Car Buffs Ride out the Recession in Style

Thursday, September 10, 2009
By SeattleTool

While the big three auto-makers are busy reinventing themselves, many of their early assembly line offspring are proving that true classics never lose their place in the hearts and garages of true collectors, no matter how bad the economy gets.

Experts are pointing to a ‘correction’ in the price of entry level muscle cars that were being bought up by nostalgia seeking middle class North Americans before the current recession. Those cars were largely being financed by home equity loans, which became extinct after the US credit crisis turned the real estate market upside down.

But take a look at cars a little higher on the scale and you’ll see a different story.

Last month, Pebble Beach’s Monterey Auctions gave every indication that the ultra high-end car market is hedged against any downturn in the economy. The LA times reported that “high rollers” in the collector car market were willing to pay top dollar -- collectively throwing down $166 million -- for rare automobiles at a time when economic restraint is the order of the day.

Evidently, the tangibility of rare, storied automobiles is an investment that stands up well against the shifting sands of stock markets and the drama of corporate bailouts and profit margins. To some, collector cars seem like a luxury that should logically lose their cache during tough times, but beyond the wax and shine, many buyers realize the benefit of having a chrome plated investment that they can still take out on weekends.

Vancouver area firefighter John Turner has a 1934 steel-bodied Ford sitting in the garage waiting to start the painstaking restoration process. His previous car was a ’46 Ford Sedan that had been sitting in a farm field. After the initial investment of $2500 he spent $13,000 and a significant amount of ‘free time’ each week for three years before selling it for $30,000.

“If you have a steel bodied, original car, the price is eventually always going to go back up,” he says. “And they’re a lot more fun than stocks.”

Turner recalls a family friend who spent two decades amassing a collection of stock model A’s. “He had the biggest collection around. About fifteen. He always referred to them as his retirement fund, and he wasn’t joking. When he retired from the phone company he would restore and sell one every year,” he laughs. “It was better than his pension.”

While prices for new parts necessary for restorations are currently going up, the initial investment for the car is much lower than it was a year or two ago, as many sellers are in a hurry to liquidate their unrestored diamonds in the rough at a time when cash is scarce.

But, if you ask any dyed in the wool classic car enthusiast, it’s not really about the money.

“People buy classic cars because they have some kind of connection -- they rode in one as a kid, their neighbor had one, some nostalgic reason. When I was five or six years old I went for a ride in a Chevy Suburban with my Dad,” says Paul MacLeod, general manager of the Big Rig Group and proud owner of a 52 Chev Suburban and a1965 Ford Falcon Convertible that is currently torn apart."

“I’ve been messing around with classic cars since I was 15 . . . and I’m older than most of the cars I work on,” he jokingly laments. “A true good, classic car is solid investment, it’s a little harder to sell it during tough times but it certainly doesn’t lose its value.”

As producers of high end tools that grace the garages of car buffs across the continent, we like to think we hold a small but vital spot in this unique investment portfolio. Like storied cars, our aviation grade products are an initial investment designed and produced to withstand the test of time . . . and to help you keep those treasures on the road.

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