Why would anyone want to buy a classic car? The world is moving to electric cars and touch interfaces are taking over yet there’s a reason why classic car values either climb or in the very least retain their value. Much like vintage or collector watches are sought after and auctioned at crazy prices, classic cars also provide an experience that can’t easily be replicated despite their younger counterparts engineered as a far superior product.
There are quite a few reasons why you might be interested in owning a creaky old car. Then there’s choosing the right car for yourself, understanding market values, understanding insurance, getting a Pre-Purchase Inspection (PPI), all before buying and enjoying.
So, what’s your intent? What do you want a classic car for? Each of these different intentions will dictate what the best car is for you.
Reasons for purchasing a classic car
You can now purchase the car you’ve always wanted growing up
For some, that may be a Ferrari Enzo or Lamborghini Murcielago but for most of us it’s something a little more attainable like a BMW M3, Nissan GT-R, or Porsche 911. Seeing the cars in print, on screens, and on Youtube only fuels desires but it doesn’t really give you a good indication as to what the car is really like to ride in let alone drive. Remember the old adage “never meet your heroes”? That applies here in spades. What we build up in our heads doesn’t always translate in reality so make sure you spend some time with owners and try to at least get a ride in one.
You think older cars are cooler than new cars
They can be. They can also be cantankerous old farts, not wanting to start, dropping oil, with things that will stop working every now and then. But really, they can also be wonderful, mechanical, involving, and emotive works of art that you can actually use to go on adventures, meet new people, and see new places.
You want to be part of a community
The classic car community is very tight knit and supportive whether that’s for a particular model, brand, or category. There are plenty of meet ups, cruises, special events, as well as club level tours and trips, sprint races, rallies, time trials, concours events, you name it.
You want a project
This almost comes with the territory. If you’re buying a classic car it’s best to get some mechanical training under your belt, even the basics, so that you what to look for, how to fix minor issues, and keep the car in top condition. Then there are those who buy cheap with the aim of restoring it. For this, I’d say you’d better have the space, time, and budget even if you plan on doing most of it yourself.
Your friend has one and you want one too
Not really a great reason to buy a classic car. If you aren’t into it yourself, by yourself, chances are you won’t bother to look after it and that’s when things go wrong very quickly, and become expensive very quickly. Even if you’re serious, you’ll still need to go through a lot to ensure you get the right car as every buyer’s journey will be different.
You want to use it as an investment
Ah. This is a whole other article. But there are a few criteria you’ll need to meet but like any investment, values go up and down depending on a few factors outside of your control. Make, model, spec, variant, competition pedigree, condition, previous owners, service history, total mileage, colour, provenance, repair history, originality, and more are factors you’ll need to consider. Not every old car will increase in value and sometimes a car will be worth a lot one year, then come down in value the next.
You want to compete in rallies
Now we’re getting really specific. Oftentimes rallies for classic cars are exclusive to particular makes, models, and years. Take the Mille Miglia for example, entrants need to possess a vehicle which competed in the original between 1927 and 1957. Because of this, these cars are usually highly sought after with high prices.
Choosing the car you want
How do you search for the right classic car for you? You need to drive one or at least be driven in one.
Based on why you want a classic car, your research should factor in most or all of these criteria, some more important than others depending on your reason for purchasing a classic car. For example, if it’s for investment, then the options specced from the factory is going to be important, but perhaps not for someone who wants a project.
If you love Hyundais, that’s great. Just know that a 1985 Hyundai Excel isn’t going to provide as many of the benefits of owning a classic car as say, a Peugeot 205 GTi or Ford Mustang. And the likelihood of these mass produced runabouts increasing in value is slim, however if that doesn’t matter to you then buy and enjoy! Classic cars are highly personal. Maybe to you, a classic car is an old Toyota Corolla that brings back memories of family trips.
Nobody is going to pretend a Porsche 924 is more desirable than a Porsche 911 Carrera. However it doesn’t diminish the joy of owning a classic car that isn’t a halo car or a low numbers special. Preserving a car’s history, and enjoying the drive, the mechanical feel and involvement, and community aspect are a large part of what makes classic car ownership enjoyable.
And nobody is going to pretend that a Porsche 911 Carrera is more desirable than the limited run Porsche 911R. If you’re after an investment this part is crucial. Low numbers from the factory (not necessarily because nobody bought them although over time that can also work to your favour) is usually the first guide. Japanese maker’s are notorious for releasing special variants but that hasn’t stopped them from commanding high values, such as the Nissan GT-R R34 M-Spec Nür with only 285 examples built and now realising $430,000 AUD.
Sometimes certain models will have improvements in model years manufacturers barely mention but they are worth noting.
Options from the factory
Porsche, again, are renown for their options list but for collectors and the value of the vehicle, this matters greatly. Had the right boxes been ticked from new, values can be impacted today. For example, selecting a more powerful engine, sunroof delete, and especially today, a manual transmission.
I love yellow. Most car enthusiasts don’t which impacts the pool of potential buyers and demand. However, if you have the only factory delivered yellow BMW E30 M3 in the world, all of a sudden it becomes highly desirable.
