Antique Cuban Cars: Why Auto Collectors Are Holding Off
Experts who spoke to CNBC expressed deep admiration for the ingenuity that has kept the American cars on the road, but it’s that very same ingenuity that will likely cut into the value of the cars. The “intrinsic value in collector cars is in the originality of its parts,” said Steve Linden, an appraiser of collectible automobiles. Most important, he said, are “original body, panels, engines, transmissions.” To use an example of how that affects valuation, Linden said a quintessential American car like a 1957 Chevy Bel Air four-door sedan, in perfect condition with original parts, could sell for as much as $50,000. The same model in Cuba, with a large dollop of Bondo body filler and substitute parts, would probably sell for only $5,000.
Classic Car Market Goes Into Overdrive
According to the Historic Automobile Group’s HAGI “Top Index,” the value of rare classic cars has risen nearly 500 percent over the past 10 years. Demand is mushrooming. “Over the past five years, investors have gotten into the market,” said Steve Linden, vintage car appraiser, consultant and author. “Their only goal is to make money. Often they don’t even see the cars.” In addition, demand has grown from baby boomers, as well as international buyers across the globe, he said.
‘Passion Investing’ In Classic Cars Is Gaining Speed
So-called passion investing – allocating wealth toward high-value collectibles – has been around for about 10 years and is now expanding into the classic car arena. A private placement fund now in fundraising is Chrome Strategies Investments. Co-founder and fund manager Steve Linden is a well-known vintage auto appraiser, and author who has specialized in the classic car market for 30 years. His fund’s strategy is to look at specific auto nuances and attributes that other collectors and investors are overlooking. In the last three to five years, the volume of global purchases and shipments has exploded, he said, driven by new investors, as opposed to casual collectors. “I’m getting a lot of inquiries from investors, and I saw a need to offer a diversified portfolio product,” Linden added.”
Classic Car Investing Not For The Faint Of Heart
The sales of certain cars are going through the roof, particularly European sports cars from the mid ’50s and ’60s, according to Steve Linden, a vintage vehicle appraiser, broker and author. He said he sees no indications that the market will soften in the next five years. “The vast majority of people buying classic cars over $100,000 now are investors, not collectors,” Mr. Linden said. “A growing number are from overseas and they’re looking for a place to park their money.”
There are ways to invest properly in this asset class, said Mr. Linden, who advises investors to take a two-pronged approach: Become an expert or hire one. “This is an exceptionally complex area to invest in, especially because certain attributes are important on certain cars,” Mr. Linden said. “And most collectors specialize in certain genres. They’re only experts in that area, so how can they diversify their collection? Think of it like a stock portfolio.”
At $55 million, a Ferrari Races Into the Stratosphere
“If the $50 million barrier is going to be broken by a GTO, it will be broken by this car,” said Steve Linden, a classic car adviser based on Long Island, N.Y. “The market has softened a bit, but when it comes to the most special cars, the sky is still the limit.”
Trial Pending, Suspect’s Cars Will Soon be Freed
The trial of Jeffrey L. Mowen, accused of defrauding investors in an $18 million Ponzi scheme and then trying to hire a hit man to kill four witnesses against him, is expected to be lurid at the least. Mowens classic car collection is one of the largest private vehicle fleets ever seized by the United States Marshals Service. “They’re mostly undesirable,” said Steve Linden, a New York based classic auto specialist who examined the collection. “The only conclusion I can draw by looking at this collection is that this is a guy who must have thought, ‘I’m smarter than anybody else, I’m getting a better deal than anybody else, and nobody else sees what I see.’
Selling the Romance of the Road
The 1956 24 Hours of Le Mans was won by a D-Type driven by Ron Flockhart and Ninian Sanderson of the privateer Ecurie Ecosse team of Edinburgh. That blue-liveried Jaguar is now the most expensive British car ever sold at auction, after a bid of $21.8 million with fees on Aug. 19, 2016 at RM Sotheby’s in Monterey, Calif. “It sold for what it should have sold for, but it was a strong result,” said Steve Linden, a classic car collector and consultant in New York. He added: “It put Jaguar firmly in Ferrari territory,” referring to the five 1950s and ’60s Ferrari sports cars that have sold for more than $20 million at auction. “The fact that it had won Le Mans was a huge factor.”
Inside The World Of Super-Rare Car Investing
According to the Historic Auto Group Index (HAGI), some of the most value classic automobiles have earned nearly 500% returns over the past decade.
According to the Knight Franklin Luxury Index, classic cars have outperformed the Dow, S & P 500, gold, wine, and other commodities over the past ten years.
As seen on BBC
Video: Fox Business News September 23, 2013
Video: Jay Leno’s Garage
Video: BBC May 12, 2016
Would You Spend $60,000 On A Car Sight Unseen?
Steve Linden, a highly rated auto appraiser, collector car guide author and inspector in Smithtown, N.Y., says it happens more frequently than you’d think. No matter where a classic car falls on the value spectrum, it’s generally a good idea to get a pre-purchase inspection (PPI), Linden says: “It’s like an insurance policy.”
Cuba’s Classic Cars May Be Available, But Are They Worth Anything?
“The problem is that, in general, collectors know that these cars have not really been maintained,” says Steve Linden, a vintage car appraiser. “They’ve been driven and used as daily cars.” “Their ability to keep these cars running with scant resources is what diminishes the value of the cars because they’re not original,” Linden explains. People might be more willing to import cars from nearby Cuba, admits Linden, but “My opinion is they probably won’t.”
How To Collect . . . Cars
“If it’s been your dream to accrue a stable of classic cars—but the closest you’ve ever come is a shelf of Hot Wheels — then Steve Linden’s your man. When the author of Car Collecting: Everything You Need to Know isn’t offering auto advice to pal Jay Leno, he’s doing appraisals and pre-purchase inspections for collectors across the country. Linden’s best tips make collecting cars as easy as, well, GMC.”
Feds Auction Ponzi Scheme Defendant’s Car
“Steve Linden, a New York-based classic car appraiser, said replicas have no value for serious collectors. Originality is everything,” said Linden, author of “Car Collecting: Everything You Need to Know.”
Classic Car Portfolios: Best Practices
Watch classic car experts Steve Linden and M. Peter Neumann as they discuss best practice planning and handling of collector car portfolios.