If you find yourself being bitten by the classic car bug, then we’ve got to tell you - it’s not such a bad thing! There are so many different reasons for wanting to start a classic car collection: It can be the start of a passionate hobby, a childhood dream come true, or your choice of a reliable source of investment. Late Night comedian, Jay Leno has a multi-million dollar collection of nearly 200 cars, a passionate hobby for him and an excellent investment, as well.
Widening your portfolio of investments to include a fully restored classic car, complete with original documentation, is often a sound decision. As per the HAGI Index, prices of many important classic cars rose by 10.33% in the first half of 2012, a huge advantage over the 4.54% gain of the S&P Global Index. The values of many classics have risen by as much as 49.3%, after HAGI started its classic car valuation in 2008. This is nearly a 12.13% per annum increase. And the 6 auctions held last month in Arizona showcased nearly 2700 rare cars and made record sales of more than $220 million.
Whatever your reasons for owning a classic car, there are certain significant factors that should be given due consideration before you make the purchase. According to the NADA Guides, before buying a classic car, it is important to:
- Check the exterior of the car for any signs of damage from accidents or disintegration due to weather related wear and tear. Check the inside of the trunk for signs of welding, hammer marks, rust or scratches from accidents, as these can considerably lower the value of the car. The rear window package tray often shows signs of rust, especially in cars produced between the middle of the 1960’s to the early 1970’s. Signs of rust are also often seen under the lower rocker panels, drip rails, rear windows, lower portion of front fenders that are directly behind the front wheels, and the rear lower quarter wheel well openings. As these repairs are very expensive, it should be duly considered before you make the purchase.
- Check the alignment of the doors, fenders, hoods and the trunk of the car. Any inconsistency seen in the alignment can be due to substandard restoration done on the vehicle or can be the signs of clipping. Very often when clipping is done, a major portion of the car is replaced with parts of another vehicle. This again brings down the value of the car.
- Judge the originality and authenticity by restoration work done to the interior of the car. The original factory interior highly increases the value of the car. Many aftermarket replacements that are available are quite inferior compared to original factory products. Padded dashes, arm rests, door panels and rear package trays often show signs of having been replaced with inferior aftermarket replacements. Again many cars produced between the 1960’s and the 1970’s have lower values due to the installation of aftermarket instrument clusters and custom stereo equipment. These installations cause intensive damage to the entire dashboard and very often have to be replaced with new ones.
A perfectly restored car with authentic parts and original documents highly increases the value of a classic car. So before investing your money on a classic car it is imperative to do your fair share of educated research on the car and model you intend to buy. A pre-purchase inspection of the car is very important in order to ascertain the originality of the vehicle and it has to be done by a person who has complete knowledge of the model. The National Auto Inspection has pre-purchase inspection services starting from $220.
Furthermore, maintaining the value of your classic car is of equal importance once you have it parked proudly among your car collection. Collector car insurance is what you need to keep your classic beauty secure from wear and tear and collisions and other significant damage.
Classic Auto Insurance gives you the best insurance quotes for your classic cars. For more information, fill out a free, instant quote form today!
About the Author
Drew Yagodnik is Vice President of Classic Automobile Insurance Agency, Inc. Classic Automobile Insurance Agency has been protecting collector, classic and exotics since 1992.