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Pricing classic cars goes beyond guides

A 1967 Corvette is seen at Pro-Team Classic

A 1967 Corvette is seen at Pro-Team Classic Corvette in Napoleon, Ohio. (Jan. 13 2005) Credit: AP

1967 Corvette Convertible. Nassau Blue with White interior. 327/300 4-Speed. Non-matching numbers. Fresh frame-off restoration including new paint, interior, re-built drive-train. Power steering, power brakes, reproduction bolt-on wheels and side-pipes. Excellent condition. No documents. Call 555-1212.

1967 Corvette Convertible. Nassau Blue with White interior. 327/300 4-Speed. Matching numbers. Older frame-on restoration that included new paint, interior, re-built drive-train. Power steering, power brakes, reproduction bolt-on wheels and side-pipes. Excellent condition. Tank sticker, window sticker, Protect-O-Plate. Call 555-1212.

Which one is worth more? According to most price guides, the first one would be worth more. That’s because every published price guide that I’m aware of bases their value on the cars condition, with some guides factoring in options and mileage.

This may work well for modern cars. After all, every 2010 Jeep Grand Cherokee is virtually identical with the exception of very minor details. The only variables that significantly affect the value are options and mileage. Nobody really cares if you have the original Window Sticker, or Bill of Sale. And who would even think to ask if it has the original engine?

Classic cars on the other hand derive much of their intrinsic value from tangible and intangible attributes that have not found their way into the price guides. Perhaps that’s because it is very difficult to quantify the value of these attributes. But they have a tremendous effect not only on value, but desirability as well. These attributes include
originality, type of restoration, documentation, owner history, rarity of options, color combinations, verifiable mileage, judging history, and even what part of the country the car is from. Further complicating matters is that some of these attributes are very important on some cars, and less important on others. How can a price guide possibly be expected to factor in all of the possible combinations of attributes that determine a cars value?

Looking at our two Corvettes, we can see that they are virtually identical, differing only in that one is a fresh frame-off restoration with no documentation, and the other is an older frame-on restoration with good documentation. Based strictly on the criteria used by published price guides, the first Corvette would be worth more than the second. But I would argue that the second Corvette is worth at least as much as the first and possibly more. That’s because when it comes to vintage Corvettes, the value of good documentation on one car can easily offset the slightly better condition of another car.

Mercedes Benz 280SL’s are very collectible and priced roughly the same as our sample Corvettes. But with these cars, mileage and condition is everything. That’s not to say that documentation isn’t an added bonus, but lack of it will have little negative effect on the value of the car. Neither will a change in color from original, or even a non-original engine. The value in these cars is in the beauty of the car, the quality of the restoration, including the inevitable rust issues, and how well the car runs.

This past winter one of my customers was selling a concours quality 1968 Volkwagen Karmann Ghia convertible. Most price guides showed the value to be in the range of $20,000 - $25,000. He repeatedly listed the car in the newspapers, lowering the price each time until he was down to $15,000. He is somewhat of a computer-phobe, but at my insistence he had someone put the car on the Internet, and within one week it was on its way to California, having been sold for $25,000. Karmann Ghia convertibles, which are very popular on the West coast, are marginally popular on the East coast. And they are virtually sale-proof during a Northeast winter. The price guides take neither geographic nor seasonal adjustments into account.

The moral of the story is that price guides are just that…guides. They do not represent absolute values. They represent relative values. For example, most price guides show a value of about $100,000 for a 1968 Shelby GT500 Fastback and $140,000 for a GT500 Convertible. One can argue whether these values are absolutely accurate or not, but relatively speaking, they are. In today’s market the convertible is worth about 40% more than the fastback. What ultimately determines the value of any car is how much the buyer wants the car, and how motivated the seller is.

I recently had a conversation with a colleague who sells high end collectible cars. We were discussing how frustrating it can be when potential buyers use price guides as negotiating tools. In one of those moments that simply can’t be scripted, in walked a customer who had several times inspected an extraordinary Porsche 356 that my colleague was offering for the very fair price of $150,000. The buyer countered with an offer of $130,000 based on a figure in a price guide that he placed face-up on the desk between them. Having encountered this situation many times before, my colleague looked the buyer straight in the eyes and said “Yes, but the price guide’s not writing the check.” The customer bought the car.

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