars were sought after, and bid up in value.

But recent years have seen more really desirable new cars. Do you really prefer a Jaguar XK120 or an Austin-Healey 100 to a new Porsche Boxster? Certainly not if driving qualities matter. Sure, the old car is an admission ticket to events like the California Mille, or various vintage race groups, but I don’t see many young faces appearing to replace the ranks of my generation who are disappearing.

I started having these thoughts when I took my Miata on a tour. A friend brought his DB5 Aston Martin. On ANY road, at ANY speed, the Mazda could easily walk away from the Aston! And the MAZDA is like a cat; it takes care of itself. Old cars always have their hand in your pocket.

Am I taking my own advice? Hell no! Come for a ride in my newest, a 1937 La Salle Convertible Coupe!

[Source: Martin Swig]

Show Comments (31)

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  1. Unfortunately, you’re saying what I’ve observed for some time, the costs of ownership are often-overlooked – storage, insurance, maintenance, physical depreciation (things simply wear-out or die from old age whether you’re driving the car or not) so that you have to own something with the potential for significantly high appreciation potential to beat a well-run mutual fund over the long-run (the past four years excepted!). But life is not all about money – we need to enjoy our time here as well. I guess that’s why my ‘newest’ car is a 1998 Toyota truck with 326,000 miles that parks next to my 1951, 1953 & 1953 Bentleys.

  2. I agree…as a collector of classic cars and wooden boats, we see the same problem in the old boat world…very few young faces…even my on children and grandchildren are only interested in the boats and cars they grew up with….fiberclassics and late model sports cars. We are trying to get young people interested in wooden boats by sponsoring a young group like Boy and Girl Scouts, 4-H etc and helping them build a wooden boat from a kit.

  3. I’ve had an ongoing conversation with my friend about this very subject. We both have an eclectic grouping of automobiles and have noticed the decline in LBC (little british car) car show activity over the last few years which can only be from lack of interest. Those of us who appreciate the simplicity and style of these cars are steeped in the past . I hate the thought that our addiction to cars may be in the process of being “cured” by attrition! Thanks to Mr. Swig for a fine commentary on the subject. As always, Sports Car Digest brings the small car collector the best coverage and points of view.

    ’52 Hudson, ’58 Healey, 83′ 928 Porsche, and a ’97 XK8 Coupe

  4. Martin –
    Respectfully, I think you’re being overly cynical. While I agree that most of the cars of the mid-70’s through the 90’s are, “eh”, I genuinely believe that this hobby has legs. While we may not appreciate the tuner-car crowd, the fact remains that they are graduating from video games to the real thing. I suspect if we could go back to the 70’s, many of the same comments were being made about the muscle-car customizers.

    Enjoyed the piece on you in Octane magazine. Sorry I can’t make the Mille this year – here’s hoping for another successful event! Cheers –

  5. After trying to sell some turn of the century antiques and having little luck finding buyers it appears that the same logic holds true for the antique world today – there is not enough interest by the upcoming generation who want to live in condos near everything in the city or by the beach and have no room for no want old furniture and instead want a flashy new advant garde look in their homes – less is more these days.

  6. I love my car collection predominantly Toyota 2000gt’s and 60’s Ferrari’s for not just the looks and sounds but the smell of them. The gas,wood, grease, exhaust and rubber smells and sounds take me back to when I dreamed of getting behind the wheel and dreamed big to have the ability to get those cars. The modern cars like the new Mclarren do everything better but they just don’t smell like the toys of the past.. The lack of smell is not overcome by the powerful sounds or incredible handling it’s just part of why we love our memories. Our past is always with us, just like our dreams, they never let us down.

  7. Martin, while I too share some of your fears, I am a little more optimistic about the future of the hobby. Growing up my love for cars was indeed strong, but most of my friends at the time were not into cars. I was in the minority. Even today there are kids into cars. Yes their tastes are different than ours. I would not want to be trying to sell a brass era car in another decade but, I believe and early M series BMW will certainly grow in value as the kids that lusted after them growing up will find the funds to acquire one. The California Mille is still on my list of must-do’s. I will make it one of these years. Hope all else is well with you.

  8. Were you watching Martin’s face when he made these statements? The veteran horsetrader must be about to go shopping for some moderately priced vintage machines and he is simply, logically doing his best to soften the market.

