Back in 1946, Ray Lambrecht of Pierce, Neb., opened a Chevrolet dealership. Fifty years later, in 1996, he closed the business, but he still had some inventory left over.
That inventory was actually about 500 new cars from 1958 through 1980 that Lambrecht refused to sell at reduced prices simply because the new model year vehicles came out. So, instead of selling, he housed them on his business property as well as other locations around town, believing someday they would be worth more than what they would get as one-year-old vehicles.
He’s about to find out just how correct he was in his assessment.
On Sept. 28-29, under the auspices of auctioneer Yvette VanDerBrink, the car collection will be auctioned off, and there are interested buyers heading to northeast Nebraska from at least a dozen foreign countries, including Brazil, Iceland and Singapore.
“To find this many new, old vehicles is unheard of,’’ VanDerBrink said.
Approximately 50 of the cars in the collection have less than 20 miles on the odometer. They are all low mileage and never been owned by anyone but Lambrecht.
While the auction will make Lambrecht a pretty penny, with at least one car estimated to be auctioned at six figures, serious car collectors will be put off by the condition of the vehicles. Lambrecht did not preserve them so much as hold on to them.
There are numerous car collector clubs in the United States, including the Classic Car Club of America and the Antique Automobile Club of America. In most cases, the cars that collectors own do go up in value over years.
But investing in automobiles as a way to make money is an uncertain path, according to David Schultz of Classic Car Club of America, whose club has 5,000 members.
“It’s only a great investment if cars are something you really enjoy,’’ Schultz said. “Cars have to be insured, have to be maintained, have to be garaged. It’s almost like owning a horse. It’s not like a painting you can hang on the wall.
“The value of cars seems to run parallel to what goes on in the art world,’’ he said. “The stuff that is special takes off, the unique one-of-a-kind automobile. And you do have guys who study the market and know what is hot this month or this year.”
Robin Berson, owner of the Classic Car Data Base, said classic card ownership as an investment strategy requires patience.
“It kind of comes and goes as valuation of cars come and go,’’ Berson said. “For a while the valuations were very low. It is also a generational thing. My generation was into muscle cars, and muscle cars are coming back.”
But there are people who make money from investing in classic cars.
“Classic cars have outperformed stocks in the past four years,’’ said Sports Car Market magazine publisher Keith Martin. “Baby boomers have all the money, and half of them are saying ‘I always wanted a Ferrari.”
Investing in automobiles is part of a market called “passion investing’’, in which high net worth people invest in ownership of things about which they care. With the arrival of the Internet, buying and selling automobiles is an easier and perhaps more lucrative field, because it is easy to find a buyer interested in a specific vehicle.
There are three factors in automobile collecting as an investment possibility:
Original Value: Cars that were outrageously expensive when they are new become even more valuable over time, if properly maintained.
Peer Value: This goes to the special interest. A well-maintained old Mustang will appeal to a Mustang fan.
Scarcity: In dealing with vintage or classic cars, sometimes a particular model doesn’t have a lot of inventory because time has taken its toll.
Cars are like stocks and bonds in that there is an ever-changing market for collectible vehicles. Staying on top of the market, and networking at the hundreds of classic car shows that take place annually in America, will provide greater investment options and performance.
According to the Historic Automobile Group International, an independent investment research house in Europe, the value of classic Mercedes-Benz vehicles rose 12 percent in the last 12 months.
“We’ve discovered that classic cars move independently to any other investment area,’’ said Dietrich Hatlapa, a former banker who started the HAGI Index. “That's an attractive attribute for collectors and investors alike."
In a 2012 interview with the New York Daily News, Hatlapa said the most valuable cars, in general, are Alfa Romeo, Bentley, Bugatti, Ferrari, Jaguar, Mercedes and Porsche, although all vary based on year of manufacture. Hatlapa also said anyone interested in car collecting as an investment should specialize in a car he or she likes personally.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.