By the Numbers: Mechanical Investments

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Written by David S. Wallens

From the March 2015 issue

Posted in News and Notes

Every car sold back in the day is money in the bank, right? Not so quick.

We grabbed Road & Track‘s 1970 buyers guide and looked at prices, comparing their “as tested” prices to today’s average values as dictated by the Hagerty guide. To level the playing field, we also ran the original prices through an inflation calculator. Yes, a few members of the class of 1970 represent great investments. Most, though, didn’t do as well as expected.

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Reader comments:

Danny Shields
May 4, 2015 11:50 a.m.

That actually makes a Rolls Royce Silver Shadow look like a good deal.
Once again, we see that it is hard to predict which cars will be worth a lot in 45 years, so just buy what you like and enjoy it.

tuna55
tuna55 MegaDork
May 4, 2015 11:53 a.m.

My parents cashed out their 401K in some year like 2002 to buy a 350HP, 327, four speed, sidepiped '67 Corvette. It's all original and matching everything. Marlboro red. I thought they were idiots. They've tripled their investment since then. The S&P500 sure hasn't.

Sometimes, timing is everything.

rconlon
rconlon HalfDork
May 4, 2015 11:55 a.m.

"Most, though, didn't do as well as expected" This comment caught my attention. In 1970 few, if any, of the cars on the list were expected to do anything but lose their value after leaving the lot. This they did and most could be purchased for much less than the original inflation adjusted price 10 years ago. So the Alfa spider would be $7000 in 2004 and has done well in comparison to that benchmark.

nderwater
nderwater PowerDork
May 4, 2015 12:26 p.m.

Someone please find me a running Lotus Elan for $15K. The cars I've seen advertised lately are in the $50,000-$90,000 range.

ProDarwin
ProDarwin UberDork
May 4, 2015 12:58 p.m.

FWIW, in May 1975 (as far back as Google Finance goes) the Dow Jones was ~$835. It outperformed everything on that list. The Ferrari came close though.

wearymicrobe
wearymicrobe SuperDork
May 4, 2015 1:30 p.m.

They are also not counting storage, insurance, maintenance, sales fees, registration. Nothing is really good investment. The crazy high dollar toys are just cash holds for the wealthy, the stuff underneath is so dependent on the weather that it makes no sense to compare them.

Just have fun, keep your cars up to date and don't call them investments.

MadScientistMatt
May 4, 2015 2:31 p.m.

It'd be interesting to see some traditional muscle cars from 1970 stacked up - from somewhat mundane small block cars to rarities like a GTO Judge or Hemi Charger.

Rupert
Rupert Dork
May 4, 2015 2:40 p.m.

Drive it! That's what it was built for.

TR8owner
TR8owner HalfDork
May 4, 2015 3:16 p.m.

In reply to nderwater:

Get an Europa twin cam instead.

nderwater
nderwater PowerDork
May 4, 2015 9:20 p.m.

If only I had a weaker gag reflex!

Dashpot
Dashpot Reader
May 7, 2015 11:32 a.m.

In reply to nderwater:

And while you're at it - find me a non rot box running E Type Coupe for $33K.

Basil Exposition
May 7, 2015 12:05 p.m.
tuna55 wrote: My parents cashed out their 401K in some year like 2002 to buy a 350HP, 327, four speed, sidepiped '67 Corvette. It's all original and matching everything. Marlboro red. I thought they were idiots. They've tripled their investment since then. The S&P500 sure hasn't. Sometimes, timing is everything.

You're right, $1 invested in the S&P 500 in 2002 would be worth "only" $2.32 today.

Would be interesting to take that chart and adjust it for, say, an index fund on the stock market rather than just inflation. That would be a true "investment" comparison. I think, as stated, few cars would have made a good "investment" in 1970. And timing IS everything. All those cars went through a period of "just another used car" depreciation. And then when they became collectible there is the cost of restoration. And all the other costs someone else identified. And remember the 80's collector car value crash. Took a looong time for Ferraris to get back to those values.

The E-Type I bought about 10 years ago has also more than tripled in value. While I'm very pleased about that, as I should be, it does affect how I view the car. Now I'm thinking about selling because maybe the values won't hold, or it will get me that much closer to retirement, or I could buy three or four different cars I admire with the money. It is too bad it is looking much more like an investment to me because that's not why I bought it in the first place and it actually interferes with my enjoyment of it.

Cotton
Cotton UltraDork
May 7, 2015 2:41 p.m.
wearymicrobe wrote: They are also not counting storage, insurance, maintenance, sales fees, registration. Nothing is really good investment. The crazy high dollar toys are just cash holds for the wealthy, the stuff underneath is so dependent on the weather that it makes no sense to compare them. Just have fun, keep your cars up to date and don't call them investments.

I'm not going to argue whether or not they're investments, because for me it's a very enjoyable hobby and value going up is just a nice bonus, but those types of expenses don't always apply. There are plenty of cars sitting around with open titles, non maintained, in a structure the owner already owned (not paying dedicated storage), either not insured or on cheap collector policies etc. Plenty of those owners still cash in when the time is right.

