Dan's Papers - April 24, 2009

Recently, it was Abraham Lincoln's 200th birthday and to mark the event the Treasury Department has minted newly designed pennies. I don't know what it's going to cost, but let's face it, it can't be that inexpensive. With the current state of the US economy, I felt that it was a stupid idea. It really is penny foolish for a country that certainly hasn't been pound wise for the last decade.

Many car collectors make financial errors when repairing, buying and collecting automobiles. In many, many ways people lusting after certain types of cars are penny wise and pound foolish. Just view some of the many vintage car auctions you see on television. I've been stunned over and over again by the huge sums buyers sometimes pay for automobiles. I'm not talking chump change here, but $50,000 to $150,000 bids on some cars that are just not that valuable. As time goes by, the cars may never live up to their auction prices. Be aware that these are also automobiles that the bidders have never driven nor have the cars been inspected by a bidder's mechanic. Pure madness. I call it a combination of auction fever and dumb money.

Then there's the guy who goes out and buys a bargain priced, unrestored collectable. As an example, let's say it's a 1967 Jaguar E-Type convertible. The car, a barn find, costs $30,000 and has a rusted out undercarriage and a frozen engine. Of course the interior is shot. A well-known Jaguar restorer gives him a quote of $50,000 for a full restoration. Everyone who has ever restored a car knows that both restorations and US military aircraft contracts always go over budget, so let's say that it actually costs $60,000. Oh, and the fellow has to wait a year and a half to have the Jag finished. For the same price, probably less, he could have purchased the same model E-Type already restored to a high standard. Plus, he could enjoy the car much sooner.

Unless a car is given to you by a rich uncle with good automotive taste, or you find the bargain of the century, with today's high cost of truly talented body shop labor, it simply doesn't pay to fully restore a car. Buy one already restored, especially in today's economy where prices for everything are down. I'm not saying don't go ahead and repaint a car or rebuild an engine. It's just those full-blown body off, chassis up full restorations that don't seem to make sense.

You know what's more valuable than a beautiful restored car? It's a low mileage original car. The benefit of an all original, unrestored car is that you know what's there. No rust was expertly patched. No panels were ever painted. It's the way it came out of the factory, with a satisfying patina. Around 1990, I bought a 1958 Ford Thunderbird. The truth is that I never really liked 1959 Thunderbirds, or "Squarebirds" as they are called. Compared to the earlier two-seat Birds, these '58 four-seaters were boxy looking. The reason I purchased the car was because it was a garage queen in Southampton and had only 24,000 miles on the odometer. It was one of the best original cars I'd ever seen. It was white with a perfect aqua leather interior. At the few car shows where it was shown it always received comments like "great restoration." People, stunned when told it was original, often did not believe me.

Speaking of originality, I personally wince when I see a car that has been hot-rodded or modified. Don't get me wrong. I know, originally, car guys did that, but in most cases it hurts the resale value of a collectable. I once had a MG-TD in which I installed a TR-4 engine and a Jaguar MK 5 drophead that I purchased with an Oldsmobile V-8. Several years ago I almost purchased an Aston Martin that had a Chrysler 440 Hemi for power. In all cases, except perhaps for the MG, all of these cars are worth much less than they would be if their original engines had been intact. The two most common engine changes that bother me the most are when owners put small block Chevrolet V-8s into early Fords and remove the beautifully smooth running iconic Ford flathead V-8. Also, removing that handsome twin cam six-engine from late model Jaguars and replacing it with a Chevrolet V-8 is a sin. Why? It kills the resale value of the car. Today, more than ever, it pays to make any purchase wisely. There are many bargains in collector automobiles currently in the marketplace. If you're in a position to have the discretionary income to buy a classic car at any price level, think before you leap.