Some cars really do cost more than $1 million, but you don't have to spend a million to look like a million.
One way to avoid the million-dollar price tag is to buy a new, entry-level car for a great brand, like the Porsche Boxster. That's not just for Porsche's (PSHG_P) legendary performance. Unlike other brands, which alter their styling every four years, Porsche changes its exterior styling about as often as the New York Yankees redesign their uniforms.
That means today's Porsches look a lot like yesterday's Porsches, which look a lot like Porsches from 1972, even if the interiors and the mechanical components have all changed. In contrast to other brands, you're less likely to buy a Porsche that's immediately dated.
Buy Within Your Budget
A second strategy is to buy a really good used car from a prestigious brand. "We call this 'look rich for cheap,'" jokes Keith Martin, publisher of Sports Car Market.
Based in Portland, Ore., Sports Car Market, publishes pricing guides and shopping advice for car collectors. One of its most widely used products is a database of auction results for collector cars, ranging from a 1962 Ferrari 330 that sold for $9.3 million in May to a 1972 Ford Mustang for $5,599. "We tell people to buy the best example you can, within your budget," Martin says.
"Buy the best Jaguar XJ6 you can for $30,000, and not a mediocre Rolls-Royce that's got a few dings and dents in it, and it's all chewed up. Because if you start out already having to explain to people what a good deal it was, then you already look like a loser, right?" he says.
Used Cars Can Actually Appreciate
Another reason to buy used is that few things depreciate as fast as a new car. The average new car depreciates 40% the instant you drive it off the lot, or 55% at the end of three years, according to Automotive Lease Guide in Santa Barbara, Calif. ALG publishes a widely used industry benchmark for how much a new car will be worth at the end of a lease, or its residual value.
Unlike a new car, the right used car can actually appreciate in value, and it doesn't have to be an unattainable, rolling work of art, like a multimillion-dollar Ferrari. "That's a pretty good motivation to look at collector cars," says Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book and kbb.com. Nerad's personal favorite is a 1962 Corvette he's had for many years. "I can be pretty sure that any money I put into it, I'll get it back when I sell it, and maybe more. There are people who have done a lot better [investing in] cars than they have in similar attempts in the stock market," he says.
The original Kelley Blue Book—literally, a book—is a benchmark for used car values, a longtime reference for car dealers since the 1920s, and in more recent years for consumers as well. In its online incarnation, kbb.com, Kelley Blue Book has teamed up with AutoTrader.com to provide online classified ads for thousands of used cars of just about every age, brand, mileage, condition, and price range.
Martin suggested that a newcomer to car collecting should look at more general sites like kbb.com to familiarize themselves with what's available, before diving straight into a more specialized site such as Sports Car Market. For instance, kbb.com recently listed 193 used Rolls-Royces, ranging in price from $4,900 to $659,950.
Consider a Kit Car's Reputation
Kit cars offer a third way to step up to supercar looks without breaking the bank. Kit cars have an unsavory reputation in the auto industry, thanks to companies like the one that grafted fake Rolls-Royce grilles onto old Volkswagen (VLKAY) Beetles, for the reverse snob appeal.
However, some kit cars have stood the test of time, such as the Intermeccanica Italia from the 1960s, which has a sexy Italian body around a Ford V-8. "It's a lot like real estate," says Jamie Kitman, a veteran auto writer, rock band manager, and car collector. "There are particular classes of cars, where if you catch it right, you get all your money back for fixing it up. There are other things you can buy that over time will make you look like even a bigger dunce than you were when you first bought it," Kitman says.
Martin says the best advice for the casual collector who does not intend to spend a lot of money on restoration is to buy the best car that you can afford and that you love, and then drive it, instead of merely hanging onto it: "At least that way, you've enjoyed it for a few years."
Check out the BusinessWeek.com slide show to see examples of affordable supercars currently on the market.