Madoff Investors Should’ve Bought Corvettes: Jason H. Harper
We all wish we’d bought Microsoft Corp. (MSFT) stock in the 1980s. But what if you’d tucked away a 1965 Shelby roadster like the one that just sold at auction in Scottsdale, Arizona for more than $1 million? Or garaged a pristine 1971 Dodge Challenger, which went for $187,000, or that rare 1970 Ford Mustang for $275,000?
More to the point, what should you buy now that will turn out to be the collectible car of tomorrow?
The collectible-car market, while off the nosebleed highs of 2006-2007, is still robust. Some cars rolling off the line today are destined to be the auction surprises of the future. I asked collectors, classic-car experts and auto industry executives which new or recent car they would buy today to re-sell in the year 2030.
“I have a black Pontiac Solstice GXP coupe under a tarp right now,” said General Motors Vice Chairman Bob Lutz. “It’s destined to be a collector car in 20 years.”
The 2009 hardtop sold new for $31,000 and can be found from private owners for around $23,000, according to Edmunds.com. Lutz says he believes it will eventually be worth two or three times as much as when new, inflation adjusted.
“You can’t plan for a collectible,” said Lutz. “Part of it is happenstance. The Solstice coupe was extinguished after 1,000 units when we shut down Pontiac. It’s very fast and availability is extremely limited -- that’s the magic combination.”
He also names the future Camaro convertible, Corvette ZR1 and Pontiac G8. In typical Lutzian fashion, they’re all GM products.
Dave Kinney, an appraiser and publisher of “Hagerty’s Cars That Matter” price guides, agreed that the Solstice coupe is a good choice, but cautioned that scarcity is only one ingredient.
“Just because there are only a few doesn’t mean there will be a demand later on,” he said. “It depends on the kind of splash they made when they first came out.” If demand outstripped supply initially, chances are good it will be desirable in 20 years.
“You have to dispel the myth that rarity trumps everything. Otherwise I’d build a one-off car, slap my name on it and retire,” he said. “And nobody wants to buy a Dave Kinney, including Dave Kinney.”
His best guesses for future contenders at Barrett-Jackson Auction Co. are the Ford (F) GT and BMW (BMW) Z8 roadster. The 2005 and 2006 Ford GT was based on the 1960s Le Mans-winning GT40. Some 4,000 were built for a price of around $150,000. “The plug was pulled before fulfilling ultimate demand,” said Kinney.
As for the BMW Z8, built between 2000 and 2003: “There’s an almost inexhaustible demand in Europe, who’ve been buying them back from Americans,” he said.
For lower-end cars, Kinney advised collectors to keep an eye on Japanese models such as older, pristine Mitsubishi Evolutions, Subaru STi’s, and even 1990s Mitsubishi 3000GTs and Honda CRXs. A current hot car, the Nissan GT-R, will depend upon how many are built, he said.
Corvettes are a perennial. “If you get a chunk of money, almost any Corvette is proven to give a good return to the original owner,” Kinney said.
Bill Warner, founder and co-chairman of the Amelia Island Concours d’Elegance, who has a rotating collection of his own, also picked the Ford GT and Corvette ZR1. He added that single race cars that won significant races such as Le Mans or the Rolex 24 Hours of Daytona are worth considering.
In the Bank
“Those cars are so well documented that they’re like money in the bank,” he said. He also cited new, low-production Porsches such as the 997 GT2 and GT3 as good picks.
“Every time I bought a car to make a buck, I didn’t,” he said. “But when I bought a car I was passionate about, I did really well when I sold it.”
Peter Kalikow, president of H. J. Kalikow & Co., has a passion for one marque: Ferraris. He owns and drives about 30.
“They don’t get good until you’ve put 6,000 miles on them,” he said. “Ferraris are the gold standard. I have a soft spot for front-engine V-12s,” which traditionally sell for top dollar. A prime example, a 1959 250 GT Series 1 Cabriolet, recently went for $2.1 million.
Kalikow said he thinks the market for the Prancing Horse is overheated. Limited-production mid-engine models like the 16M Scuderia Spider (only 499 units built) will hold their value, he said. Super-special variants will be the most sought after, such as the 60th Anniversary 612 Sessanta. Sixty were built and Kalikow owns one of them.
If I had the money and storage space, I’d opt for the brand-new Shelby GT350 -- legend Carroll Shelby is now 87 -- plus a Nissan GT-R and the Corvette ZR1. And I can’t forget the most beautiful modern car I’ve laid eyes and gas-foot upon, the Alfa Romeo 8C Competizione.
Like most collectibles, cars are a gamble.
“Factor in all the costs of keeping a car and it’s a lucky person who gets a good return,” said Kinney. “You’d be silly to do it with anything but play money.”
Still, there are worse places to put your money, Kinney said. “Madoff investors would have been better off investing in nothing but Corvettes.”
(Jason H. Harper writes about autos for Bloomberg News. The opinions expressed are his own.)
To contact the writer of this column: Jason H. Harper at Jason@JasonHharper.com.