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Correlation Between Classic Car Prices and Financial Markets

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  • fintailfintail Posts: 33,784
    As a fun hobby and collectible, there probably aren't any more fun. As long as they can still be driven, cars offer something not given in a pile of old coins, a book of stamps, or a case full of glassware. If one buys a decent old car for say 10K, and cares for it - in 10 years, it shouldn't be worth much less anyway...try that with a boat or snowmobile etc.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    The trick is not to get hooked on some Holy Crusade to "preserve the 1956 Blatmobile", and end up so utterly buried in the car, beyond reason, that you now find it a burden to own.

    You have to pick your shots. Some cars are just not worth restoring, no matter how much you like them. If an old car is cheap to buy, it's cheap for a reason.

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  • fintailfintail Posts: 33,784
    My solution is to simply not restore. Buy something someone else has sunk their bankroll into - or find a nice original. Like my fintail - I would love to restore it, but unless I win a lottery or my income quadruples, it's not going to happen - I can't justify the expense. Sink 30K+ into something worth half that when I am done - and then I will be paranoid about driving it. No thanks. I can drive my old car as hard as I want now, and if something breaks, I then get to decide to fix it (most likely) or find it a new home. Much less expense and drama. This way, insurance is $100/year, it's not a terrible guzzler, I try to give it a few hundred a year in maintenance (although I think it needs some valve seal work now), and paying for storage - that's it. Cheap fun.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Not all auction companies are prospering these days:

    KRUSE'S WOES

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  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,332
    After reading the news article, it appears Kruse is too shy about collecting his accounts receivables, not wanting to create ill will that will color future transactions.

    Debtors have little respect for other businessmen who let them slide. Kruse must be more agressive in collecting what others owe him so he can pay his bills. :mad:

    "It's really not sold until it's paid for."
  • texasestexases Posts: 5,599
    And this kind of bad press will have to hurt his business - I wouldn't want to risk getting my money when I sell my (non-existant) $100k beauty.
  • fintailfintail Posts: 33,784
    I have to wonder if some of the customers or Kruse himself became dependent upon "profits" generated from the false real estate market to fund the car hobby. When that dried up, the cash stopped flowing.

    And then we have today, where "you can't bleed a turnip" rings true, especially after lawyers take their share.
  • hpmctorquehpmctorque Posts: 4,205
    From the article, "The six-day Labor Day auction, he hopes, will solve many of the problems that have plagued Kruse International for the past year." It'll be interesting to see what happens. From the article I get the perception that Mr. Kruse means well, but it sure doesn't look promising for those who are owed money.
  • parmparm Posts: 723
    I attended Saturday of the Kruse Labor Day weekend auction. Attended the two previous years too. While there were tons of people this year, there were fewer cars. And, the overall quality of cars was down in my opinion. I don't know what the overall sale percentage was, but from what I witnessed, my perception was that at least 2/3rds of the cars didn't meet the seller's reserve. Today's seller's can't be THAT out of touch . . . . . . can they? :confuse:
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Depends what they are selling. If they have top notch quality stuff, they'll probably sell it. But those folks with shabbier cars, or incorrect cars, or hot rods and customs---they're taking a beating right now.

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  • hpmctorquehpmctorque Posts: 4,205
    Interesting feedback, parm. It's hardly surprising in this economic environment, especially in the Midwest.

    It's my impression that the prices of all but the top tier classics have weakened significantly in the past year.
  • texasestexases Posts: 5,599
    Article in today's Dallas business section about expensive hot rods - get this:
    "We have seen some guys pull money out of the stock market and put it into cars," said Mikus of Kustom Classics. "Cars are a lot more stable right now."
  • fintailfintail Posts: 33,784
    Maybe 8 months ago...but now...that's just stupid.

    And on top of it, hot rods/customs are probably the worst way to spend your automotive dollar if you have any mind to selling it in the future. At least I could get half my money back if I restored a normal car...maybe a quarter comes back out of a custom.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Like you'd really want to take investment advice on hot rods from the owner of a hot rod business....oy!

    There are some rods that retain value but these are the ones built by famous designers---or better yet, famous designers from the past--in other words "period hot rods" that were famous in their day in magazines and shows.

    But my opinion is that if you pay someone $150,000 to build you a nice rod, you're going to get $75K--$80K for it if you put it up for sale while it is still fresh.

    Why would someone pay you full price for a rod that was designed to YOUR tastes? Why wouldn't they spend the same amount of money and have it done their way?

    Another factor in the hot rod world is that tastes change! Does anyone think stretch limos are cool anymore? Or Fort T buckets?

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  • fintailfintail Posts: 33,784
    Yeah, the period rods can bring big money, and often look better than modern ones too.

    That's exactly it - when you do a custom, you built it to your tastes. You have to count on someone having both your exact tastes and the desire/money to buy the car if you want to move on. It can't happen too often. At least with a correct restoration, there is usually some group of enthusiasts to want it.

