Robert Farago
05/03/2004
Transforming a rusted heap into a mint-condition classic is a challenge that has always enticed classic car aficionados. But, as any plastic surgeon will tell you, restoring beauty can be expensive. Rarely does the investment we make in a car restoration pay off in terms of future resale value, but it often makes excellent sense when considered in light of its emotional returns.
Restoration veterans’ war stories illustrate the financial gap
between restoration investment and resale value. Last summer, for example, RM
Auctions, a Canadian auction house, sold a 1968 Pontiac GTO Ram Air convertible
for $61,101. The car came with receipts that documented the former owner’s work:
an engine overhaul, complete interior restoration and extensive bodywork,
totaling $120,000. Glen Konkle brought home that prize. With a dozen years of car
collecting behind him, Konkle says he was tired of commissioning his own restorations. “It takes a lot of time, effort and energy to manage a project,” he says. “When you buy a pre-restored car, you know what you’re getting.”
Bill Nero, a consulting engineer, experienced the flip side of that situation. He had long coveted a Triumph TR6, and after locating a down-in-the-mouth 1974 model, he spent $30,000 and thousands of hours restoring it to showroom quality. But when he decided to sell it, Nero found the British roadster was only worth $25,000.
VALUE JUDGEMENT • Learn all you can about the car’s technical details before purchasing
it;
Typical of many vintage car owners, he was
not particularly bothered. “I didn’t buy the car as an investment. I bought it
because one of my high school classmates got a TR6 for graduation; I swore that
day that someday I’d own one. When I finally got the chance, I wanted to have
the best TR6 in the world, no matter how much it cost or how long it took to
finish,” he explains.
Buying a classic car in need of restoration is a risky financial investment,
but it can be emotionally very satisfying. To ensure you end up with the car you
want:
• Hire an expert to examine the car and estimate how much it will
cost to restore prior to purchase;
• Hire a restoration shop only after
checking references;
• Prepare yourself for the possibility that the
restoration will cost significantly more than it adds to the car’s resale
value.
Cargnoscenti
Restoration can be a hugely expensive and time-consuming
business. Rob Myers, founder of RM Auctions, estimates that up to 50 percent of
all amateur car buyers end up losing money in a restoration
project.
Restoration costs are unpredictable, so many reputable companies
refuse to provide estimates. As Tom Rossiter, who owns The Stable, a New Jersey
dealership that specializes in restoring European exotics, puts it, “The honest
ones will tell you to open your checkbook and send them checks as you go.” Often
the need for unusual parts makes it difficult to estimate the time the project
will take. Also, premiere restoration shops may have months-long waiting lists.
“Until you pull the panels off an old car and take the engine apart, there’s
no way you can know what to make right,” Rossiter says. “The more you look for
problems, the more you’ll find, and the more money you’ll have to spend.” He
recommends finding a restorer with a proven track record and carefully checking
references. Finding a trustworthy shop is particularly important because
restorers know that most owners will not halt a project while the car’s bolts,
engine, frame and hinges lie strewn across a workshop floor.
For those of us
who, like Konkle, plan to purchase a restored vehicle, Craig Jackson, president
of Barrett-Jackson Auction, says it is vital to determine the quality of the
work done. “There are restorations and there are restorations,” Jackson says.
“You need to know as much as possible about the work that’s been carried out on
the car.”
Jackson says we need to know whether the repairs were only
cosmetic, whether the restorer used original parts or reproductions, and whether
it was a professional project, or the handiwork of an enthusiast who did it
piecemeal. Most sellers provide meticulous records (including photographs) of
the restoration work. As buyers, we also should obtain information such as
original spec sheets, workshop manuals and restoration and price guides prior to
our investment.
Jackson also urges us to hire an independent expert to
scrutinize the object of our desire. We can hire a professional restorer or
vintage car dealer to accompany us to car shows, auctions, showrooms or private
garages. These sorts of experts can prepare us for the logistical and financial
risks of restoring a faded beauty. Restoration experts will flag problem areas
such as hidden rust, inappropriate or counterfeit parts and quick-fix mechanical
repairs.
We should also give thought to why we are pursuing a particular car.
Clearly understanding our motives will help us judge how much we are willing to
invest. “If you’re buying a car as an investment, you’ve got to know both your
financial and emotional limitations,” cautions Steve Babinsky, owner of
Automotive Restorations in Bernardsville, N.J.
Those of us who are new to
the world of restoration can join a brand-specific car club. There are hundreds
of dedicated organizations catering to both rare cars like the dual-toned
Bugatti and more common classics like the Jaguar. “Each marque has its own
unique challenges,” says Larry Davis, chairman of the Aston Martin Owners Club
USA West. “I tell aspiring Aston owners where to find a restored car, what it
might be worth, and the quirks of particular models. I can help them avoid
making expensive mistakes.”
The Rare Winners
There are, occasionally, situations when a restoration
project can be both emotionally and financially lucrative. When vintage
collector David E. Kane bought a 1934 Packard V-12 convertible for $150,000, it
did not run and needed a full overhaul. Kane saw the pearl in the oyster; the
Packard, he says, “was a unique model from a popular, low production marque, so
I knew I had a reasonable chance of ending up with something valuable.” The car
was structurally sound and its materials were all original.
Kane spent
$225,000 restoring the Packard to showroom condition, and now believes it is
worth over $400,000. The car also went on to win First in Class at Pebble Beach
in 1996. As an investment, the Packard will also benefit as vintage car prices
rise—well-restored cars tend to appreciate by 10 percent to 15 percent a year.
Yet, despite his rare restoration triumph, Kane still advises newcomers to buy a
well-restored car they know they will enjoy owning.
“At the very least, you
won’t lose a fortune and you can enjoy the car straight away,” he says. “If you
make money, well, consider it a bonus.”
RESOURCES
RM Auctions
800.211.4371
www.rmauctions.com
Automotive Restorations
Bernardsville, N.J.
908.766.6688
Barrett-Jackson Auction
480.421.6694
www.barrett-jackson.com
Bugatti Owners Club
www.bugatti.co.uk
Jaguar Owners Club
www.jcna.com
Aston Martin Owners Club—
North America
www.amoc-na.org
The Stable
908.234.2055
www.stableltd.com
Photo by Scott Williamson
www.photodesignstudios.com