The Newest Investment Vehicle
Collectors Driving Up Prices
In a Booming Classic-Auto Market



By JONATHAN WELSH 
Staff Reporter of THE WALL STREET JOURNAL
September 14, 2004

When Roy Maloumian wants to play with his investments, it doesn't mean shuffling funds from one retirement account to another. It means spending the afternoon cruising around in his favorite asset -- an old Ford Mustang.

Two years ago, Mr. Maloumian, an Oriental-rug importer in Philadelphia, paid $40,000 for a fast 1966 Mustang. A year later, he sold it for $60,000 and put the money into a similar model from 1965 -- for which he's already received six-figure offers. The 61-year-old's pet investment strategy? "I look for cars that I wanted but couldn't buy when I was 20," he says.

With many Americans struggling to find returns of 6% or 8% a year, a few investors are finding high yields in a different sort of investment vehicle -- the cool old car. These aren't just the Model A's and Packards that once ruled classic auto shows, but a range of cars with climbing prices, from European sports cars to early SUVs, station wagons and even hippie-era VW buses. Some of biggest gainers are fast American "muscle cars" from the 1960s and '70s, with prices up 70% in some cases in the past year -- and rare versions of early 1970s Plymouth Barracudas selling for more than $1 million.

To some degree, new interest in old cars is a reaction to the past few years' lackluster stock performance. But it's also a product of wealthy baby boomers seeking out cars they could only dream of owning a few decades ago. Now, 6.7% of drivers describe themselves as car collectors, according to CNW Marketing/Research of Bandon, Ore., up from 4.9% four years ago. Classic-car sales are also growing: At the Barrett-Jackson auction in Scottsdale, Ariz., considered a market barometer, sales totaled $38.5 million this year -- up roughly 40% from levels of the three previous years. And so far in 2004, Barrett-Jackson and two other top auctioneers, Christie's and RM Auctions, say 193 cars have sold for $100,000 or more, up from 154 for all of last year.

So what's the next big investment vehicle? To help make sense of the market, we sorted through hundreds of models collectors are interested in and put together our own list of 50 investment-grade cars from Model A's to '80s Ferraris. We focused on those common enough to show up at sales and auctions, and tracked each model's return over the past five and 10 years, using data from the National Automobile Dealers Association. Then, we talked with dozens of experts, including car-club members, appraisers, restorers, insurers and museum curators, to see which cars look likely to appreciate -- and which may have already peaked. With their insights in mind, we awarded each model a "buy," "hold" or "sell" rating.

The result was a snapshot of a market in flux. Interest is waning in the cars long considered "classics" -- the Duesenbergs, Packards and other luxurious cars from the years before World War II -- in part because fewer collectors are now alive who remember these expensive and seemingly unattainable cars of the '20s and '30s. Now that boomers are driving sales, the focus is on postwar autos. Collectors are restoring and showing not only models from the 1950s and 1960s but also cars as recent as 1980s Ferraris and DeLoreans -- and as quirky as 1970s AMC Pacers and Ford Pintos.


Most of all, collectors are swarming to muscle cars. These midsize American cars trace their roots to early '60s grocery-getters like Chevrolet Impalas and Dodge Darts. By the middle of that decade, makers had started offering big engines as optional equipment -- Pontiac executive John Z. DeLorean famously stuck a huge engine into a 1964 Pontiac Tempest and called it a GTO -- giving way to a generation of fast Chevrolet Camaros and Plymouth Barracudas.

Now, rare versions of Chevy Chevelles and Ford Mustangs that came from the factory with the most powerful engines and top options routinely fetch more than $100,000. Even versions of cars that were mass-market family transportation when they were new are seeing price run-ups, with show-condition 1969 Dodge Dart GTS convertibles now going for $17,000 -- up about 70% in the past year. At the very top of the muscle-car market, some cars are changing hands for well over $1 million.

