Can Tom and Ray help Larry pick tomorrow's "collector" cars, today?
I see classic-car auctions on TV where they're getting outrageous prices for what we thought were normal cars in the '60s and '70s. Is there a new car today that I can buy and know that it will be worth a large sum of money 30-50 years from now? Something I can hand down to my grandkids? Are there criteria for future "collector" cars? -- Larry
RAY: Larry, if I could say with any certainty what's going to be worth huge sums of money 30 years from now, I'd be playing the stock market, not wasting my time sitting in a hot, smelly room answering questions with my brother!
TOM: Hey, who're you calling hot?
RAY: First of all, I'd be cautious about taking TV auctions too seriously. It might come as a surprise to you, but what you see on television doesn't always accurately reflect reality.
TOM: While there's no way to know for certain which cars will increase in value, most collectible (read: "valuable") cars tend to have one thing in common: They tend to be rare.
RAY: So you're not likely to see Ford Tauruses or Toyota Camrys fetching high prices down the road.
TOM: The cars that are worth the most money, in general, are cars -- or versions of cars -- that were produced in small quantities. And, unfortunately, cars that are produced in small quantities tend to be what? Expensive now!
RAY: So rather than try to guess what car collectors will want 30 years hence, we'd suggest one of two options. One is the approach favored by Craig Fitzgerald, editor of Hemmings Motor News ("the bible of the collector-car hobby"). Craig says rather than buying a new car now, he would buy something older that is already generating some interest -- but not enough to have become "hot" yet.
TOM: For instance, Craig points out that the 1968-1972 Chevy Chevelle SS, Olds 442 and Buick Gran Sport are all worth lots of money right now. But the 1973s are selling for about a third of the price. He thinks they're just as nice in many ways. So he'd take a gamble on something like that. Just remember that it's still a gamble.
RAY: But our advice would be to forget all about "investing" in a car. Instead, just buy a car you really love. Since the monetary value of a car is hard to predict -- and the overwhelming majority of them become almost worthless -- buy a car that makes you happy when you drive it and makes you smile when you look at it.
TOM: And when you give that to your grandchildren, no matter what its financial value, it'll have real value to them because it was "Grandpa's favorite car." Then they'll really cherish it. Until they wrack it up or sell it for beer money. Good luck, Larry.