An obvious one and this will depend on your ability to make repairs on your own. A fully restored car will always be worth more than the same car with rust throughout and a seized engine, but if you’re after a project then this isn’t so much of a concern. Just know what could fail and when it’s likely to fail or needing to be replaced.
Again, another obvious one but evidence the car has been serviced regularly is all important. Look for recalls carried out and other important improvements like strengthening the BMW E46’s rear subframe, or replacing the IMS bearing in a Porsche 911 (996).
In other words, the entire documented history of the car including any notable previous owners. Recently, Iain Tyrrell of Tyrrell’s Classic Workshop was entrusted with bringing a very special Lamborghini Countach back to its absolute best. That particular Countach was owned by Ferruccio Lamborghini himself and subsequently changed hands for many times the amount a similar Lamborghini Countach might have. Cars owned by rock stars and movie stars always seem to command more, particularly the legends of the silver screen such as Steve McQueen, Elvis Presley, and Paul Newman.
Understanding values and where to buy
Next you need to get a good understanding of the market, so watching classifieds is probably a good indication as to what people are asking. The key point here is what people are asking, not getting when it comes to sales, but it does act as a rough indicator as to where the market is at. And it does come down to a couple of factors such as cultural popularity and simple supply and demand. A few YouTube videos, film recognition, or articles in popular media telling stories of a particular car can raise the desire levels and interest, and driving demand. Witness the rise in popularity of classic 911s after Magnus Walker’s Urban Outlaw video, or Chris Harris’s BMW 1M vs M2 video.
Right now demand is outstripping supply so prices have jumped considerably across the board. Whether or not this continues remains to be seen.
Once you get an idea of the price you’re willing to pay you need to decide which source you’re willing to purchase the car from:
Most feel comfortable buying privately because you don’t have a salesperson pushing you into a car. You may be able to haggle more on a private sale but generally those selling classic cars have formed some sort of bond during ownership and are less likely to let the car go for less than they feel it’s worth.
You’ll also need to inspect the car through an independent mechanic (see PPI below) for any kind of trouble be it mechanical, bodywork, electrics, or other hidden concerns.
Not all dealers are out to shaft you, really! But it’s important to find a reputable one. If you’re in Australia and searching at the top end of the market for the cream of the crop the two biggest dealers are Classic Throttle Shop and Dutton Garage. The amount of classic dealers in the UK and US dwarf that of the Southern Hemisphere simply due to available stock and willing buyers. Take the car for a drive and ask as many questions as you can.
Here’s where it gets interesting, and tricky. Auctions can enable you to purchase a classic car for much less than a private sale or dealer can however there are a couple of key things to note. Auctions won’t do a thorough pre-purchase inspection for you, not to the degree that you’d want. You’re going to have to be mechanically minded and know the make and model inside out to catch any big concerns. The second point is to consider the buyer’s premium when bidding which can be anywhere from 5% to over 12% depending on the auction house.
One of the biggest hurdles of buying a classic car in Australia is convincing insurers of the value. As they take guides from industry data sources such as Red Book in Australia, that can greatly inhibit your ability to get the vehicle insured for what you or the enthusiast community values the car. Red Book don’t factor in cultural shifts or swinging demands which can change dramatically within a year.
Take for instance a Porsche 911 (964) value on Red Book which states what the vehicle is worth privately:
Private price guide: $63,500 – $76,100
The cheapest price I can find a manual 964 Porsche Carrera 2 coupe on Carsales is $149,000 AUD. That’s an $85,500 difference at worst. But you just try and offer even the best value of $76,100 to the owner I can pretty much guarantee the follow conversation won’t be pretty.
Specialist insurers will be more understanding of vehicle value but usually have specific demands on where the car is kept and other factors. Independent valuations may also help validate a car’s value.
Pre-purchase inspection (PPI)
If you are buying privately you NEED to do a pre-purchase inspection with a specialist unless of course your mechanical aptitude is high and you can fix whatever comes your way. Specialists should know the make and model inside out and know what to look for. This will give you peace of mind moving forward and factor in any repair costs into the negotiation. A PPI, depending on the make and model, could cost anywhere from $250 to many times that for an exotic car, but it’s absolutely worth it.
Ask the owner if they are willing to allow you to do a pre-purchase inspection at your own cost. If they aren’t that might raise some alarm bells right there. The owner should then take the car to your nominated PPI specialist to carry out the inspection. The results are then handed over to you in confidence (you paid for it after all!) at which times you can then continue with the transaction, negotiate on repairs (at this point it would only be fair to share the findings of that particular concern as evidence is needed), or politely walk away.
Better to spend a few hundred dollars than end up with a bill for a few thousand or more down the road.
Buy and enjoy
Well, if you’ve bought a classic car, congratulations! It’s often said we are custodians of these cars, ensuring we keep them alive and in good condition for others to enjoy after us. The only way to do that is to make sure the car has regular maintenance, is driven, and you have a cash reserve should anything go wrong that needs fixing.
Document everything. This ensures the next owner has confidence in you and the car to make the purchase, and just as importantly you’ll want to look back on the adventures you have.