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At The Money: Building A Car Collection · Masters in Business

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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  Speaker 2: Are you passionate about cars? Are you interested in collecting, rebuilding, racing,
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  Speaker 2: or showing them? Have you ever considered having more cars
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  Speaker 2: than you could reasonably drive in a given week or month?
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  Speaker 2: Classic cars have been appreciating rapidly, and if my emails
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  Speaker 2: or anything to go by, quite a few of you
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  Speaker 2: have caught the fever. If you've ever wondered what it's
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  Speaker 2: like to build and own a car collection, well then
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  Speaker 2: I have the perfect guest for you. Hannah Elliott is
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  Speaker 2: the supercar reviewer for Bloomberg. She's been covering cars, the
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  Speaker 2: auto industry, and exploring car culture for over fifteen years.
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  Speaker 2: She also drives in nineteen seventy five Rolls Royce Silver Shadow.
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  Speaker 2: So Hannah, let's start broadly. How does a person who's
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  Speaker 2: passionate about cars find themselves with a collection. Is this
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  Speaker 2: an ill advised idea?
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  Speaker 3: That's a great question. I think the quick answer is no,
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  Speaker 3: it's not an ill advised idea. If you like cars
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  Speaker 3: and you want to have joy in your life, buy
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  Speaker 3: an old car, buy a vintage car. It's fun. Now.
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  Speaker 3: If you are hoping to that this is going to
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  Speaker 3: bring you a lot of money along time down the road.
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  Speaker 3: Probably not the best investment class, but there are a
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  Speaker 3: lot of other values that you get from owning old
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  Speaker 3: cars that aren't just about the money.
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  Speaker 2: So, since you brought up the money, what separates a
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  Speaker 2: passion project from an asset class for the average car
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  Speaker 2: guy or car gal? Is this a hobby or is
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  Speaker 2: this an investment?
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  Speaker 3: For the average person, this is a hobby for sure.
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  Speaker 3: There are a lot of expenses associated with owning old
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  Speaker 3: cars on top of the initial purchase price that you know.
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  Speaker 3: Of course, you've got to think about storage, You've got
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  Speaker 3: to think about insurance, you've got to think about maintenance, repairs, gas. Obviously,
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  Speaker 3: there are lots of things that are going to come up.
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  Speaker 3: I think it's important to think of it as a relationship.
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  Speaker 3: This is a give and take thing. There may be
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  Speaker 3: a little bit of dysfunction. It's not just going to
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  Speaker 3: be you know, right off into the sunset and you
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  Speaker 3: pay upfront and you never pay again. For most people, yes,
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  Speaker 3: it's a hobby. It costs money, but you have a
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  Speaker 3: lot of fun.
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  Speaker 2: So where does one begin. Do you go with the
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  Speaker 2: models that excite you, or do you try and pick
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  Speaker 2: those cars that are going to appreciate over time.
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  Speaker 3: For somebody just getting involved in owning old cars, I
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  Speaker 3: would really strongly recommend you buy things that you genuinely like.
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  Speaker 3: Buy things that genuinely excite you. Sometimes, if you're really lucky,
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  Speaker 3: maybe those things will retain their value. Maybe they will
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  Speaker 3: even gain value over years if you hold something for
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  Speaker 3: a long time. But here's the thing. If you buy
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  Speaker 3: something that you really like, even if it loses a
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  Speaker 3: bit of value over the years, you still get the
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  Speaker 3: value of owning something that you genuinely like. Whereas if
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  Speaker 3: you buy something simply because you think it might gain value,
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  Speaker 3: if it loses value, you're kind of out because you
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  Speaker 3: didn't necessarily like it and you didn't make a lot
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  Speaker 3: of money on it, So it's kind of a lose lose.
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  Speaker 3: At least, if you buy something you like, you know
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  Speaker 3: you will enjoy it, and if you make a little
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  Speaker 3: money on top to even better.
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  Speaker 2: Let's talk budgets. What do you need to become a
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  Speaker 2: hobbyist and what are some of the costs that you
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  Speaker 2: should budget going forward.
