Collectible Car Valuation

"Irlyluvwagons" (irlyluvwagons) 10/11/2015 at 12:59 • Filed to: None

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Hi Jalops - I’m writing a thesis for university on the viability of automotive investment as something you can actually make money on, and I need fairly academic sources regarding that topic. What I’m looking for is something like an article articulating that there are certain factors that make a car inherently likely to be valuable, i.e. last of it’s kind (997 GT3, Ferrari 458), first of it’s kind (GT350-R - carbon wheels, flat plane etc.) and others. If anyone knows of any such articles or videos or anything basically where people actually know what they’re talking about, and not just Forbes saying that because a car is old it’s worth more would be super helpful. Karmic gold to whoever helps, or even reads my plea.

Peace and Blessings

Wagonz

Nibby > Irlyluvwagons 10/11/2015 at 13:03

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Check if you get access to things like JStor

crowmolly > Irlyluvwagons 10/11/2015 at 13:07

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Check the Hagerty blue chip index and their valuation tools.

Cherry_man1 > Irlyluvwagons 10/11/2015 at 13:08

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Just look into Jalopniks future classics guide, maybe chris harris on cars, etc.

davedave1111 > Irlyluvwagons 10/11/2015 at 13:28

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“What I’m looking for is something like an article articulating that there are certain factors that make a car inherently likely to be valuable”

But there aren’t factors like that, so anyone saying so is a bullshitter. I mean, the Buckingham V12 is both the first and last of its kind, handbuilt to the highest standards, with a V12, gullwing doors and portholes, an illustrious team, and many other ‘assets’.

But, it’s a fucking hideous mess no-one wants, and so hasn’t held its value.

The thing is, buying cars is inherently speculation rather than investment, largely because it’s hard to put numbers on the risk:return ratio.

Irlyluvwagons > davedave1111 10/11/2015 at 13:33

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Ok fair point but I’m not saying these factors are guarantees. If you want to work in the spectrum of securities, you can’t say a company trading at attractive multiples in a growth space with strong management is guaranteed to go appreciate. Likely, yes and long term probably, but not guarantee. Along the same vein, if you were to tell me to buy a car from the modern era that I thought would appreciate, based off of, for example a last of its kind reasoning, and I bought a new Ford GT, I would be fairly confident in at the very least holding it’s number. Am I guaranteeing that, no, but I would be confident.

Irlyluvwagons > crowmolly 10/11/2015 at 13:33

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Will do thanks

Irlyluvwagons > Nibby 10/11/2015 at 13:33

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How would I utilize that?

Irlyluvwagons > Cherry_man1 10/11/2015 at 13:33

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Will do thank you, any specific articles you think I should search for?

Cherry_man1 > Irlyluvwagons 10/11/2015 at 13:53

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Not off hand.

davedave1111 > Irlyluvwagons 10/11/2015 at 14:01

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http://www.investopedia.com/ask/answers/09…

It’s about the degree of risk you’re taking on - and in the world of classic cars, particularly in the current bubble, you can’t really even estimate the risks and rewards.

You can look at cars and say that some are more likely than others to outperform the market, but we really can’t put a number on the chance that this is a bubble that’s going to pop.

Subjectively, I think it’s pretty obvious that there’s a bubble going on at the moment. The top end, blue chip cars, there’ll always be people paying big money for. Once you step down a level or two, though, prices are being inflated right now by speculators hoping to cash in on the rising market - and by people buying cars hoping for that, but mainly thinking that they won’t lose much money while the conventional investment returns have been low.

Objectively, though, well if there was objective evidence, that would pop the bubble.

Eric @ opposite-lock.com > Irlyluvwagons 10/11/2015 at 16:21

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The value of a car is very temporal. A 1960s-1970s muscle car is completely foreign to 99% of young enthusiasts, let alone the general population. Once these start showing up in estate sales, their values will drop to near-zero, just like the cars of decades before them.