Bill Wiemann paid $2 million this summer -- believed to be a muscle-car record -- for a rare version of a 1971 Plymouth Barracuda with a big "Hemi" engine and a convertible top. Mr. Wiemann, a 42-year-old construction-company owner and real-estate developer in Fargo, N.D., says he knows the price for his white and black 'Cuda seems extreme. But since only about 10 of these particular cars were made, he says, their rarity merits the price. "I don't want to look like an idiot for spending so much," Mr. Wiemann says. "I do think the price will keep going up."

But a market like this may call for caution. University of Michigan economist Donald Grimes says that when the stock market and other traditional investments lag, people tend to park their money in alternatives like cars, art or wine. But because these collectibles have limited intrinsic value, their prices are by definition speculative -- and become particularly vulnerable to shifts back to other investments. "When the stock market picks up, alternative investments suffer," he says.

The collectible-auto market has seen bubbles before, most recently with European sports cars at the end of the late 1980s, when Ferrari Daytonas from the previous decade sold for as much as $1 million. (Now, they fetch closer to $125,000.) These days, some collectors worry that the same speculative fervor may have blown some prices out of proportion. Buyers are spending "stupid money" on muscle cars, says collector Otis Chandler, a former publisher of the Los Angeles Times. (His own collection of 50-plus cars includes many from the first half of the 20th century.) "I think it's kind of a bubble."

'You Can Do Better'

Of course, many collectors say that making money from old cars is beside the point. Mr. Maloumian of Philadelphia says he considers his Shelby Mustang GT350 a sound investment, but the bigger point, he says, is being able to justify owning expensive toys that are fun to drive. (Mr. Maloumian also owns two old Porsches, a 1959 British MGA sports car and a 1930s Ford hot rod.) And Mr. Wiemann says he loves his $2 million 'Cuda and has no plans to sell it. "If you're looking for an investment, you shouldn't buy old cars," Mr. Wiemann says. "You can do better."

Those who do buy cars as investment vehicles enter a complicated world. Slight variations in body style, engine size and original options can make the difference between junkyard scrap or blue-chip investment. And finding investment-grade cars is becoming more challenging as more collectors enter the market, because it's harder to find old cars that can be fixed up cheaply and sold for a profit. Experts typically advise picking specimens that are already in top shape -- that is, good enough to compete at an auto show. Otherwise, count on getting greasy, or spending $100 or more an hour for restoration work.

Richard Solomon discovered that buying a mint-condition car wouldn't have been such a bad idea. The New York artists' representative was primarily looking for a sharp-looking car when he bought an angular 1977 Lamborghini Countach for $80,000 early last year. But he was also hoping it would appreciate in value. The car needed work, and over the next year he spent more than $20,000 to recondition the engine, transmission, brakes and suspension, and he says it would take another $50,000 to get the car into perfect shape. For now he isn't spending the money, given that a top-condition model goes for $100,000 at best. "I'm still behind the eight ball," he says.

In general, collectors agree to pay for some combination of rarity and aesthetic allure. Take the Ferrari 275 GTB, a mid-'60s two-seater with a curvy body, cartoonishly long hood and howling 12-cylinder engine. (Walter Matthau drives one in the 1970 movie "A New Leaf," and a convertible version appears in 1968's "The Thomas Crown Affair.") Ferrari made about 750 of them from 1964 to 1967. To the casual observer, the models all look pretty much the same -- and a modern Honda Accord could leave any of them in the dust at a stoplight.

Yet subtle differences can swing these cars' prices by hundreds of thousands of dollars. The first question collectors ask about a 275 is whether it's a "two cam" or a "four cam." Those with four-cam engines -- if you're shopping for one, pretend to know what this means -- go for as much as $450,000, twice what a two-cam fetches. Three carburetors or six? Six are better, adding $25,000 to the price tag. There are short-nose and long-nose versions, with long noses carrying a $25,000 premium. It doesn't end there: The company also made 12 "competizione" models with light alloy bodies that sell today for $1 million to $1.5 million, and three Le Mans race cars that one guide currently lists at $5 million.

