Some physicians are discoveringthat being passionateabout their hobby can bea lucrative investment. Forthose practitioners who spendtheir free time tinkering with automobiles,restoring that old jalopy inthe driveway may be a worthwhileinvestment option.
Keep in mind that not everyclassic is valuable, so choosingthe type of car to restore and sellis of utmost importance. Forexample, antiquesâ€”built between1926 and World War IIâ€”can cost you more to restorethan the car is actually worth.Brian Grainger from The Guildof Automotive Restorers, Incsays, "I don't ever tell someonethey should restore a [classic] car withmaking money in mind. Generally,restoration costs outstrip the endvalue, even in a significant car." Thecost of restoration for an antique is difficultto put a price on, therefore, "anyrestoration shop that gives someone anumber doesn't know what they'redoing," Grainger warns. "You neverreally know until you send out the lastinvoice, because there are just so manythings that can change."
Get in Gear with Muscle Cars
Dr. James Cherry is a physician-turned-mechanic who is restoring a1963 Split-Window Corvette in hisspare time. His particular passion formuscle cars has made him quite a profit."What makes them collectable is notonly quality but a limited number beingavailable," Cherry explains. "Youdon't just want an old car; you wantrare options, low production." Buyinga regular off-the-production-line carand adding rare parts with matchingedition numbers to create a clone car ofthe more expensive versioncan bring in bigmoney too. "In theCamaro market, someof the clone cars routinelysell for $70,000plus," Cherry says.
Production rarity andmatching parts numbersaren't the only angles toconsider when pursuingthe right investment.Style plays a big factor in the final sellingprice. Dean Kruse of KruseInternational, which auctions 10,000collector cars a year, says, "A real stylishconvertible might go up as muchas 20% a yearâ€”some of them havedoubled." Boxy sedans tend to sell forless than muscle cars with more flairand curves.
Starting with a great car body isn'tthe only element for restoring a carwith an elevated price tag. Appeal canalways be fabricated through itsrestoration. For example, Cherry ismarketing a 1969 Corvette that hasthe production number of 666 as the"Mark of the Beast." With the car'sblack paint job and blood-red interior,Cherry created an elevated desirability,combining production rarity with aunique and eye-catching style. "Somepeople [will] look at the car and thinkâ€˜how cool is that?'and pay $5000 to$10,000 more purely because of that," Cherry explains.
Driven to Success
To start a restoration investment,Bryan Gregory from Advance AutoParts suggests doing your research."It's not infinite as to what parts wereused on what particular muscle cars tomake them unique. If you're going torestore a car because it's aninvestment, you've got to stickwith that original spirit." Joining a car club is a goodway to gather knowledge on aspecific car. Members haveexperience and connections tohelp you restore your car, andbecause a large percentage ofclub members are physicians,finding a car maven with anunderstanding of how preciousyour time is won't betoo difficult. If you don't have the luxuryof an automotive club, the Internetcan be a great source, but Gregory cautionsagainst gathering too much informationonline. While Web sites fromreputable dealers are packed withinformation, buying parts onlinecan be a gamble.
When choosing a car torestore, keep in mind that youwill need to find someone toeventually purchase it. Buyers foryour car will be the demographicwith the most expendable income,which is the reason musclecars currently sell so well. Buyerslook for nostalgia. "They aregoing to be looking for cars theyhad as a kid," Cherry says. "It'sabout 25 years after they first had alove for cars. That's a time where thecars start to appreciate."
"It's like any other market," Cherryexplains. "If you don't understand it,you tend to lose more than you standto gain. You can get taken advantageof very easily." research,research, research. Because of all theshared information on the Internet,prices are fairly universal, so knowinghow much to invest in the car from thestart is as important as proper restoration.You don't want to invest more inthe car than you can sell it for.Watching auctions, such as Barrett-Jackson (www.barrett-jackson.com) orKruse International (www.kruse.com),can also give you a good idea of whatcars are worth. Auctions can bring inbig money, because the competitiontends to drive up the prices quickly."At auction, competitive biddingdetermines the price. There is no maximum," Kruse says.
Even just buying and selling partscan be a good investment, as Cherrydiscovered. "Instead of buying stock, Ijust buy rare parts and throw them inthe closet," he says. "Tremendousreturn on that."
Cherry admits, that as a physician"my time is a lot more precious to methan the money," so what he doesn'thave time to learn, he takes to professionals.Sticking within your talentlimits is important in preserving thequality of restoration. If you don'tknow engine mechanics, take it to aprofessional. Restoring somethingincorrectly can depreciate your car'svalue. Spending the money for anexpert job can be worth the expense.Restoring a car takes an investment oftime and money, but the passion putinto the car will be reflected in yourfinancial return.
Competitive Auto Prices Set at Auction
The following are some of the prices dealt at the Kruse International Auction:
â€¢1965 Chevrolet Corvette Roadster: $75,000
â€¢1966 Dodge Coronet 426 Hemi: $70,000
â€¢1967 Chevrolet Corvette 427 Convertible: $101,000
â€¢1967 Pontiac GTO Sport Coupe: $40,000
â€¢1970 Dodge Challenger R/T 440 Convertible: $87,500
â€¢1970 Plymouth Cuda Convertible: $125,000
â€¢1970 Mercedes-Benz 280 SL Roadster: $44,500
(Auction results from various locations in October 2006)