The Adviser

How I learned to stop worrying about the bubble and buy classic cars

by Colin Comer
5 January 2022 5 min read
Photo by Getty Images

When I was asked to be the “smart collector” and offer advice for this rapidly moving market, I had to chuckle. Don’t get me wrong—I hope that a few of the deals I’ve made in my 30+ years of collecting will appear smart in retrospect. Many would argue they sure didn’t at the time, but as the golfer Gary Player once said, “The more I practice, the luckier I get.” Lord knows after three decades and literally hundreds of trades, I’ve certainly had a lot of practice!

But as for the question that presently looms large: Is the collector car market in a bubble? My short answer is, “No.” Bubble implies all of these gains will go “pop” and vanish. That’s not happening. My long answer is…well, keep reading.

Whether you like McLarens or Ferraris or Kia Tellurides, chances are you’ve noticed values skyrocket in recent months. Classic car auctions, both online and in person, have been going gangbusters: In 2021, they managed their highest combined sales revenue, ever. Of course, none of this is isolated. New cars, used cars, real estate, oil, durable goods—you name it and it’s going wild. 

Is this a result of everybody being on house arrest in 2020? Supply and demand during a global pandemic? Labor and materials shortage? There is a whole army of Ivy League grads who can answer that a lot better than I can. They might also venture guesses as to how long this frenzy will last (although those guesses might well be wrong).

I’ve been through enough cycles to say this has all happened before. The market is cyclical. Tastes change. However, out of all investment properties, I’ve always felt most comfortable buying truly good collector cars. Despite fluctuations over the years, blue-chip collector cars have always—well, OK, almost always—maintained an upward trajectory. Plus, unlike the stock market, the collector car market allows us to have fun with cars.  

I still feel good about collecting cars. I do, however, think one should proceed with caution. Never bank on incredible growth being sustainable.

Nobody wants to make a financial mistake, but I can tell you that I have never seen a car depreciate to zero or simply disappear, leaving only a worthless piece of paper behind. 

So, yes, I still feel good about collecting cars. I do, however, think one should proceed with caution. The market has expanded a lot of late and, logically, I expect it to contract in the future, at least in certain areas. Never bank on incredible growth being sustainable. That means now more than ever is a time to be doing things right. To me, “doing things right” means buying what you love at a price you are comfortable with, not what those with the tea leaves tell you is a “great buy.” It means you can walk into your garage at night, beer in hand, flip on the lights, have a seat, and feel good about what is in there, no matter what the next price guide says. If your collection means nothing more to you than values on a spreadsheet, well, we might not be able to have beers together.

Investment Intuition

Now that we’ve established I’m not the right guy to ask for investment advice, let’s get back to cars. What I can tell you, from my own experience, is that one simplistic idea has always worked for me: I buy what I love. I know, nothing we all haven’t heard a million times before, but it bears repeating as it seems the best of us forget this one easy rule from time to time.

See cars in your garage that you don’t love? Consider the current market, with many cars experiencing peak or near peak values, a chance to clean up those mistakes. Sell to somebody who does love it and use the cash to find the car you should have bought in the first place. Even if you don’t have a car you regret buying, maybe you have one that’s worth more than you ever dreamed. It might be time to cash out and use the gain to move into a car you once couldn’t justify buying.

The biggest mistakes I’ve ever made were listening to what people thought I should own. When I started collecting vintage Ferraris, I bought a great 246 GTS Dino. But the Ferrari silverbacks told me I should have a front-engine V-12 car instead, so I moved through some of them, including a number of 275 GTBs—which admittedly I am still quite fond of. But I always enjoyed driving the Dino more, so I sold the others and kept the Dino. Sure, financially it didn’t work out nearly as well as if I’d have kept a four-cam, but I still smile every time I drive my Dino.

I’m also a Shelby guy and was fortunate enough to buy a few street Cobras before they became so precious. Again, the elder statesmen of the Cobra world told me that a competition Cobra was really where it was at. Although I’d put tens of thousands of miles on my street Cobras—not just driving them around but also using them on 1,000-mile tours and rallies—I thought, “OK, that makes sense. If I can get a comp car, I will.” Eventually I found a great 427 S/C. As much as I loved the car, the history, and its general bad-assedness, the thing just did not fit my user profile. It was too hot, the unmuffled leg-burning side pipes were too loud, it had no glove box or door pockets, and its trunk was full-O-huge competition fuel tank. It was obviously not an ideal Cobra for what people like me enjoy using them for. In aviation speak, it just didn’t fit the mission profile. So off it went! The street Cobras remain and are still a perfect fit, despite being nowhere near as rare or generally coveted as a comp car.