The 'Starsky' Effect

While collector interest in certain cars may wax and wane, a few leading indicators suggest that a particular model could be poised to take off. Earlier this year, a film based on the 1970s TV series "Starsky and Hutch" put the 1976 Ford Torino in the spotlight, and on eBay Motors, a couple of them changed hands for around $20,000 -- three times what people were paying a year before. Old cars can also benefit from the buzz surrounding the release of a contemporary namesake. By the time BMW began selling its updated Mini Cooper S in 2002, for example, prices for original 1960s Minis had risen to about $19,500, up 56% from three years earlier. (Minis may also have benefited from appearances in 2002's "The Bourne Identity" and 2003's "The Italian Job.") This year, the best models are selling for more than $22,000.

Old Chevrolet Corvettes may be getting a similar boost right now. Donna Sandoval of the National Corvette Owners Association says the market in old 'Vettes has "been hot" since January -- which happens to be when Chevrolet unveiled its redesigned 2005 Corvette at the Detroit Auto Show. Mike (aka "Corvette Mike") Vietro, a restorer and dealer of vintage Corvettes, based in Anaheim, Calif., says collector activity saw a similar jump in 1997, the year of the last Corvette redesign. "The new car definitely has rekindled interest," he says.

Yet even in a rising market, some cars appear to be stuck in low gear. Edward Geller figures his vintage Italian sports car should have everything going for it, with its shapely look and engine designed for racing. The retired accountant in Morristown, N.J., says that over the years, he's repainted his low-slung blue car, rebuilt its V-8 engine and reupholstered the interior. Still, it isn't a Ferrari with a quarter-million price tag -- but a 1973 Alfa Romeo Montreal he could probably sell for about $16,000, about the same price as a new Hyundai Sonata.

"There's no way I'll ever make money on this car," Mr. Geller says. But it hardly matters, he adds, because he thinks he has the coolest-looking car on the road. "Why sell a car you love? I'd probably wind up buying another one anyway."

Our 50 noteworthy cars represent a swath of the collector market, focusing on cars available in large enough quantities that buyers stand a chance at finding one. Based on conversations with collectors, brokers, appraisers, car clubs, museum curators and other experts, we rated each a buy, sell or hold.

"Holds" are cars with prices in line with experts' expectations, but that they believe have continued opportunity for appreciation. Cars are listed alphabetically within each category. Typical price is for a drivable car in good condition; high price is for a show-quality car. Price changes over the past five and 10 years are for cars in typical condition. Current and historical price data provided by the National Automobile Dealers Association.

BUY Photos may not be of exact model listed.
Car Name Typical Price/High Price Last Five Years Last 10 Years 

1965 Alfa Romeo Giulia Sprint GT $8,900/$11,800 -14% +11% 
This curvy Italian two-door is less famous than the Alfa Spider (see: "The Graduate") and more widely available. Alfa expert Donald Osborne says it's overlooked, and thinks good examples should be going for closer to $15,000. 

1968 American Motors AMX $10,600/$16,300 +28% +33% 
Fast U.S. cars from the '60s are hot--except, so far, for this one. Collectors may give stubby coupe a second look as prices of other muscle cars rise out of reach. (Photo: www.moparpicturebook.com) 

1970 BMW 2002 $4,925/$6,800 +37% +11% 
The first sport sedan, some say, the 2002 had a smaller engine than muscle cars of the day but was fun to drive. Rust has made good specimens increasingly rare. 

1976 Cadillac Eldorado Convertible $11,800/$21,900 +28% +69% 
When safety concerns stalled U.S. convertible market, this gaudy Caddy was last of a breed. Nostalgia for '70s kitsch may spur prices. Add 10% for D'Elegance trim package, says NADA's Classic, Collectible and Special Interest Car Appraisal Guide. 

1965 Chevrolet Corvair Monza coupe $4,575/$5,225 +43% +100% 
Blame Ralph Nader's "Unsafe at Any Speed": Mint versions of cute, criticized Corvair cost about as much in today's dollars as they did in '65. They can hardly go down. 

1971 Datsun 240Z $9,300/$16,200 +18% +195% 
Long-nosed early "Z cars" were the poor-man's Jaguar or Corvette. Many expected vintage car fans to bite by now, but rust-driven rarity could still push prices up. 