On the other hand, extremely rare cars are a lot like extremely rare anything: If rich people want something, it will have outsized value. Most of your examples fit this pattern.

Nibby > Irlyluvwagons 10/11/2015 at 17:59

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They often have fantastic articles and journals... for a huge variety of things.

Irlyluvwagons > davedave1111 10/11/2015 at 18:58

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Ok man, I came on here asking for sources pertaining to reasoned discussion and case studies of automotive investment, and you’re over here trying to shoot the idea to shit by quoting things incorrectly with spotty deduction. Unless you believe that equity investing has no purpose as well and are all EMH (which is I guess possible and your prerogative, however wrong it is), then you’re calling the entire institution of equity investment wrong. There is no objective information regarding yes or no hard, firm, 100% reliable decisions.

And to address your concerns regarding a bubble, a common definition is rampant speculation with no caution or thoughts towards overvaluation - the very fact that you’re concerned is perhaps evidence to suggest the contrary.

Now, I never said you absolutely can generate consistent returns in automotive investment, I said that I’m doing a case study on it’s viability. So unless you can help me in some way, then kindly quit thread jacking and get the fuck out. K thanx bye

Irlyluvwagons > Nibby 10/11/2015 at 18:58

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awesome I’ll for sure check it out

Irlyluvwagons > Cherry_man1 10/11/2015 at 18:58

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no worries thanks

Irlyluvwagons > Eric @ opposite-lock.com 10/11/2015 at 19:02

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I appreciate that you’re not as militant in your contrarian thinking as the top commenter, but I disagree with your views regarding muscle cars. You can’t say that just because there are more people dying that there are guaranteed to be more mint barn find 69 z28’s springing forth from the barns of the rust belt. Also that’s one really specific example. The values will perhaps fall in the short term if indeed supply increases in any fashion, but that increase will be small relatively, and as with the general equity markets, prices adjust, and generally trend upwards.

Thanks for your thoughts though.

Eric @ opposite-lock.com > Irlyluvwagons 10/11/2015 at 21:06

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You missed the salient point: Availability is not the issue, demand is. A 1960s muscle car has no value to most people in my generation. They’re not a good investment, they are something with a very temporal demand curve that is peaking now. To understand this you would need to look at the values of much older cars at various points in history.

There are plenty of beautiful old cars out there waiting to be found. My aunt, for example, has some rare 1960s muscle car (can’t recall the year or exact model, just know it gets ~6-8mpg). She bought it new. It has been in her garage since then. Original paint. 30k miles or so. In excellent working condition because she has maintained it meticulously all these years. Is it a curious thing to me? Sure. Do I have sentimental feelings toward it? Absolutely. Would I want to own/drive it? Nope. Living with a car like that would be as foreign to me as living with a Model T would have been to her.

davedave1111 > Irlyluvwagons 10/12/2015 at 08:17

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“Unless you believe that equity investing has no purpose as well and are all EMH (which is I guess possible and your prerogative, however wrong it is), then you’re calling the entire institution of equity investment wrong”

I have no idea where you get that from. There’s a difference between risks you can quantify and risks you can’t. Anything from the latter category is unquestionably speculative in nature.

“ a common definition is rampant speculation with no caution or thoughts towards overvaluation - the very fact that you’re concerned is perhaps evidence to suggest the contrary.”

I think you’ve got things a bit confused there. Might want to ask your TA to help you out on that one.

“Now, I never said you absolutely can generate consistent returns in automotive investment, I said that I’m doing a case study on it’s viability.”

Quite. And I pointed out that your initial expectation is not accurate, and that it’s going to be a negative result, not a positive one - and that because of that you’re going to find it hard to find authoritative sources to say something that no-one authoritative would says.

“So unless you can help me in some way, then kindly quit thread jacking and get the fuck out.”

I was helping you, by answering the specific question you asked. But there’s no helping someone who won’t listen.