Have imperfect cars become the perfect investment?

by Karl Brauer
28 April 2021 4 min read
Porsche recently promoted a "patina" painted new 911 as an April Fools prank. It's no joke, however, that some older 911s—and other classics— in less-than-perfect condition are appreciating faster than concours-ready examples. Photo by Porsche

“Like new,” “Pristine,” “In the Wrapper,” and “Delivery Miles” are all terms classic car sellers love to tout. And why not? If you’re buying a classic car, don’t you want one as close to mint as you can afford?

Maybe not.

We’re not suggesting a sea change, with every classic car buyer running away from perfect cars and running toward worn out, beat up heaps. But there are multiple indications that enthusiasts and collectors alike are increasingly seeking out less-than-perfect examples of certain cars.

Our Hagerty Price Guide data shows prices for certain vehicles in conditions #3 and #4 (“good” and “fair”) rising faster—in some cases much faster—than values for number #1 and #2 (“concours” and “excellent”) cars. And we’re not talking esoteric, hand-picked examples here. Think, pre-1990 911s, 2005–2006 Ford GTs, and many SUVs. In some cases, the trend is stark: A range of 911s, including all the 1974–1989 911s (except Turbo 930s), saw double to triple the appreciation rate for number #4 cars versus number #1 cars between 2016 and 2021.

What’s causing this? In some cases, buyers may simply be adjusting their expectations in response to value increases for the model. People who could have afforded pristine air-cooled 911s a decade ago might now be forced to consider models in rougher shape, increasing demand and prices for those. This isn’t unlike what often happens with urban gentrification: Renters priced out of posh city blocks look to more affordable areas…thus driving development and price increases in their new neighborhoods.

Yet there’s more going on here than economics. As we’ve noted many times, younger collectors are entering the collector car market at a brisk pace, and they often want to use their cars differently than older collectors.

“I’m 45, and when I show my car at a concours event I’m consistently the youngest participant,” said Nathan Merz, owner and founder of Columbia Valley Luxury Cars in Redmond, Washington, which specializes in classic 911s. He also owns several air-cooled models, including both “driver” and concours show winners. He sees few peers looking for the latter. “I enjoy showing my low-mileage reference models, but my friends have zero interest in getting up early, trailering a car to a resort, and then spending an entire day, or two, standing around at a concours. They’d rather drive their classic 911s to a local cars and coffee at 8, hang with friends for a few hours, then be home by 11 to spend the rest of the weekend with their family. They can’t do that with pristine 911s, so they buy driver cars, with plenty of mileage and obvious patina.” 

For some of these collectors, having a vehicle that looks like it has been driven may be as important as the actual driving. “It’s an unspoken badge of honor projecting to the world that this vehicle has been enjoyed the way the engineers originally intended,” notes Michael Harley, Executive Editor at CarExpert.com and author of One More Than 10: Singer and the Porsche 911. “It reminds me of the trends we are seeing with fashionable blue jeans—consumers are seeking pants that are worn and ripped during manufacturing, so they can project an active lifestyle.”

They’d rather drive their classic 911s to a local cars and coffee at 8, hang with friends for a few hours, then be home by 11 to spend the rest of the weekend with their family. They can’t do that with pristine 911s, so they buy driver cars.

Nathan Merz, owner, Columbia Valley Luxury Cars

Let’s be clear that we’re not recommending you go out and buy a basket case. “My general goal when buying used cars is to find one that’s been beautifully maintained by a fastidious owner, but with higher miles,” notes Doug DeMuro, he of YouTube fame and, more recently, the founder of online auction sit Cars and Bids. “That way, you get the best of both worlds: good maintenance (and thus reliability), but also higher miles to keep the transaction price down.”

It’s also worth noting that not all classics are following the trend we’re describing. Condition #1 and #2 classic Ferraris, for instance, are appreciating faster than #3 or #4, with the F50 being the only contrarian. That might make sense for vehicles with Ferrari maintenance costs, but the same goes for pre-2000 Acura NSXs, Chevrolet Corvettes, Dodge Vipers, and Toyota Supras. These models seem suited to driving rather than trailering, but values don’t reflect it— mint condition cars are still appreciating faster.

There is one segment of the market clearly suggesting a trend toward drivers versus show vehicles: classic trucks and SUVs. Looking at Hagerty Price Guide data for 1948–1986 Ford F-150s, 1947–1991 Chevrolet C/K trucks and Blazers, and 1966–1996 Ford Broncos, almost every model from every generation has seen substantially greater appreciation in condition #3 and #4 vehicles over condition #1 and #2 vehicles. The same is true of Toyota Land Cruiser FJ55s, although the FJ40s and FJ60/FJ62s don’t follow this trend (better condition versions of those models have appreciated faster).