Market Navigation

How does one negotiate today’s market? Well, speaking for myself, I treat it the same way I always have: I review my collection and decide if there are any cars the market values higher than I do. If so, and if I determine I can live without them, I think about selling. 

If there is a car I want to own, I make a similar calculation. Do I value it as much or more than the market does currently? If the answer is yes, and I don’t think I can’t live without it, I buy. As with anything in life, if you’re generally OK with the price of poker, then sit down, Player, and have some fun. 

Admittedly,  these days, more cars on my short list have surpassed my value limit. For example, over the last few years I’ve been lusting for a Ferrari F40. When I came of age in the 1980s, the F40 planted a gold-plated treble hook of desire within my brain. I owned one, briefly, in the early aughts, and paid somewhere in the upper-$200K range. But that was a stretch and the maintenance terrified me, so I jumped off. The fire still burned. They moved up in value methodically, and about three years ago I found one that ticked all of the boxes.

The “ask” was $1.25M. I flew out and offered $1.15M and was declined. My Ferrari-fluent friend who was with me said, “Wow, another day two fools met.” I made a few more runs at examples for about the same money, including one at auction in March 2020 right as Covid-19 was taking hold. But now, just 18 months later, it seems any decent F40 starts above $1.5M, with many going well beyond. At that price, I have resolved to enjoy F40s from a non-ownership position. Not that I think they aren’t worth what they’re trading for; they just aren’t worth it to me.

Bubble 101

To summarize: Practice makes perfect. Buy only what you love. Sell only when it makes sense. Buy only when you can justify paying market price. Be patient, be diligent, listen to your heart, your significant other, your banker, your shaman, or whomever you lean on for guidance. Oh, and never, ever treat glorious old cars as an investment play. That’s the best way to ruin the fun!

Comments

  • David Ochser says:

    Great article Colin! Happy New Year and see you in Scottsdale

  • Victoria says:

    Excellent article! Sound advice.

  • Rich Myers says:

    Ok…it was much easier for me…For 50 years I looked at vintage sports cars as rolling sucpture…and enjoyed working on and driving them…so 50 cars later I guess I have a collection… like my children I can’t get rid of them….I go to my shop every day and find something to do….as with any thing mechanical… I have problems to solve…..😃

  • Scott Ales says:

    The article is spot on if I may agree. But the last sentence is the most powerful! Well done Sir.

  • Jim Rosenthal says:

    Could not agree more. Buy what you love, from a reputable source, at a price you are comfortable with. If cars are an investment in anything, they are an investment in quality of life, not in retirement funds. If you make money on a car, that’s nice, but don’t count on it.

  • Greg Zelazek says:

    A great perspective Colin. Thanks

  • Conard Galliway says:

    Your article is spot on! I am a Corvette nut and I still have the 1966 coup I bought when in college. I have owned 15 corvettes and still have 10 that I really enjoy. But your article speakers to me. I want another C2 and it doesn’t need to be a BB. It is time to figure out what I can live without and get what moves me. All the best!

  • Dave Abel says:

    Great article Colin. As the owner of a 1969 Shelby GT350 Fastback I completely agree. I LOVE the car and although some Shelby purist types diss the fact it has the stock Ford automatic transmission, I love the ease of use as well as the factory AC that still blows cold. (Perfect for cars here in AZ!)
    I also am planning to sell a 1966 Corvette convertible I’ve owned for 15 years and move on to a new C8
    Convertible. It’s been a great car to own and it’s won dozens of awards at shows over the years – but it’s simply time to move on to something new and different.

  • Robert says:

    Great article. Agree 100%. If you buy what you like and can afford, aka, justify, the expense. Buy it. And if it doesn’t gain value, who cares , you love it and enjoy it. If it does? I’m not sure, as most of my lives I cannot see parting with. (I still have my first car, a 68 Camaro, and have acquired a few more over the the past 34 years, some I’ve let go, most I can’t:)

  • Mark L Bedel says:

    Well, I guess the question boils down to why are you collecting? Is it for investment purposes only? Is it emotional? Is it some blend? I imagine that it is different for everyone.

  • Dan says:

    What a great article, I’ve read it multiple times and forwarded to friends. Such a refreshing take – it’s what many of us think all the time but never read. I’m gonna go drive my absolutely not collector quality trans am and smile every minute today. Kudos.