  9. I agree that in some areas there is going to be decline, similar to that of old Harleys the guys who were into those are no longer able to ride them and so the prices are tanking. I think the big Iron of the 20’s with tons of chrome will take the biggest hit, I am in the middle Generation at 42, I am an avid Collector, and my taste vary across the board. Currently at 30 cars, I can say that the hot rod and custom car world should have legs for a while but they are not high dollar cars. I still think the high end and rare cars will continue to sell, not as cars but as works of art. For me I am hoping the bottom falls out so I can pick up a few more cars on the wishlist 🙂 Sweet Looking Lasalle, if you find yourself in Santa Cruz look me up.

  10. The situation here in Europe is more encouraging. The classic-car scene is booming and interest in classic cars among young people is surprisingly high. Large classic-car centers now exist in Berlin, Duesseldorf, Stuttgart, and Frankfurt, and two more will be opening in Hamburg and Zurich later this year. We attended the Maastricht show and “technoClaissica” this year, and both were packed, as usual. The Stuttgart “RetroClassics” held two weeks ago was also a huge success. The calendar is full of classic-car shows, rallyes, tours, etc. On any given weekend, there are dozens of events going on around Europe. So, interest is high and appears to be steadily growing. Market prices of classic cars here are growing at an average rate of around 8 % to 10 % annually. At least classic cars do not depreciate, so you can hardly lose money owning one. The pride of ownership and fun of driving them is worth the price of admission.

  11. I just say–Not So !
    Martin, no doubt has a background that would allow him to speak on the subject.
    I agree that many cars are going by the wayside. The Ford model T, many of the classics and the such.
    There are almost as many cars that still have the heart of the young. Most with style and some power for the years they were produced. The Ferrari’s, no doubt, the Jaguar XKE, Aston Martin, Maserati, Corvette, ok Martin-Alfas. Cars that were limited production back in the 40’s, 50’s and 60’s.
    What a number of people don’t take into consideration is the population of the world. Something that now can be reached by computer at the blink of an eye. Our population has doubled in 20 years. Now instead of 2000 buyers being interested in one of 1100 DB6’s produced in a year, there are, through the magic of the internet, 10,000+ buyers interested in the cars.
    The cynics are not considering that they are not that expensive to keep up compared to a DB9 and one with a little knowledge can do most regular service and more, on something like a DB6 or Alfa. Try removing the front end of a Mercedes 600SL to replace the radiator in your garage. We are not even getting into what it takes to service a new Ferrari.
    Not only are these cars going to go up in value because of demand but because many of these cars are now enjoying open road pleasures like Mr. Martin’s fantastic rally in Northern Calif. and the coupes demand are coming on strong. I guess mom has decided that dad is having too much fun. Hey, let’s face it, dad sometimes likes a woman next to him enjoying a week or weekend on the road. So coupes are the newer choice for the comforts of open road use.
    Now for a question.
    When was the last time dad spent time with his kids around the cars? When was the last time he allowed the kids, with or without his watchful eye, take his cars out? I find this is one of the problems. Why would you be interested in anything if you could only look but don’t touch.
    Just no magic. Supply and Demand!
    The young, my children, now 25 and 29 who own an MGA(him) and Lotus Elan (her) will have a fit if I sell my 1967 XKE. Yes, they can take the keys to any of my cars.

  12. Spot on Martin,
    We have been in the sports car business for over 40 years, and other than auction prices that seem to be an anomaly we see good cars struggling to get decent prices. The number of younger buyers seems to be small largely because of the lack of funds not so much lack of interest. That said when buyers can afford the price of admission for an interesting old car they can not afford to do much with them. Lets face it many interesting older cars that are for sale are not fresh sorted restorations, in many cases they are just good cars that have been enjoyed, and perhaps put away for what ever reason or are being sold because a family member fell into poor health and has passed away. Some have been stored for a few years and even when properly stored systems like electrical and brakes as well as fuel systems start to degrade. So many of those cars actually do need some work even if the paint and cosmetics are nice. Money is still an illusive commodity. Most people are not in a position to go out and borrow for that collector car or if they can the cost of the loan is prohibitive.
    Just my take on the market.