    T-Buckets are so 70s, and plain rodded Model As and other 20s-30s stuff is very 80s in my eyes.
  • Hey I actually kind of like T-Buckets as long as they aren't over done.
  • lemmerlemmer Posts: 2,676
    Yeah, I love those. But I think of them as $10K - $15K hot rods. But then again, I am cheap.
  • hpmctorquehpmctorque Posts: 4,205
    The U.S. equity markets have risen ~60% since they bottomed in early March of this year. In recent months, the weakening dollar has been cited as a significant factor in supporting the stock market ralleye. While I have no idea regarding how the dollar will perform over the next couple of years, I imagine that continued dollar weakness would help support classic car prices, while a strengthening dollar would be a head wind for prices.
  • fintailfintail Posts: 33,784
    Dollar weakness will support prices of cars to be exported, anyway.

    Car prices won't go anywhere as long as housing prices keep sagging and employment is stagnant or falling. I don't know if I see either changing.
  • andre1969andre1969 Posts: 21,998
    Grbeck, Lemko, and I went to the Fall Carlisle swap meet last weekend, and I noticed that a lot of the prices are starting to get more reasonable. Well, reasonable for Carlisle, anyway! Another thing I noticed is that a good deal of the cars that weren't priced so exhorbitantly to begin with had "SOLD" signs on them.

    Now, there were still plenty of ridiculous prices out there, as well. Oh, that 1983 or so Olds 98 I had mentioned in another forum that was $10,500, wasn't there when we got there on Saturday. So it must have sold, but at what price, who knows?
  • grbeckgrbeck Posts: 2,361
    The 1964 Olds Ninety-Eight convertible for $36,000 was completely over the top. It was a nice, original car, but no way was it worth that much, especially in today's market.
  • andre1969andre1969 Posts: 21,998
    Oh yeah, I'd forgotten about that one. And how much was that 1976 Mark IV next to it? Something like $21K?
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Keep in mind though that the classic car "market" is defined only by buyers, and that a lot of those buyers are overseas right now.

    Case in point. A former client of mine wanted to get rid of his very nice Mercedes 190SL but could not get his price advertising locally (california). I hooked him up to a dealer who specializes in overseas sales and that car was on a boat to Holland in a week's time, full price paid and room for commissions, too.

    So the market will reflect that 190SL prices are solid, but it won't reflect that many of them are leaving us, never to return to the US.

    Which in turn, ironically, will create a certain scarcity and keep prices up yet again.

    Of course, this is only for quality merchandise of the highest order.

    No one is going to be shipping *every* type of old car to Europe. Only the "iconic" ones that are reasonably correct (Europeans aren't as fussy as we are about numbers, etc. as long as the car is not externally chopped up) and of excellent quality.

    As usual, classic cars follow the arbitrage but I think if a car goes back to its country of origin (or near to it), it's not coming back this time around even if the dollar gets stronger.

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  • fintailfintail Posts: 33,784
    You're right about those cars never coming back.

    I've seen many fintails sent back to Europe, too - as they can be bought so cheaply in the US even with shipping one can come out ahead and not deal with the rot issues. Those things will never make it back to NA.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    We got back all the Ferraris that went to Japan though :)

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  • grbeckgrbeck Posts: 2,361
    It was either $19,000, or $14,000. I can't remember which price.
  • hpmctorquehpmctorque Posts: 4,205
    Interesting comments. One deficiency for Europeans (except for the U.K.) and others is that the speedometers and odometers of these U.S. sourced German classic cars are in miles. A less important consideration for foreign buyers is that the numbers on the temperature gauge, if they're displayed, are in fahrenheit.
  • hpmctorquehpmctorque Posts: 4,205
    I can think of possible reasons for this, but why did this happen?
  • parmparm Posts: 723
    A '64 Olds 98 convertible? A nice one? Hey, now you're talking my speed. Anyone snap any photos of it?
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Japan went bust in the 1990s and (scary thought) even now has not fully recovered from its recession. Their banking practices made OURS look good, if one could even wrap one's mind around such a concept.

    RE: American spec cars in Europe -- they "haf their vays" of converting things to their liking, quickly and efficiently. Most well to do Europeans seem to me to be pretty facile with metric conversion to American standards and vice-versa anyway. Many speak more than one language, too. :)--so they are knowledgeable about the cars they buy and can communicate with American buyers easily.

    Of course the Brits have a whole other problem with RHD/LHD, so they like to shop our RHD cars---all the quirky British stuff like Alvis, Humber, old Bentley saloons, Triumph Heralds, Stags, Vitesses, etc.---all that seems to be finding a market more in the UK than here. But they know how to swap LHD to RHD for many popular makes like Jaguar, Rolls, etc. and they can deal with rust as easily as we deal with a brake job. The same British cars we wouldn't sniff at over here are often restored in the UK, much to our (my?) amazement. But then, when you live on an island where most old cars are converted readily into iron oxide, one's concept of what is worth saving, changes.

    Scandanavians are into American Muscle of all things. They go nuts for them, if they are nice and if they are "iconic" and easily recognizable. Everybody knows what a Mustang and a Corvette is. A Buick GS, not so sure that such a car goes over big in Norway.

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