"I have a client who sold his company for a lot of money. He now has $800 million and wants to have fun with it. I told him to get a good in-house advisor-like me-and to buy the best. I spent half a day doing the criteria to determine the types of cars he wants. Then I sent him pictures [of some that are available].
"He is not in this purely to make money. He is buying cars he likes to drive, as well as collect. These collectors create their own private museums. It is no different than collecting paintings and putting them on exhibition. They loan them to public museums or put them on display to raise money for charity.
"Collectors have fun building their own museums. One collector I know built a diner and a drive-in theater inside his museum," Myers says.
That being said, collectors still look to the hobby as a way to increase their wealth. American muscle cars, with big horsepower engines, from the 1960s and 1970s are hot items right now. But the true American and foreign classics from the 1930s also are top sellers. Then there are the true antiques.
"There was a car show in Brighton, England, recently where all cars had to be 1905 or older," Myers relates. "There were 550 cars in the show and it drew 100,000 spectators. But there are good buys in every sector and there is always someone looking to sell."
New investors should be wary of the urge to restore old cars. Often, the unrestored vehicle is worth more than a restored version, or the restoration can cost so much it negates the investment. Older cars, even if the body is in poor condition, are highly valued if all the parts are original, note collectors.
"You have to determine if it is what we call a 'real car,'" says Tim Durham, a collector from Indianapolis who is a client of RM Auctions. "You should always look at collecting not as an investment but at the cars you like. Then, do your homework. Make sure the chassis matches the body and that both are original. If you stick to rare cars, where not a whole lot were made, it is not difficult to track them down and learn their history.
"I had a Mercedes 54v0K chassis with a body created in 1993 that sold for $1 million," he continues. "I sold it for what I put into it, but an original like it just sold for nearly $8 million. I have been seriously collecting for seven or eight years, and most of my collection has doubled or tripled in value."
Research into collecting in general and specific cars in particular is essential before making a purchase, notes Myers. Financial advisors should make sure their clients have the expertise to make a substantial investment or that the collector has a trusted expert on board to help make those decisions.
Although collectors usually have particular types of cars or production eras they like, Myers adds that they should also keep an eye on the market to know what are good investments and know what cars may have just gone through a cyclical rise in price that might reach a plateau for a few years.