Cotton
Cotton UberDork
May 7, 2015 2:42 p.m.
Rupert wrote: Drive it! That's what it was built for.

How many miles do you think someone should drive their classic annually?

WilD
WilD HalfDork
May 7, 2015 3:18 p.m.

Wow, a Morgan Plus 8 was quite the bargain in 1970. I wish I could get a new Morgan for $17K today.

az308gts
az308gts None
May 8, 2015 1:03 p.m.

I'm still trying figure out which Ferrari 250GT Lusso was built in 1970???

Rupert
Rupert Dork
May 10, 2015 8:16 p.m.
Cotton wrote:
Rupert wrote: Drive it! That's what it was built for.

How many miles do you think someone should drive their classic annually?

How many miles do you want to? My '71 240Z, which I bought new had over 150K on it when I sold it. And I believe it was a better car for that.

My Z and none of the other classics I've owned except my TD were ever my DDs. And that was because at the time I owned the TD, I couldn't afford a DD too. I drive/drove them, when I am/was in the mood.

It's not an investment, it's a car. If you end up breaking even on sale day, great! More so, greater still. But if you don't use it while you own it, why have it at all? Owning a classic car isn't like owning a classic painting. It has no value just hanging around & never seeing the light of day.

Cotton
Cotton UberDork
May 11, 2015 3:51 p.m.
Rupert wrote:
Cotton wrote:
Rupert wrote: Drive it! That's what it was built for.

How many miles do you think someone should drive their classic annually?

How many miles do you want to? My '71 240Z, which I bought new had over 150K on it when I sold it. And I believe it was a better car for that.

My Z and none of the other classics I've owned except my TD were ever my DDs. And that was because at the time I owned the TD, I couldn't afford a DD too. I drive/drove them, when I am/was in the mood.

It's not an investment, it's a car. If you end up breaking even on sale day, great! More so, greater still. But if you don't use it while you own it, why have it at all? Owning a classic car isn't like owning a classic painting. It has no value just hanging around & never seeing the light of day.

So what are you getting at? Car collectors shouldn't collect cars because they can't use them like a DD? You should either run them into the ground or not own them? Some people just have too many cars todrive all of them thousands of miles per year. Just because a car is driven sparingly doesn't mean it isn't enjoyed.

beaglevt
beaglevt New Reader
Oct. 1, 2015 5:31 p.m.

I wish I still had the TR3 I bought in '65 for $400 and sold in '69 for $700. I thought I was doing really well. The '67 Shelby GT350 automatic? Never really enjoyed it. It went in '71 during the first gas "crisis" for $1700. I'm having more fun now with a '76 450SL than I had with either of them, and I don't care about the odometer reading. It already has 146K on it and the speedo reads 15 mph slow at 50. Never had so much fun at the speed limit cruising the Adirondacks in full foliage, and the V8 exhaust note is pure sex, albeit cheap sex. Better than none at all...e.g. Prius

TRoglodyte
TRoglodyte SuperDork
Oct. 1, 2015 7:39 p.m.

"Drive your money out of it". How much is that ear to ear grin worth to you? Or a thumbs up from a youngster wishing he was in that TR 3?

850Combat
850Combat Reader
Oct. 2, 2015 7:43 a.m.

They generally don't pencil out as investments. I own one classic that has barely doubled in value in 28 years of ownership. I've got another that more than doubled since 2001. As investments, they are not good. Better investment than driving a new car off of the lot though.

As to the Dow, they routinely get rid of one and put in another. Recently, out with ATT and in with Apple. All at no cost. That isn't as easy in your own garage or your own portfolio.

As to that list, I want a Subaru 360 and a Maverick as much as I ever did. My BMW 2002 was a '73, stick with air. I bought it in '78 for $2700, as I recall. It came with the sticker, which was $4200.

I've never had a mutual fund pee brake fluid all over my garage floor. I've never cleaned a mouse nest out of the heater fan plenum on a stock or bond.

racerdave600
racerdave600 SuperDork
Oct. 2, 2015 8:27 a.m.

What strikes me is the adjusted for inflation costs. Just shows how much cars have gone up with all the safety and luxury items added.

TRoglodyte
TRoglodyte SuperDork
Oct. 2, 2015 10:21 a.m.

I have a Sports Car Illustrated magazine from October 1960. They tested a Ferrari 250/GT Berlinetta, $14,000 as tested. Austin Healey 3000 advertised for $3051.00.

kanaric
kanaric Dork
Oct. 2, 2015 12:39 p.m.

Some of those cars on that list for current price are suspiciously low lol. Makes me want to go hunting for them.

David S. Wallens
David S. Wallens Editorial Director
Oct. 6, 2015 8:23 a.m.

Glad that you guys enjoyed the list. It was fun to put together. Yes, lots of different ways to interpret the data. (Personally, I'm investing my money in a time machine.)

Kreb
Kreb UltraDork
Oct. 6, 2015 4:09 p.m.

3 years ago, practically every car on the list would be down. Two years from now, they may again.

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