Just as with classic (and robust) 911s, classic trucks and SUVs are both highly durable and highly capable. Restoring them to concours condition, then parking them for fear of nicking the flawless paint, feels like a waste of resources—not to mention life-embracing fun. People want to experience the wide range of use cases these vehicles offer, and the valuation trends confirm it. And just like 911s, many classic trucks and SUVs have become profoundly more expensive over the past decade, perhaps forcing many would-be buyers of mint-condition examples to “lower” their standards.

Last but not least, the growing appetite and surging prices for over-the-top restomods may also be increasing demand for more worn vehicles. Consider, for instance, the cottage industry of custom Bronco builders who recently descended upon Scottsdale for Barrett-Jackson’s auction. Logic, preservationist principles, and profit dictate that most of these customizations start with less-than-perfect examples—no point in gutting and cutting a pristine original.

Whatever the underlying causes, valuation data prove there are pockets of the market rewarding less-than-perfect cars. Will the trend expand? Could we hit a point where driver cars have more demand, and higher prices, than perfect cars? That’s hard to imagine. These examples do, however, throw more cold water on the already dubious proposition of restoring for profit—in many cases that daily driver will appreciate just fine without requiring a costly, time-consuming makeover.

If nothing else, it’s comforting that a car enjoyed as intended can also make a great investment. If you enjoy driving more than detailing and showing, you’re hardly alone.

Comments

  • R L Ward says:

    I purposely bought a unmolested 1959 J code Thunderbird Convertible in good condition. I’ll be able to perform “deferred maintenance” and take it to local gatherings and road trips. Very different from taking a perfect classic somewhere and not being able to let it out of your sight.

  • Somer says:

    I have both preservation and restored motorcycles. People ask me why am I riding such a nicely restored bike? I point out that if anything happens, it can be restored again. Original paint , not so much. However ALL vehicles respond well to being used. When I see zero miles since restoration , I think to myself “Do I want to be the last link in quality assurance?”. Something with a mild patina is great to use. Kind of like your tweed jacket with sleeve patches.

  • Rick L. says:

    Maybe it is because people like to DRIVE their cars, hmmm…that is a novel idea. Sure some cars are sort of artistic static “sculptures”. I prefer mine as rolling down the highway usually under their own power with me in it. This may sound foreign to those with pristine “collector” cars that are in a trailer or bubble their entire life. But because this is America to each his/her own. Enjoy them anyway you can.

  • Mike Heroy says:

    I try to drive everything that I have, from Model A’s through a Mercury Marauder, with Rolls-Royce, Bentley, Fords, and Lincolns in between. If we find that we’ve made a car “too nice to drive”, I usually think of selling it. We consider under 10k miles in a year on the collection to be a slow year.

  • Greyhound1961* says:

    Partly because there is a certain elitism in driving a car that looks as though you are the original owner who has driven the car in many an adventure, and that you are not just another nouveau riche hedge fund dick who buys cars the way the Dutch bought tulips in the 17th C.

  • John Presson says:

    I prefer a classic to be the best and most perfect it was made to be….just like a good woman….LOOK YOUR BEST !!!

  • Daniel Plotkin says:

    I bought a 68 Chrysler New Yorker Coupe for not a lot of money because it had a 440, Torque-Fight 727 and posi rear and its cosmetics would permit it on most local and regional show fields. Much of my collection is such that I am uncomfortable leaving them on a show field and walking around. The New Yorker allows me to park on the show field where I waive judging and avoid anxiety. Besides, if I need to stop at the store on the way home it is no problem to park it anywhere there is a berth of sufficient size. It’s my “beater” collectable. Allows me to drive an old car regardless…

    Danny Plotkin

  • Jim Neiburger says:

    Believe it or not, old cars, like us, are not static. A 400 point restoration ages, too. If you want it’s condition to mellow, just wait a couple of years. That perfection fades a bit with time. The point is to enjoy them as much as you can and in the way you like.

  • drhino says:

    Mentioned in the comments, but not really touched on in the article to any real degree is the lure of original paint. If it has the paint it left the factory with (along with as many parts as possible)— that is far more desirable (to me) than something that has been restored.

  • Todd Wood says:

    Just bought a 1970 base Corvette conv with big block hood, all restored mechanicals for 10k. Comes with new rubber on Creager wheels. Never wrecked, I’ll be the 3rd owner. Looks good at 15′ or driving by Needs a new top, carpets, seat foam and covers, some weather stripping, something I can do, and new paint, going to Los Algodones, Mexico for a daily driver paint job for around 2k. Comes with nice hard top, stock wheels, extra stock hood, other parts . lot’s of good cruzin left in this one.

  • Reegeemon says:

    Mine-McBurnie California Daytona, 76 C3 chassis.
    Try to drive at LEAST 2500 yearly.

  • John Sproston says:

    Three years ago I sold my 1958 unrestored Studebaker Scotsman wagon, needing engine work, used by me since 1980 as a second car. The new owner entered it in 2019 in a New England show and it took second place in the unrestored category. Unrestored may be the way to go from now on.

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