1972 DeTomaso Pantera $25,500/$34,200 +9% +2.4% 
Italy's DeTomaso started with exotic, Ferrariesque bodies, then added Ford V8 engines, making its cars less hassle to maintain than other Italian imports. (Photo: www.1motormart.com) 

1985 Ferrari 412i Coupe (5-speed) $28,000/$37,200 -42% -50% 
Four-seater has angular 1980s styling--think Chevy Malibu. This is as cheap as a fast, 12-cylinder Ferrari gets, and '80s design keeps getting hotter. 

1970 Ford Boss 302 Mustang $31,300/$49,200 +42% +77% 
Racing history is catnip to collectors, and the "Boss" has it. These beat Camaros and Barracudas in Trans-Am races 35 years ago. Experts say prices could still rise. 

1970 International Scout a-ton $5,875/$9,100 +50% +99% 
Now, even pickups and SUVs are getting bid up. But these boxy, unadorned proto-SUVs were work vehicles; it's tough to find one that isn't beat up. 

1970 Oldsmobile Vista Cruiser $6,875/$12,150 +102% +183% 
A vintage station wagon? Its no muscle car, but models like the Vista, with clear roof panels, are gaining a following. Also see: Ford Country Squire, Dodge Monaco. (Photo: www.1motormart.com) 

1964 Pontiac GTO convertible $24,200/$34,100 +30% +65% 
Some call it the first muscle car--born when Pontiac's John DeLorean stuck a huge engine into a compact two-door. Prices for later GTO models are already soaring. 

1963 Studebaker Avanti R-1 $14,150/$20,700 +19% +27% 
Industrial designer Raymond Loewy was famous for furniture, and it shows in the chaise-on-wheels Avanti. The oh-so-early-'60s look should have upside. 

SELL Photos may not be of exact model listed.
Car Name Typical Price/High Price Last Five Years Last 10 Years 

1966 Aston Martin DB6 coupe $68,000/$95,000 +46% +63% 
Profit-taking time: This model succeeded the DB5 James Bond drove in "Goldfinger," and it cost more new. But now buyers are more interested in the Bond car. (Photo: www.heritageclassics.com) 

1967 Austin-Healey 3000 Mk III $29,500/ $41,700 +26% +51% 
Considered the cream of British roadsters, with low-slung body and wire-spoke wheels buyers love. Some have hit Ferrari price range, but they're slow and fussy. (Photo: www.hubcapcafe.com) 

1957 Chevrolet Bel Air convertible $59,700/ $85,800 +45% +64% 
The '57 Chevy is iconic--but they were inexpensive family cars then and they're not rare now, so experts say prices seem high. Pristine examples with options like tissue dispensers, fuel-injected "Super Turbo Fire" engine have fetched $100,000. 

1936 Cord 810 Phaeton $96,300/ $132,700 -1.5% -10% 
The Classic Car Club of America, which focuses mainly on pre-WWII cars, calls this a "full classic." In the past that nearly guaranteed appreciation--but now may indicate a car too old to appeal to many of today's collectors. 

1931 Duesenberg J $475,000/ $780,000 -12% -36% 
This big, hand-crafted car was a king of the market for decades. Older buyers recall how out-of-reach these were during the Depression. Boomers don't. 

1972 Ferrari 365 GTB Daytona $102,000/ $135,500 -8.2% -18% 
Handsome model's price has settled at around $125,000. Ferrari made 1,300-- four times as many as it did the earlier 275 GTB/4, which now sells for far more. 

1928 Ford Model A roadster $22,200/ $31,400 Flat Flat 
Once a car-show staple, its audience of older collectors is dwindling. Prices have been "marching in place" for 20 years, says appraiser Dave Brownell in Manchester, Vt. Thin tires and low horsepower make it better to view than drive. 

1958 Ford Edsel Ranger 2-door hardtop $5,650/ $9,300 +13% +14% 
Edsels flopped when new, with high prices, controversial styling. They have rarity going for them, but styling still doesn't look that great and audience is thinning. 

1966 Lincoln Continental convertible $12,700/ $29,400 -14% +7.2% 
Rear-swinging "suicide doors," auto-dim headlights are cool. But these big four-doors' bodies can sag in the middle. Experts say prices shouldn't rise much more. 