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  Speaker 3: Okay, I would like to say there is a vintage
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  Speaker 3: car for every price point. You can buy an old
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  Speaker 3: Porsche now I'm not going to say an air cooled
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  Speaker 3: nine to eleven. But you can buy an old Porsche
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  Speaker 3: from a swap meet in Pomona, California for eight grand
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  Speaker 3: ten grand. It's gonna need some work, but you know,
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  Speaker 3: I buy old rolls choices. I have bought them for
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  Speaker 3: ten grand. Now that maintenance costs a little bit more
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  Speaker 3: on that, and we can talk about that, but I
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  Speaker 3: just want to illustrate there is an entry price point
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  Speaker 3: for every budget, of course, and I would say I
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  Speaker 3: don't think there's necessarily a correlation between spending a lot
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  Speaker 3: of money and having a lot more fun on a
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  Speaker 3: car that's perfect, and spending less money and you're gonna
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  Speaker 3: have less fun and the car's gonna need a lot
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  Speaker 3: of work. There's not necessarily a correlation. You can spend
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  Speaker 3: a lot of money on something and it's not great
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  Speaker 3: to drive and it requires a lot more maintenance. Obviously,
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  Speaker 3: registering a car is a one time thing. Insuring a car,
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  Speaker 3: there are many vintage cars insurers like Haggerty for instance,
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  Speaker 3: that have pretty great insurance policies, and you can even
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  Speaker 3: get less expensive insurance policies on classics if you don't
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  Speaker 3: because you don't drive them as much because they're not
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  Speaker 3: daily drivers. So it's worth going with a insurance provider
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  Speaker 3: that specializes in classic cars that will charge you less.
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  Speaker 2: When people used to ask me for suggestions for a
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  Speaker 2: fun car to start with, I used to say, hey,
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  Speaker 2: check out the Honda S two thousand convertible stick shift,
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  Speaker 2: ton of fun. But those have been appreciating, So now
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  Speaker 2: the answer I give people is find a well sorted
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  Speaker 2: out Mazda Miyada, also with a convertible, a stick shift.
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  Speaker 2: So much fun for so little money, and you could
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  Speaker 2: go from there if you want.
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  Speaker 3: You know what, As you said, Mazda Miyada, I was
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  Speaker 3: typing Mazda Miata, so we are completely tracking. You're so right.
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  Speaker 3: It's it's such a fun car. Parts are readily available.
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  Speaker 3: It's very predictable. You know, it's not gonna need a
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  Speaker 3: lot of maintenance. You can get a manual and I'm
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  Speaker 3: looking right now on Haggardy's price values. You can get
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  Speaker 3: one and driving condition for eighty one hundred dollars.
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  Speaker 2: That's amazing. You get a nice one for ten twelve
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  Speaker 2: thousand dollars. They're very reliable, they're very tossible. It's just
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  Speaker 2: a beautifully balanced car. And they have some history. That's
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  Speaker 2: the car that sort of brought back the resurgence in convertibles.
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  Speaker 2: So the other question I wanted to ask is how
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  Speaker 2: important is it to have a theme or a focus
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  Speaker 2: for your interest or collection. And I ask that knowing
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  Speaker 2: your husband specifically collects air cooled nine to elevens from
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  Speaker 2: the sixties and seventies. Some people have a broad assortment,
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  Speaker 2: like Jay Leno, But for the average person thinking about
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  Speaker 2: adding a car or two, where.
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  Speaker 3: Do they go? You know, it's nice to have a
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  Speaker 3: theme or a focus because it creates efficiencies. For instance,
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  Speaker 3: if you have a great mechanic who works on your Mercedes,
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  Speaker 3: he'll be able to take on more Mercedes vehicles, Whereas
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  Speaker 3: if you bring him something else a Miata, for instance,
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  Speaker 3: there may not be as much of It's kind of
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  Speaker 3: nice to have a specialist. You know, I've also got
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  Speaker 3: a seventy seven C three Corvette. You know that car
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  Speaker 3: goes to one guy, The rolls Royces go to another guy,
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  Speaker 3: the Porsches go to another guy. So when you do
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  Speaker 3: have a theme, it creates more efficiencies. You can send
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  Speaker 3: them all to the same person to work on him.
