What's the Value of my Classic? - Part Two - Investment or Commodity

Is Your Classic an Investment or a Disposable Commodity?

In Part One of this series, we reviewed the difficulties of assessing the value of a Classic based on limited knowledge and price guides alone. The conclusion? It's impossible. Yet we continue to observe the majority of owners discounting the importance of creating a vehicle dossier. Even more critical, this increasingly important necessity remains widely ignored by buyers.
Reality TV is Not Reality, It's TV

In a previous post we featured a visit to Jay Leno's Garage, where he reminded people, "No, you can't restore a car in five days. It takes months, sometimes years." The reason TV shows continue to pretend "weekly restorations" are reality, is because it's TV. But they are doing a fine job of entertaining us, which is the objective. Fortunately they are also educating us on the pitfalls of buying a Classic without reviewing the details.
Example of an "eight day restoration" using body filler and old license plates
The "Head Fake" Case in point was again brought to our attention while reviewing another Classic car reality TV show. There were two Classics involved; a 1971 Chevelle and a 1968 Mustang. In brief, the seller didn't spend a minute to point out the Mustang was an original, numbers matching "S" code GT, typically worth double the value of a garden variety fastback ($40K+ when restored). He instead stood ground on an emotional connection. The Chevelle, on the other hand, was a common 2-Dr. Malibu. 
Similar Mustang on Day One
Similar Mustang on Day Eight
Both cars went through an "eight day restoration refurbishment". The Chevelle, which was bought for about $4K sold for about $25K, as did the non-operational Mustang with cut out floors awaiting repair. Both had nice new paint, but for the most part, little else in the way of restoration. The sellers then bragged about scoring a combined $10K - $15K profit. maybe it's just us, but "somebody seems to have gotten screwed...royally". Why? Nobody asked for proof. Is that what will happen to you?

"Let Me See Your Papers!"
Unfortunately, these two Classics fall into the disposable commodity category. There are no photos, no history and the "restoration" is undocumented. Although it may have also been scripted, the new owners demonstrated a common purchasing flaw, the "impulse buy". Based mostly on emotion and rapid completion of their acquisition. Had documentation been brought into the negotiations, it is very unlikely the above scenario would have concluded with the same results. 
 
Educating the Buyer AND Seller
Spokespeople from the UK's Silverstone Collector Car Auction provide guidance to search for and acquire a Classic. A purchase that can be both an enjoyable hobby item and appreciable asset. While they focus on the buying process, they are also informing current owners what to do in preparation for a future sale; collect, organize, manage and protect your Classic's history and documentation.

"Any car can be restored, but a history file can never be repeated. It's always important to spend time looking at the documents."
Paul Campbell, Auction Manager Silverstone Auctions

"No purchase should be carried out without completing some due diligence. You need to understand what you're buying. And in the case of a car, you need to understand the strengths and weaknesses of the car you're looking at. Do your research beforehand."
Unidentified Spokesperson



In Conclusion
Owners ignoring the need to create a dossier of their Classic and the education provided to tomorrow's owners, that the value of a Classic is heavily weighted by the accompanying documentation, are creating unnecessary negative conditions:
  • Permanently erasing automotive history
  • Reducing the importance of your stewardship as a Collector car owner
  • Decreasing the desirability of your Classic
  • Diminishing the asset value of your investment
Up Next - Let's build something together. 
  • For the owner-How to properly document a Classic, then manage the history within a secure and well protected environment.
  • For the buyer-Put emotions aside, ask the right questions and confirm it's a "Registered Classic™"

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