1972 Maserati Ghibli SS convertible $88,950/ $105,450 +7.7% +9.5% 
Decade-old convertible craze inflated this long-nosed ragtop's prices--too much, some say. Coupe versions cost half as much and look cooler, say Italian-car fans. (Photo: www.heritageclassics.com) 

1971 Mercedes-Benz 280 SE 3.5 $49,500/ $76,700 +7.8% Flat 
Big-engined convertible was "the ultimate four-seat touring car" in its day, says restoration specialist Paul Russell & Co--but the price already reflects it. 

1949 Mercury coupe $16,300/ $24,300 Flat +20% 
James Dean drove one in "Rebel Without a Cause," and it's the sort of car boomers tinkered with as teens. Now they're more interested in '60s cars. 

1966 Mini Cooper S $18,400/ $26,300 +106% +159% 
Vintage Minis got buzz from movies ("The Italian Job," "Bourne Identity"), BMW's updated version. Tiny car's big moment may have passed, though. 

1954 MG TF $21,500/ $27,800 +14% +59% 
U.S. soldiers stationed in Europe discovered MGs, but newer MGAs and MGBs have a bigger following now than these tiny cars, with '20s throwback styling. (Photo: www.heritageclassics.com) 

1932 Packard Dietrich custom sport phaeton $212,200/ $297,100 flat flat 
The Dietrich was a huge, top-of-the line Packard in 1932, when rich buyers would have its chassis finished by a custom coach builder. But as with other pre-World War II models, it has fewer active collectors among its fans. (Photo: www.1motormart.com) 

1970 Plymouth Hemi 'Cuda $88,000/ $140,000 +200% +500% 
Outstanding specimens of this muscle car have hit $1 million--reminding some market watchers of the speculator-driven, European sports-car bubble of the '80s. 

1979 Porsche 930 Turbo $23,700/ $31,400 +7.2% +13% 
Early turbos accelerated to 60 mph in five seconds, beating most other cars of the day. But they're a bit of a chore to drive, and values have only crept up. (Photo: Bob Craig) 

1964 Volkswagen Transporter deluxe 21-window with sunroof $15,200/ $25,000 +185% +344% 
Sixties nostalgia has pushed prices through the roof. But don't be greedy: Drawbacks of so-called "Microbus"--weak engine, poor safety rating--worry car fans who say collectibles should be models that were outstanding whenthey hit the market. 


Car Name Typical Price/High Price Last Five Years Last 10 Years 

1967 Buick GS400 Convertible $16,700/$31,800 +48% +92% 
Buick's "Gran Sport" cars were as fast as Chevies or Pontiacs, and pricier when new. Not as well known, they could get a lift from the muscle-car movement. (Photo: www.buicks.net) 

1963 Chevrolet Impala SS 409 $24,700/$41,350 +57% +206% 
Wide, low, early-'60s Impalas are an acquired taste, for years associated with East L.A. lowriders. Optional 409-cubic-inch engine--subject of The Beach Boys' "409"--made the grocery-getter Impala into an early muscle car. 

1965 Chevrolet Corvette Mark IV $27,900/$43,675 +14% +42% 
It's hard to go wrong with '60s 'Vettes. Models from '66 and '67 have bigger engines than this and fetch higher prices, but this one has a unique engine--a 425-horsepower, 396-cubic-inch "Turbo Jet"--and was made in small quantities. (Photo: www.heritageclassics.com) 

1959 Chevrolet El Camino $12,900/ $20,500 +107% +108% 
Pickups have gained collector favor in the last decade, lifting prices of car-truck combos like this and the Ford Ranchero. Experts are divided now. Some say they're "junky"; others think early "crossover" design will ride muscle cars' coattails. 

