Collector cars flex muscle vs.
markets. Rekindled nostalgia fuels red-hot sales as stocks
By Earle Eldridge
The classic car market is on fire,
fueled by sales of tire-smoking American muscle cars from the
'60s and '70s.
Some buyers, such as Greg Schmidt, 53, of Yorba Linda,
Calif., are feeding nostalgia. In June, he bought a 1969
Chevrolet Camaro, something he'd longed for since he sold the
'69 Camaro he bought new.
Others, such as Tom Souza, 61, of Los Angeles, are
investing. He hopes to clear $35,000 when he puts a 1957
Chevrolet Corvette he has restored up for auction for $75,000
Whatever the motivation, the classic car business is
greeting these buyers with open arms. They are seen as
replacing the dwindling last generation of vintage car buyers,
who favored the '30s and '40s Cadillacs, Buicks and Fords of
Industry observers say many buyers are driven by a
post-Sept. 11, do-it-now attitude and a longing for something
uniquely American from a simpler time. Others, looking at
their latest investment reports, see a classic car as a
purchase that can provide some fun while holding its value
despite the whims of Wall Street.
The one worry: that some buyers might be out to make a buck
rather than love a car, a situation that alarms purists and
can send prices skyrocketing.
But that concern aside, industry insiders say muscle-car
buyers are definitely giving the business a shot in the arm.
* Attendance and sales are up at classic-car swap
meets, shows and auctions. Crowds at the four-day
Barrett-Jackson auction in Scottsdale, Ariz., in January,
considered the premier collector-car event, swelled by 25%
over last year. Sales at the auction topped $26.9 million,
more than a $500,000 higher than last year. A record 86% of
vehicles offered for sale were sold.
* Car brokers say they are getting more requests for
advice on what to buy and what to avoid. ''People are getting
educated in this market,'' says Ed Suddarth, a broker for
car-buying firm Concourse West. ''It's a lot easier to sell a
car than it was two years ago.''
* After-purchase businesses are thriving. Jim
Spoonhower, vice president of market research for the
Specialty Equipment Market Association, says the
car-restoration business has grown from $64 million in 1995 to
$1 billion in 2001. Sales at Classic Industries, a parts
supplier in Huntington Beach, Calif., jumped 30% this year.
And Hagerty Classic Insurance, which specializes in collector
cars, says business is up 20% from a year ago.
All that activity also means higher prices. Buyers can
spend from $3,000 for a partially restored '67 Mustang to $5
million for such museum-quality cars as a rare 1966 Ferrari
But those in the industry say it isn't the old Ferraris but
the finely restored muscle cars that are driving the current
At January's Barrett-Jackson auction:
* The owner of a rare (only four were built) 1969
Plymouth Roadrunner convertible with a 426 Hemi engine and a
four-speed manual transmission refused a top bid of $135,000.
He bets he can get more later.
* A 1970 Chevrolet Chevelle convertible with a
454-cubic-inch LS-6 engine and four-speed manual transmission
sold for $172,800.
* A 1957 Chevrolet Bel Air, called Chezoom by
renowned customizer Boyd Coddington, who built it, sold for
For many, it's the right time
Many buyers of vintage muscle cars ''now are at a place
in their lives where they have the ability to buy those toys
and relive their youths,'' says Tim Sprague, CEO of Kruse
International, a collector-car auction company that was
recently bought by eBay. ''It's almost like buying a good lake
Schmidt, a private contractor, spent almost a year looking
at classified ads and searching the Internet for the right
1969 Camaro to buy. He ended up paying $10,000 for a bright
yellow one being sold by the estate of the original owner.
''This was not a midlife crisis,'' he says. ''I love the
car, and I only drive it on weekends.''
The only change he plans to make is to the interior, which
originally was lime green but had been spray-painted black by
the first owner.
He says he was offered $14,000 for the car the day after he
bought it, but he wasn't looking at it as an investment.
Yet, many classic car buyers are, in fact, looking for
an investment. ''People are disgusted with the stock market,''
says Keith Martin, publisher and editor of Sports Car
Market magazine. ''To pull thirty or forty grand out of
the stock market to buy a Mustang doesn't seem so stupid
anymore,'' especially when the value could increase 30% in two
or three years.
''People who normally have been putting their money into
the stock market are now putting it in cars,'' says Ron
Kowalke, associate editor of Old Cars Price Guide and
Old Cars Weekly. ''Even if the investment tanks, they
still have a car they are proud to own and drive.''
Tony Monopoli, executive director of the International
Automotive Appraisers Association, says he's ''seeing so many
new faces and investors that it's obvious that the stock
market isn't doing it for them.''
Souza, a retired police officer, is an investor, although
not one of those new faces. He's been restoring '57 Corvettes
for profit since the early '70s.
''I don't do this for a living, but I am looking to
double my money on the car,'' he says of the one he's putting
up for sale -- a car he wouldn't dream of driving for fear it
might get damaged. ''I've been able to do a lot of things,
such as buy a nice house, with the money I've made from
He has restored 30 Corvettes so far. He says he loves the
'57 Corvette because it had a 283-cubic-inch engine with 283
horsepower and was a consistent winner on the racetrack.
Souza keeps one '57 Corvette that he races, but he will
be looking to buy another restorable one with the money he
makes from the auction.
Speculators not welcome
While longtime collectors and hobbyists welcome the
burst in activity, they fear that speculators, driven solely
by the pursuit of money, could drive prices up too far, much
the way they did in 1989 and 1990.
Monopoli says he sees a key similarity between today's
collector-car market and the one at that time: The stock
market was tanking during both periods.
Back then, speculators might buy a car, then take it to an
auction two months later and double their money, particularly
with Ferraris and other exotic vehicles.
But most observers say those entering the market now want
fun along with their investment -- not a trait of speculators.
''Whenever the stock market goes down, classic-car sales go
up,'' says Mary Ann Liebert, former publisher of Automotive
Investor. ''But these are not speculators. These
are people who will buy these cars because they love them, and
they want to own them.''
Car broker Suddarth estimates that speculators are less
than half of the new buyers entering the market.
McKeel Hagerty, president of Hagerty Classic Insurance,
says people are renewing their insurance more often, leading
him to think that speculators haven't flooded the market yet.
''We retain about 93% of everybody we have. The people we have
buy more cars than they sell,'' he says.
In the end, it's more nostalgia than greed driving the
market, the experts say.
That's what led Rick Garmon, 43, of Stone Mountain, Ga.,
into a farm field last year to pull out a rare 1970 Plymouth
Superbird, the race version of the Plymouth Roadrunner, that
was rusted and had a busted engine.
Even so, Garmon, an auto repair shop owner, paid $20,000
for it and will spend $14,000 and almost a year getting it
close to factory original.
''People say I'm crazy,'' Garmon says. ''But the first
thing I'm going to do when it's finished is ride around to all
those people who came around and made fun of me and show them
what hard work can do.''Cover