  • Gary Boehler says:

    Colin,

    I have gone both ways: “perceived value” and “what I love.” My greatest feelings of satisfaction come from owning what I love. I walk into my garages and look at what I think of as art and not just hunks of metal from bygone eras. How does it get better than a C2 coupe, a first generation Z-28, or a tri-power GTO?

  • Jay Dee says:

    Vintage they ain’t. Classic they are (Ferraris weren’t being made during the ‘vintage’ car period.)

  • Jim Fay says:

    Well written article Colin. Cars should ALWAYS be about what you enjoy owning. I have never been high dollar car guy. But living in the basement of car collecting (which is where I believe 99% percent of car guys live), I’ve always said yes to the cars I like/love/can afford and I’ve never been disappointed in what I hang on to and what I sell. For the 99% it should always be about affordable enjoyment.

  • Rick L. says:

    Or, do buy them to DRIVE them !!!!! If you buy for investment, like stocks or other commodities, you do NOT get personal about it. The most successful drug dealers are the ones that DON’T use it. There was a motto back in the old days, “Don’t mess with the merchandise”.

  • John Dirven says:

    Well said Colin. I have a poor man’s collection and I wouldn’t have it any other way. It’s been completely funded by trading in old pickups. All total my collection is worth maybe $100,000, probably a bit more now, I don’t know. I currently have about 20 units that I consider part of the keeper group. In the evening I sit in a room with 7 or 8 of them on display along with some old tractors. They’re mostly projects or # 4s at best but they bring me fulfillment. I fix some up as the budget allows in my shop. When I’m gone the kids can have a nice auction day of the collection such as it is and celebrate their eccentric old dad.

    • Happy Linger says:

      Great article. I am a blue collar working stiff and have been collecting cars that I wanted and love. I currently have 12 classic/vintage vehicles in various stages, some drivable and some needing various amounts of work to be drivable. My major problem or perhaps complaint is that I dont drive the drivable ones enough to keep from needing constant maintenance, such as fuel going bad, batteries going bad, components leaking, etc. Am I alone or do I need to sell some of them to be able to drive the drivables enough to prevent problems I just mentioned?

  • James Richmond says:

    Some wise words here. And, for the love of everything holy, drive the machines! Partially because they need to be driven, partially so others can enjoy these mobile sculptures, and mainly for the pleasure of the experience.
    I still don’t understand why so many buyers seem to value low mileage; beyond avoiding some creases (or patina 😉 in the leather, I get nervous about seals and gaskets cracking when not bathed in oil for long stretches.
    And with all the rumours of odometers being rolled back — looking at you Ferrari — I’m happy to pay a lot less for a little more mileage!

  • JBaguley says:

    Remember, no one’s last gasp parting words have ever been, “I shouldn’t have bought the carrrrr….”

  • Marty Roth says:

    Great article and essentially solid advice-
    We keep and drive fun convertibles from just about every era for HCCA, AACA, VMCCA, and CCCA Tours.

    Yes, everything we have has received appropriate recognition on the show field, and my wife and I are both Senior Master judges, but the real enjoyment is driving tours with like minded souls we’ve come to appreciate over the past seven decades.

    Driving Brass-Era week-long tours in 1912 Oakland, 1914 Buick, and 1915 Hudson Phaeton, or Classic -era 1930 Packard, ‘37 Buick Roadmaster Phaetons or a 1941 Cadillac convertible, 10,xxx miles on a 3-month cross country drive in a 1954 Cadillac convertible, and another with the little red Corvette convertible, followed by a couple of cross- country top-down blasts with the ‘65 Corvair Monza – the memories are especially and long term enjoyable – almost as good as having our son, daughter, and grandson grow up participating in the hobby and having them appreciate the many, many mentors they’ve encountered along the way.

    Sure, we’ve had some very decent profits on some we’ve passed along, and a serious loss due to listening to “experts “ in that the ‘66 Mustang GT convertible, bought cheap for our then 14 year old son as a learning experience became a “Wow -too important a project not to have professionally restored “. Yeah, I learned a lot from that never-completed money pit – major loss and neither of us ever got to drive it.

    Now down to nine very enjoyable collectibles, all of them capable of cross country touring at the drop of a hat –
    Much more fun than our IRA !!

  • arno schmidt says:

    Very well written. As a 40+ year collector I tell folks that any cars I own that have increased dramatically in value proves the “the theory of unintended consequences”. Never should have sold even the ones that I did for the same reason.

  • Redvette2 says:

    “It means you can walk into your garage at night, beer in hand, flip on the lights, have a seat, and feel good about what is in there, no matter what the next price guide says.”….that’s me! Don’t even cover them so I can stare, clean, tweek and drive ’em to my hearts content.

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