Saturday, May 19, 2007

Classic cars are here to pay

Camaro’s value laps Dow
By Jerry Kronenberg
Monday, May 14, 2007 - Updated: 10:08 AM EST

Tom duPont thinks classic cars make better investments than stocks, because even if you lose your shirt, at least you’ll enjoy driving one around.
“You can make money with either the right car or the right stock, but cars are more fun on weekends,” said duPont, whose magazine The duPont Registry recently found that classic cars sometimes outperform stocks.
For example, the Florida-based publication reported that a 1969 Chevrolet Camaro Z28 RS with Corvette brakes cost $3,184 when first sold - but fetches more than $200,000 today.
That’s a 7,193 percent return - about seven times the 1,077 percent Dow Jones industrial average’s gains for the same period. The same $3,184 invested in the Dow would have only grown to $37,480.

Other classic cars that crush the Dow include the 1966 Shelby Cobra 427 Supersnake and 1967 Chevrolet Corvette 435HP, both of which have gained more than 6,000 percent.
DuPont said classic-car values are soaring because “the collector-automobile market is on fire right now.”
He said well-heeled male baby boomers are driving prices higher, nostalgically snapping up cars from their younger days.
“There are an awful lot of guys between 50 and 70 whose kids are grown up, who have enough savings in the bank and who say, ‘Boy, I’d love to get an old Ferrari or Lamborghini or Pontiac GTO,’ ” said duPont, himself 58.
But while savvy car buying can yield big profits, duPont said there’s “nobody in the business that I know of who invests in collectible automobiles solely to make money. Everyone has a genuine passion for cars.”
He added that even experienced collectors have tough times predicting which vehicles will gain the most going forward.
“It’s not easy to make money in collectible cars,” duPont said. “But in case you hadn’t noticed, it’s not easy to make money in the stock market, either.”
Still, the publisher said cars whose prices soar typically have some or all of four key characteristics:
Ragtops. “If the top goes down, the price goes up,” duPont said.
Celebrity owners. Any car owned by a famous person appreciates more than a typical model does.
Rarity. Limited-edition cars or vehicles with rare options do better than those that are mass-produced models.
Good condition. Well-maintained cars with low mileage usually perform the best.
Recent models duPont thinks have bright futures include the 2007 Ford Shelby Mustang GTH350 and 2004 Ford GT40. Unfortunately, both cost hundreds of thousands of dollars.
But duPont said even something like a $15,000 1955 Chevrolet Bel Air can return a nice profit if a collector updates the finish and hangs on to the vehicle awhile.
DuPont added that “unless you absolutely destroy a car, you’ll always get something for it. Unlike companies, cars can’t go bankrupt.”

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