At The Money: Building A Car Collection

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1:03Are you passionate about cars? Are you interested in collecting, rebuilding, racing, or showing them? Have you ever considered having more cars than you could reasonably drive in a given week or month? Classic cars have been appreciating rapidly. And if my emails are anything to go by, quite a few of you have caught the fever. If you've ever wondered what it's like to build and own a car collection, well, then I have the perfect guest for you. Hannah Elliott is the supercar reviewer for Bloomberg. She's been covering cars, the auto industry, and exploring car culture for over 15 years. She also drives a 1975 Rolls-Royce Silver Shadow.

1:50So, Hannah, let's start broadly. How does a person who's passionate about cars find themselves with a collection? Is this an ill-advised idea? That's a great question. I think the quick answer is no, it's not an ill-advised idea. If you like cars and you want to have joy in your life, buy an old car. Buy a vintage car. It's fun. Now, if you are hoping that this is going to bring you a lot of money a long time down the road, probably not the best investment class, but there are a lot of other values that you get from owning old cars that aren't just about the money. So since you brought up the money, what separates a passion project from an asset class?

2:40For the average car guy or car gal, is this a hobby or is this an investment? For the average person, this is a hobby, for sure. There are a lot of expenses associated with owning old cars on top of the initial purchase price that you know. Of course, you've got to think about storage. You've got to think about insurance. You've got to think about maintenance, repairs, gas, obviously. There are lots of things that are going to come up. I think it's important to think of it as a relationship. This is a give and take thing. There may be a little bit of dysfunction. It's not just going to be, you know, right off into the sunset and you pay up front and you never pay again.

3:17For most people, yes, it's a hobby. It costs money, but you have a lot of fun. So where does one begin? Do you go with the models that excite you or do you try and pick those cars that are and appreciate over time? For somebody just getting involved in owning old cars, I would really strongly recommend you buy things that you genuinely like. Buy things that genuinely excite you. Sometimes, if you're really lucky, maybe those things will retain their value. Maybe they will even gain value over years if you hold something for a long time. But here's the thing. If you buy something that you really like, even if it loses a bit of value over the years, you still get the value of owning something that you genuinely like.

4:02Whereas if you buy something simply because you think it might gain value, if it loses value, you're kind of out because you didn't necessarily like it and you didn't make a lot of money on it. So it's kind of a lose-lose. At least if you buy something you like, you know you will enjoy it. And if you make a little money on top too, even better. Let's talk budgets. What do you need to become a hobbyist? and what are some of the costs that you should budget going forward? Okay. I would like to say there is a vintage car for every price point. You can buy an old Porsche. Now, I'm not going to say an air-cooled 911, but you can buy an old Porsche from a swap meet in Pomona, California for$8 ,000,$10 ,000.

4:47It's going to need some work. But, you know, I buy old Rolls Royces. I have bought them for 10 grand. Now that maintenance costs a little bit more on that. And we can talk about that. But I just want to illustrate there is an entry price point for every budget, of course. And I would say I don't think there's necessarily a correlation between spending a lot of money and having a lot more fun on a car that's perfect and spending less money. And you're going to have less fun and the car is going to need a lot of work. There's not necessarily a correlation. You can spend a lot of money on something and it's not great to drive and it requires a lot more maintenance.

5:26Obviously, registering a car is a one time thing. Insuring a car. There are many vintage cars insurers like Hagerty, for instance, that have pretty great insurance policies. And you can even get less expensive insurance policies on classics if you don't because you don't drive them as much because they're not daily drivers. So it's worth going with an insurance provider that specializes in classic cars that will charge you less. When people used to ask me for suggestions for a fun car to start with, I used to say, hey, check out the Honda S2000. Convertible, stick shift, ton of fun. But those have been appreciating.

6:04So now the answer I give people is find a well-sorted out Mazda Miata, also with a convertible, a stick shift. so much fun for so little money. And you could go from there if you want. You know what? As you said, Mazda Miata, I was typing Mazda Miata. So we are completely tracking. You're so right. It's such a fun car. Parts are readily available. It's very predictable. You know, it's not going to need a lot of maintenance. You can get a manual. And I'm looking right now on Hagerty's price values. You can get one in driving condition for$8 ,100. That's amazing. You get a nice one for$10 ,000,$12 ,000.

6:47They're very reliable. They're very tossable. It's just a beautifully balanced car and they have some history. That's the car that sort of brought back the resurgence in convertibles. So the other question I wanted to ask is, how important is it to have a theme or a focus for your interest or collection? And I ask that knowing your husband specifically collects air-cooled 911s from the 60s and 70s. Some people have a broad assortment like Jay Leno. But for the average person thinking about adding a car or two, where do they go? You know, it's nice to have a theme or a focus because it creates efficiencies.