1967 Citroen DS 21 Chapron convertible $23,325/$29,375 +9.5% Flat 
Arbitrage alert: These teardrop-shaped cars fetch nearly $80,000--in Europe. "The French Connection" featured a sedan version, but car didn't really catch on in U.S. (Photo: www.citroen.mb.ca) 

1934 Chrysler Airflow sedan $38,500/$53,800 +17% +25% 
Mid-1930s Airflow sedans led Chrysler's bid for a modern, wind-cheating look. Turns out they weren't so aerodynamic--but now, the Art Deco look is a keeper. 

1950 Chrysler Town & Country station wagon $32,150/$53,600 +53% +103% 
With wood-paneled doors and stout bodies, Town & Countries also came as convertibles (which now fetch six figures) and sedans (one sold for $90,200 last month). This incarnation may catch a lift from the rising vintage-wagon market. 

1981 DeLorean $17,400/$27,500 +22% +23% 
Long derided, Mr. DeLorean's stainless-steel cars with pokey Renault engines ("Back to the Future") are on an '80-inspired upswing. But don't hold for long: When Duran Duran and The Fixx start playing stadiums again, it's time to sell. (Photo: www.motorcities.com) 

1985 Ferrari 308 GTS Quattrovalvole $29,000/$38,000 Flat -10% 
As seen on "Magnum P.I." Purists mock eight-cylinder engine ("real" Ferraris have twelves). But Andrew Lindh, a Hartford, Conn., computer network company president who paid $35,000 for one five years ago, says offers are creeping upward. (Photo: www.motorcities.com) 

1966 Ford Mustang convertible $19,300/$31,100 +48% +74% 
In spite of big supply--Ford made tens of thousands of these convertibles in '65 and '66--prices keep climbing. Credit iconic good looks, cheap maintenance. 

1967 Jaguar E-Type coupe "Series I" $27,300/$52,450 +39% +60% 
The first E-Type, in 1961, was as a performance breakthrough. The '67 was the last, best year for so-called "Series I" Jags--faster and shapelier than later models. 

1967 Lamborghini 400GT 2+2 $41,100/$60,400 +14% +8.4% 
Prices for these low, sleek "grand touring" cars were anemic for years. Price guides don't reflect recent spike; now, show-quality versions can go for up to $170,000. (Photo: www.lamborghiniregistry.com) 

1959 Lotus Elite $25,600/$35,000 +24% +15% 
Tiny and fast Elite's fiberglass body also served as a rigid frame--a big advance. Cars are fragile, but interest should grow now as Lotus re-enters the U.S. market. 

1955 Mercedes 300SL 'Gullwing' coupe $218,825/$356,225 +36% +19% 
A "blue chip" collectible car, this has LeMans racing pedigree and cool doors that open upward. One sold recently for $418,000, suggesting more momentum. (Racy versions with lightweight alloy bodies--Mercedes made 29--fetch twice the price.) 

1956 Packard Caribbean convertible $48,300/$64,700 +56% +76% 
Many consider this Packard's last hurrah, with understated tail fins, aggressive grille, three-tone paint jobs. A late bloomer among '50s cars, it still has upside. (Photo: www.1motormart.com) 

1964 Porsche 356 C Cabriolet $37,700/ $50,925 +39% +39% 
Porsche built many variations of its 356 series from 1950 through 1965, with different engine, hardtop and ragtop configurations. Bare-bones "speedster" convertibles cost more now, but fancier, more common cabriolets could catch up. 

1960 Rolls-Royce Silver Cloud II sedan $29,600/$45,000 +19% -20% 
It's one of the last sweeping-fendered Rolls--pass the Grey Poupon--but beauty has its price: It's heavy and slow. Prices are rebounding after a late-'90s downturn. (Photo: www.heritageclassics.com) 

1966 Shelby Cobra 427 $220,550/$354,625 +11% +28% 
Texan Carroll Shelby kept putting bigger Ford V8s in small British A.C. roadsters; this one was freakishly fast. He made roughly 350, so demand should hold. (Photo: www.motorcities.com) 

1957 Volkswagen Beetle convertible $9,750/$16,200 +36% +36% 
VW'S 1998 Beetle relaunch rekindled interest in original "Bugs"; collectors may still see an uptick. A good coat of paint can be enough to double price, some say. (Photo: http://www.dyna.co.za/cars.htm)