  13. I would very much like to agree with Martin because the cars that I love have zoomed up to prices that I can no longer afford. The late Harry Pellow predicted that the ”Gucci Loafer crowd” would ruin the Porsche 356 hobby for all but the wealthy. That prediction has come true. As it has for almost all old sports cars.

    The question before us is whether the current prices are sustainable. This is difficult to answer because old sports car prices have continued to rise with support of the very rich, despite the world wide economic down turn since 2008. Obviously, buyers of Ferraris and even Etceterinis are not much bothered by prices that have multiplied by a factor of ten over the last few years. They have continued to buy in as investments, status symbols, or for just plane fun. European buyers have been leading this trend. I would guess that the upward trend is coming to a halt. If old car owners begin to feel that they need to sell their cars to recoup their money, it could start a downward trend that would feed on itself. Are today’s prices a bubble? Definitely! Maybe! For myself, I am not taking any chances. I am down to one restored 60s sports car from six. What happens if a few owners with 60 cars start to sell?

  14. Like Billy, I very much want to agree with Martin but would argue that what we’re seeing isn’t a bubble for high end cars. The very wealthy that have effectively revalued that market likely won’t be dumping their prizes at bargain prices anytime soon… much as some might wish. For the rest of us, collector cars in general are a luxury and as Mr. Simpson points out, the broader market is soft not for lack of interest, but lack of cash. Every week some new tasty morsel appeals to me. I’m an adherent to Mr. Swig’s maxim to not own more cars than one can keep batteries charged because I can’t afford more. As to declining interest of younger participants in the hobby, some is cultural, some economic. There’s no doubt fewer Gen Y or Xers care about brass era, full classics, post-war excess or even detroit muscle but the demographics of the retro rod, VW and JDM/Tuner worlds are proof the hobby isn’t going away. It’s just changing, and that’s not neccessarily a bad thing.

  15. It’s not just the age of guys that are into old cars, nor the high cost of old cars and keeping them running.

    The environment for driving old cars is not a friendly one. The roads are full in most of California, and the drivers are going fast and doing so recklessly and carelessly. Many of the vehicles are urban attack cars and trucks that can demolish a cherished classic without much effort. Many drivers are high on energy drinks and over-amped music. Many drivers are newly arrived immigrants without insurance, and without good driving skills..

    My MGB got clobbered by a big pickup truck. The driver said he could not see my car as it was so small. Driving an MGTF on Interstate 80 where the other cars are going 80 or 90 mph is quite a harrowing experience.

    1. Don, you nailed it. Even here in southwestern Idaho the environment for old cars is definitely not a friendly one now. I drive a ’29 Model A Ford Phaeton and a ’51 MG TD. The Model A has an overdrive and the MG has been upgraded to a 5 speed gearbox. Both upgrades were done to help cope with modern traffic but have only helped so far. I see the day not far off were we will be legislated off the public roads. In some states this has already started. My son is not interested in cars and I do not want to leave my wife with a garage full of old cars, parts, and tools to have to sell to the circling vultures after I am gone. I am considering selling everything and focusing on affordable modern sports cars like the NB Miata I just purchased. We have entered a new era in the old car arena and as such, much of the fun is gone.

  16. Hi Martin. Certainly see where you are coming from, as the enthusiasts, who used to set the market , driven by lust/masochism, have been super-seeded by ‘investors’. This happened to catastrophic effect in the late ’80’s. This time around,the crash has not happened, and indeed the classic car market has proved one of the more secure places to have any spare cash.
    What happens when those with the serious cash-Russia India and China, even take the most miniscule interest in our little hobby?

  17. New cars dull in the 70’s, 80’s and 90’s? How about Miura, Daytona, Carrera RS, M1, M3, M5, 6.3, 6.9, Turbo 3.0, 3.3, 959, 600 SL, AMGs, McLaren, F40, There are many more that are desirable and in demand from these 3 decades. These cars had modern features with less weight and electronics than todays best cars. Come time it will be appreciated that they are more easily maintained and restored than the modern ones with laminated plastic interiors and very special electronics. I am sure that even some modern cars like a SLS will also become collectors items over the long run – and if it is just for the sound.
    Cheers from Zurich in Old Europe

  18. Martin you had some great points, but I disagree. The arguments you make are from your perspective, and while these are the accepted values that have governed the auto collecting hobby for a generation, I think you could look back to that boyhood fantasy about the auto, and see that enthusiam is still there. I know you dont like steros, I get it, but a generation of car collectors are currecntly passing on thier love of all things automotive as well as thier collections, someone is buying. To declare the Automobile no longer collectible in the hand of today youth simply makes you sound old. Sorry to hit you there, but you lost all credibility with me when you said your Miata pulled away from the Aston DB5, if that happened it did it was due to the driver of the DB5 fear of the tall pedal. I’ve owned both but sold the Aston because it became too valyable to enjoy, still have the Miata (no strero), wait a minute, did I proove one of your points by selling the DB5?