7:30For instance, if you have a great mechanic who works on your Mercedes, he'll be able to take on more Mercedes vehicles. Whereas if you bring him something else, a Miata, for instance, there may not be as much overlap. It's kind of nice to have a specialist. You know, I've also got a 77 C3 Corvette. You know, that car goes to one guy. The Rolls Royces go to another guy. The Porsches go to another guy. So when you do have a theme, it creates more efficiencies. You can send them all to the same person to work on them. You can swap parts. That's also a nice efficiency. Also, you can get involved more deeply in the local culture of whatever that make is, which is really fun because when you start talking to other people who own similar makes, or even if you're just going to say all British cars or all Alfa Romeos, for instance, It's fun to get involved in a culture that focuses on that thing.

8:30You talk to old timers who have a wealth of knowledge who can give you tips. You start to learn who the trusted mechanics are. It just makes it easier. So I do really like the idea of having a particular theme to it. So you mentioned earlier the local car community or the enthusiast community. How important is it to get involved with your local BMW or Miata or Porsche club in your neighborhood? It's important. I think it's a nice value added thing to get involved with other like minded enthusiasts in your area. I think area. I think, you know, that is some of those clubs can be really picky. Of course, I'm thinking of Rolls Royce people.

9:13You know, I sort of deliberately avoid some of the Rolls Royce clubs in Los Angeles because those guys are they know their stuff, which is great and not great. I don't drive mint condition cars. So, you know, they certainly are friendly, but they also can tell me everything that's wrong with the car. So, you know, I tread carefully. That could be useful, right? It's useful. It's useful. The broader answer is, yes, of course, get involved. The more people you have around you, hey, at some point you're going to break down. You need to phone a friend. And AAA is great, but you just want people around you who are a network, a support network.

9:50They'll lead you to, again, the right mechanic, the right place to find a part. Maybe you end up getting a second car and the same theme. They're going to know who wants to trade, who can lead you down a path deeper down the rabbit hole of whatever your drug of choice is. And you mentioned garages, but there are other options for storing a car. It's not just your own garage. What are some of the other storage options? Car clubs. Car clubs can be a little bit expensive, but again, it's an investment in the hobby. There are many car clubs. I just know Manhattan and L.A. because that's where I live, but there are some great car clubs, of course, across the South in Arizona.

10:32Car clubs are great because, again, you pay a price per month for them to store your car. Often, they will also maintain the car for you in-house, which is a great benefit. And again, you get exposed to similar people, like-minded enthusiasts who are keeping their cars there. It's all at the end of the day about building this community of people, friends, colleagues who enjoy what you enjoy. So you mentioned Hagerty and you mentioned Bring a Trailer. What other resources should potential car collectors know about? The third one that comes to mind is K500, which is an index that Simon Kidson runs out of england um very good on really high end now this is like an advanced move k500 you need a membership to subscribe but again they have amazing data on values trends um history they will have specific pedigrees and lineages of particular cars this is for the really high end stuff but i also look at k500 just as educational they've got um they cover all of the auctions They've got analysis.

11:37They've got experts. Steve Wakefield is Simon Kitson's sort of top analyst. Those guys are really great. They're out of England, so I recommend it. Ever play with AutoTempest as a website? No, no. So it's just a giant relational database that lets you search for any year or group of years for any marquee and specific car and specific variants. And then you can refine that search for, all right, show me just the convertibles. I want to see just the cars. with the sticks, just show me this color. I like that. And it really allows you to hone in and it pulls in stuff from tons and tons of other sites.

12:14Auto Tempest. Auto Tempest. So last question, let's talk about documentation. How important is it to make sure that you're not only getting clear title, but seeing the service history of any vehicle you're thinking about purchasing? I think it's important. Obviously you want to make sure you see the title with the seller's name on the title. for some older cars and race cars a bill of sale is also used some cars don't have titles if they're really old so a bill of sale is used if you're buying a car from europe that can be pretty complicated to confirm to transfer a bill of sale into like an american style title so you might want to consult a professional about that the more maintenance records the better obviously the The longer ownership span that a car has by a single owner, generally, the better.

13:02You don't want a car that's been flipped every two years because generally that car, there's a reason it's being flipped. And it may not have been maintained so lovingly as someone who owned their special baby for 20 years. So the more records you can have, the better. So to wrap up, there's a lot of common sense involved in this. You don't need a ton of money. You could start with just something very basic like a Miata or an old SL. But find the cars you really like. Do your homework. Get to know your local enthusiast club or that particular BMW or Porsche club. And learn from the experts how to make a good decision with a car that will bring you pleasure and maybe a little money for as long as you own it.

13:52I'm Barry Ritholtz. you're listening to Bloomberg's At The Money.

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