Classic Cars Rev Up Return on Investments

The drive to own a classic car never seems to veer out of style. Like all things nostalgic, it transports you back to your youth.

Those who acquire and restore vintage cars know their assets can only appreciate. It’s an investment they can enjoy now and sell whenever they wish.

There are about 3 million collector cars in the United States. Ranging in value from $3,500 to $25 million (for a Ferrari 250 GTO or a Bugatti Royale), the average vehicle is worth about $30,000, according to Hagerty Insurance Agency in Traverse City, Mich., which covers collector cars and boats.

A good vintage car can appreciate by 5 to 10 percent per year, according to Hagerty, while annual inflation averages less than 3.5 percent.

Steve Moskowitz, executive director of the 60,000-member Antique Automobile Club of America in Hershey, Pa., agrees that the collectible car market is very strong. “If you know what you’re doing, there’s still an opportunity to make a good return on your dollars,” he says.

Moskowitz, 62, has been an antique car aficionado since his early 20s. When he sold his 1902 Curved Dash Oldsmobile in 2002, it had a $35,000 market value—more than 50 times the $650 price upon rolling off the assembly line a century earlier. In 2010, the car could fetch $45,000 or more.

“You don’t look back,” Moskowitz says, while keeping the selling price a secret. “It goes along with the territory of being in this hobby.” What’s important is that he made enough money to restore a 1903 Curved Dash Oldsmobile, which still fuels his passion. “I call it Murphy after Murphy’s law, because the car fought me every step of the way in getting restored.”

Parts broke. The engine blew up. “It’s an emotional experience,” he says, “so you’re naturally tied to the car.” A former Oldsmobile dealership owner in Merrillville, Ind., Moskowitz took a job with the antique auto club after General Motors ceased production with the 2004 models.

Solid return on investment

Oldsmobile, founded in 1897, isn’t the only brand to be phased out in automotive history. Profit dictates which lines live on. But decades later, bygone beauties become legends.

A well-planned portfolio of cars—with low production and survival rates—draws a discerning clientele and boosts a solid return on the original investment, according to high-end RM Auctions in Blenheim, Ontario.

“Your money tends to stay with you if you buy an antique car,” says Tom Cox, 47, a collector in Blue Ridge, Va., who directs a group of eye-care centers. He owns more than a dozen cars ranging from a 1920 Buick Model 6-45 to a 1981 Datsun 280ZX. “As long as you maintain them, they’ll hold their value."