  19. The door of opinion obviously swings both way from what I read herein. What a wonderful expose’ of opinion Martin has stimulated with his thought provoking article.
    I understand Martin’s observations regarding the younger generation, and do not think it pertains to his own son who appears deeply imbedded in his dads passion for these wonderful and iconic works of art. Perhaps he is unique in this, although I think not.
    Selling and collecting classic cars in a College town, the younger generation do in fact notice these cars, are inquisitive about them, and illustrates a reasonable amount of interest in their pedigree.
    It’s true from a generational perspective in selling them, where as dealers, we have to look at generational “brackets” of those individuals with historical and institutional memory. What cars were relevant to them, and at what point in their life? I see this at the Classic car auctions, consciously noting who is buying what, and their age. Often, it’s “all over the map” with no continuity.
    So, is Martin’s analysis of this situation valid.? Partially, however, we are all aware enough, young and old, to understand and appreciate these iconic works of art will probably never be manufactured again, as we observed them in previous years. This, in and of itself, will sustain the market,and the appreciating value of these wonderful cars.
    And like Martin,,,,,, back to my 1951 Hudson Commodore coupe with Twin H Power. I must be old.!?

  20. I agree with these comments. I’m 41 and have been into the classic car hobby for about 8 years now. I started collecting antique clocks at age 15, so I’m a bit of an eccentric I guess. I have owned a 1950 Ford convertible, a 1956 Mercury and am currently building a 1949 Ford coupe. I’m into 1950’s era kustom cars even though I was born in 1970. As part of the hobby I produce a few parts for these cars since worked in automotive manufacturing. I can tell you I’m a FIRM believer in demographics. Most guys my age aspire to 1990s BMWs, Porsches and Corvettes because that is what we lusted after when we were young. How many 40 somethings aspire to own a 1934 Packard or even know what one looks like? On an interesting note, the 1956 Mercury is the newest American car I’ve owned. After 1965, I have no interest in them and have only owned German cars since I bought my first car in 1987. Growing up, 99% of the American cars were just awful.

    Most people into I run into that like 1950s cars are 25 years older than me. Cars before the mid 1950s were a handful to drive and need constant tinkering. Not something most guys born after 1970 want to or can deal with. How many gas stations still have distributor machines and how many 40 year olds can change points?
    There are two other problems that fact the future of the collector car market – declining purchasing power and high cost of real estate.

  21. I do not agree either for the most part. Tastes shift. Some of the really old cars–especially high dollar ones–may find themselves in a much smaller market. Relatively newer classics like 60’s muscle are going up. And…as pointed out by one previous reply; this does not even account for what is happening world wide. Don’t be surprised if many of the 20-30’s high dollar cars move overseas. There will always be an allure to a simpler, more pure, driving experience. My 14 year old son wants a G35, but would have a 1970 Charger RT if they weren’t 20K for basket cases.
    As for waning interest..anyone try to buy a big Healey lately? Or an XKE? 356’s are already Gucci crowd, let alone early italian exotics. What then is going down? Let me know so we can jump on that before the market figures it out 😉

    P.S. I think MGA’s are in the “lift” so buy now 🙂

  22. The Internet has changed everything. One aspect is that people can surf to learn about various cars, and for many that is enough. The actual ownership experience isn’t necessary for many people, or even going to a show to see the cars in person. The second aspect is that more common or famous marques are, shall we say, passé? What does a restored Mustang, Camaro, or MGB do for you any more? Been there, seen that. Even somewhat uncommon cars like MG T series cars or notchback ’60s VWs seem to always be around (Sunbeam Tiger or Shelby Cobra anyone?). Another related aspect is that the Internet encourages us to seek out the novel and different, rather than what we have seen before. Look at the interest in less well known cars of the 50s, and the station wagon variants of 50s and 60s cars. Things new and different to people who have had their fill of Tri-5 Chevys and 2 seat T-Birds.

