Shift Passion for Cars into $

Some physicians are discovering that being passionate about their hobby can be a lucrative investment. For those doctors who spend their free time tinkering with automobiles, restoring that old jalopy in the driveway may be a worthwhile investment option.

Keep in mind that not every classic is valuable, so choosing the type of car to restore and sell is of utmost importance. For example, antiques—built between 1926 and World War II—can cost you more to restore than the car is actually worth. “I don't ever tell someone they should restore a [classic] car with making money in mind,” explains Brian Grainger from the Guild of Automotive Restorers. “Generally, restoration costs outstrip the end value, even in a significant car.” The cost of restoration for an antique is difficult to put a price on, therefore, “any restoration shop that gives someone a number doesn't know what they're doing,” Grainger warns. “You never really know until you send out the last invoice, because there are just so many things that can change.”

Get in Gear with Muscle Cars James Cherry, MD, is a physician-turned-mechanic who restored a 1963 Split-Window Corvette in his spare time. His particular passion for muscle cars has made him quite a profit. “What makes them collectable is not only quality but a limited number being available,” Dr. Cherry explains. “You don't just want an old car; you want rare options, low production.” Buying a regular off-the-production-line car and adding rare parts with matching edition numbers to create a clone car of the more expensive version can bring in big money too. “In the Camaro market, some of the clone cars routinely sell for $70,000 plus,” Dr. Cherry says.

Production rarity and matching parts numbers aren't the only angles to consider when pursuing the right investment. Style plays a big factor in the final selling price. Dean Kruse of Kruse International, which auctions 10,000 collector cars a year, says, “A real stylish convertible might go up as much as 20% a year—some of them have doubled.” Boxy sedans tend to sell for less than muscle cars with more flair and curves.

Starting with a great car body isn't the only element for restoring a car with an elevated price tag. Appeal can always be fabricated through its restoration. For example, Dr. Cherry marketed a 1969 Corvette that has the production number of 666 as the “Mark of the Beast.” With the car's black paint job and blood-red interior, Dr. Cherry created an elevated desirability, combining production rarity with a unique and eye-catching style. “Some people [will] look at the car and think ‘how cool is that?' and pay $5,000 to $10,000 more purely because of that,” Dr. Cherry explains.

Driven to Success To start a restoration investment, Bryan Gregory from Advance Auto Parts suggests doing your research. “It's not infinite as to what parts were used on what particular muscle cars to make them unique. If you're going to restore a car because it's an investment, you've got to stick with that original spirit.” Joining a car club is a good way to gather knowledge on a specific car.

Members have experience and connections to help you restore your car, and because a large percentage of club members are physicians, finding a car maven with an understanding of how precious your time is won't be too difficult. If you don't have the luxury of an automotive club, the Internet can be a great source, but Gregory cautions against gathering too much information online. While Web sites from reputable dealers are packed with information, buying parts online can be a gamble.

When choosing a car to restore, keep in mind that you will need to find someone to eventually purchase it. Buyers for your car will be the demographic with the most expendable income, which is the reason muscle cars currently sell so well. Buyers look for nostalgia. “They are going to be looking for cars they had as a kid,” Dr. Cherry says. “It's about 25 years after they first had a love for cars. That's a time where the cars start to appreciate.”

Driven to Learn

“It's like any other market,” Dr. Cherry explains. “If you don't understand it, you tend to lose more than you stand to gain. You can get taken advantage of very easily.” His advice: research, research, research. Because of all the shared information on the Internet, prices are fairly universal, so knowing how much to invest in the car from the start is as important as proper restoration. You don't want to invest more in the car than you can sell it for.

Watching auctions, such as Barrett-Jackson or Kruse International, can also give you a good idea of what cars are worth. Auctions can bring in big money, because the competition tends to drive up the prices quickly. "At auction, competitive bidding determines the price. There is no maximum," Kruse says.

Even just buying and selling parts can be a good investment, as Dr. Cherry discovered. “Instead of buying stock, I just buy rare parts and throw them in the closet,” he says. “Tremendous return on that.”

Dr. Cherry admits, that as a physician “my time is a lot more precious to me than the money,” so what he doesn't have time to learn, he takes to professionals. Sticking within your talent limits is important in preserving the quality of restoration. If you don't know engine mechanics, take it to a professional. Restoring something incorrectly can depreciate your car's value. Spending the money for an expert job can be worth the expense. Restoring a car takes an investment of time and money, but the passion put into the car will be reflected in your financial return.

Competitive Auto Prices Set at Auction

The following are some of the prices dealt at the Kruse International Auction:

1956 Continental Mark II Two Door Hardtop, $27,500

1957 Chevrolet Bel Air Convertible, $110,000

1959 Edsel Corsair Convertible, $38,000

1965 Buick Skylark Coupe, $16,500

1967 Chevrolet Chevelle SS Two Door, $30,000

1968 Plymouth GTX 440 Two Door Hardtop, $28,000

1970 Oldsmobile Cutlass Convertible, $18,500

1982 Cadillac Eldorado Biarritz Touring Coupe, $15,000

2005 Superformance Cobra MKIII Replica Roadster, $47,000

2005 Mercedes-Benz CLK 500 Convertible, $28,000

(Auction results from various locations in 2008)