    The wealthy see 356 and early 911 Porsches as equity investments, never mind the early Ferraris. That just means a few more cars need to be crossed off the bucket list, unless you are Jay Leno. For the rest of us, enjoy the fact that you might be able to pick up some interesting old iron for reasonable prices. Do not worry about what you cannot do anything about. My niche is the cars built in dozens or hundreds, with pedestrian drivetrains for easy maintenance, precisely because one will not see another one like it going down the road, but one can afford to maintain it and find parts. Thanks to the Internet, one can learn about them as they pop up for sale. If they are a little bit quirky in their styling or features, they will be ignored and criticized by others, leaving the door open for me to pay a reasonable price for a car that will make me happy. Since I do not buy to just sell again, all of this works for me. For traders, I am not sure what to tell you.

  23. Comparing the classic cars with the new ones is like comparing:
    Vacuum tube electronics to analog to digital…
    Straight razor shaving with disposable razors with electronic shaving machines…
    Elvis to Bieber…
    One thing I would like to add… I want to smell the burning gasoline and hear the gears shifting… I want to play Beethoven’s 9th symphony out of the gearbox! I do not want a keyless entry (it’s funny how the first cars never had even keys and not we are talking about keyless technology!!) 😀

  24. Well done per the thoughtful replies. While we all know the costs involved, the implicit returns from an enjoyable drive does seem to make it all worthwhile. Drive em and enjoy em.
    59 MGA, 76 Capri (the German one), 73 MG Midget

  25. The new cars like the Shelby GT500 and ZL1 are taking alot of sales away from the 60 and 70 pony cars. They drive great and look even better. They don’t break down every month and are showing up more @ car shows. They say the average age of a new Corvette owner is 61. That should tell you alot.

  26. Old cars are wonderful. No, I’ll grant you that generally they don’t perform as well as new cars, nor are they as comfortable, or as reliable. Are they an investment? The true test will be how many modern cars, with plastic everywhere and electronic gadgets galore will be restored 30 years form now? How many will be considered milestones or revolutionary? Precious few is my bet. Old cars were made by people (not robots) entirely from metal and wood. They were designed with pencils and paper, not computers and wind tunnels. The body can (usually) be taken right off the frame. You use wrenches to fix things, not computers. Old cars lend themselves to be worked on, sweated over. Like a sculptor or a painter, you get messy. They are simple and basic, and the driving experience is pure and unadulterated. No power steering. There is little in the way of safety equipment, or electronic aids for traction control or adjustable dampening. Old cars are about a driver taming an imperfect machine. For people that “get it” it’s not about statistics and figures. It’s about the seat of the pants feel. Sensation. The sounds and smells. Those imperfections are part of the unique appeal. It’s like riding a real horse versus riding a horse on a computer game.It’s single malt Scotch in a world of fruit flavored vodka. Downhill skiing on long skis with no helmet. Sometimes the old cars are a lot of work. Sometimes things break. You need to think, anticipate, react. For sheer transportation, a daily driver, I’ll take the new car every time. Much better way to go. Cruise with a finger on the wheel. For the enjoyment of driving give me a vintage sportscar and a two handed grip. Life is too short to miss out on the real deal.

  27. I am an Anthropologist. We study culture trends. I was witness to the Colonial Governments exiting Africa in the 1970’s Basically turning over advanced 1st world infrastructure to 3 rd world hunter & gathers. These people immediately consume what they have with thought to the future. That is why the Pakis and Indians run all the stores on the Continent. At least $75 Billion from World Bank. Where is it? Why are Populations defecating on beaches at .
    low tide? Anyway millenials live like the dolinencephalic (small brained, low IQ) negroes. They want childish things immediately. Dope,Sex, Computers. The Pakis are running cash retail stores in USA. you got the picture. Old cars will devalue drastically soon soon soon. When 30 year Bearer Bonds were banned by Jews in 1983 in the USA. I invested in them heavily. Now I am rich like a filthy commie jew. Young whites are too dumb to see the decay of the USA.Its so obvious