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  Speaker 3: You can swap parts. That's also a nice efficiency. Also,
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  Speaker 3: you can get involved more deeply in the local culture
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  Speaker 3: of whatever that make is, which is really fun because
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  Speaker 3: when you start talking to other people who own similar makes,
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  Speaker 3: or even if you're just going to say all British
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  Speaker 3: cars or all you know Alfa Romeos for instance, you
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  Speaker 3: kind of it's fun to get involved in a culture
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  Speaker 3: that focuses on that thing. You talk to old timers
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  Speaker 3: who have a wealth of knowledge who can give you tips,
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  Speaker 3: You start to learn who the trusted mechanics are. It
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  Speaker 3: just makes it easier. So I do really like the
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  Speaker 3: idea of having a particular theme to it.
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  Speaker 2: So you men earlier the local car community or the
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  Speaker 2: enthusiast community. How important is it to get involved with
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  Speaker 2: your local bing MW or mead or Porsche club in
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  Speaker 2: your neighborhood.
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  Speaker 3: It's important. I think it's a nice value added thing
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  Speaker 3: to get involved with other like minded enthusiasts in your
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  Speaker 3: era I think area. I think you know that is
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  Speaker 3: some of those clubs can be really picky, of course,
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  Speaker 3: I'm thinking of Rolls Royce people.
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  Speaker 2: You know.
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  Speaker 3: I sort of deliberately avoid some of the Rolls Royce
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  Speaker 3: clubs in Los Angeles because those guys are They know
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  Speaker 3: their stuff, which is great and not great. They I
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  Speaker 3: don't drive mint conditioned cars, so you know, they certainly
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  Speaker 3: are friendly. But they also can tell me everything that's
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  Speaker 3: wrong with the car. So you know, I tried. It's useful,
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  Speaker 3: it's useful. The broader answer is yes, of course, get involved.
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  Speaker 3: The more people you have around you, Hey, at some
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  Speaker 3: point you're going to break down, you need to phone
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  Speaker 3: a friend, and triple A is great, but you know,
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  Speaker 3: you just want people around you who are a network,
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  Speaker 3: a support network. They'll lead you to again, the right mechanic,
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  Speaker 3: the right place to find a part. Maybe you end
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  Speaker 3: up getting a second car, and the same theme. They're
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  Speaker 3: gonna they're going to know who wants to trade, who
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  Speaker 3: wants who can you know, lead you down a path
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  Speaker 3: deeper down the rabbit hole of whatever your drug of
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  Speaker 3: choice is.
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  Speaker 2: And you mentioned garages, but there are other options for
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  Speaker 2: storing a car. It's not just your own garage. What
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  Speaker 2: are some of the other storage car clubs.
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  Speaker 3: Car clubs can be a little bit expensive, but again
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  Speaker 3: it's an investment in the hobby. There are many car clubs.
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  Speaker 3: I just know Manhattan and LA because that's where I live.
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  Speaker 3: But there are some great car clubs, of course, across
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  Speaker 3: the south. In Arizona. Car clubs are great because again
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  Speaker 3: you pay a price per month for them to store
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  Speaker 3: your car. Often they will also maintain the car for
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  Speaker 3: you in house, which is a great benefit. And again
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  Speaker 3: you get exposed to similar people, like minded enthusiasts who
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  Speaker 3: are keeping their cars there. It's all, at the end
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  Speaker 3: of the day, about building this community of people, friends,
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  Speaker 3: colleagues who enjoy what you enjoy.
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  Speaker 2: So you mentioned Haggarty and you mentioned bring a trailer.
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  Speaker 2: What other resources should potential car collectors know about.
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  Speaker 3: The third one that comes to mind is K five hundred,
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  Speaker 3: which is an index that Simon Kitson runs out of England.
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  Speaker 3: Very good on really high end. Now this is like
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  Speaker 3: an advanced move K five hundred. You need a membership
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  Speaker 3: to subscribe, but again they have amazing data on values, trends, history,
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  Speaker 3: They will have specific pedigrees and lineages of particular cars.
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  Speaker 3: This is for the really high end stuff. But I
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  Speaker 3: also look at K five hundred just as educational. They've
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  Speaker 3: got they cover all of the auctions, they've got analysis,
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  Speaker 3: they've got experts. Steve Wakefield is Simon Kitson's sort of
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  Speaker 3: top analyst. Those guys are really great. They're out of England.
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  Speaker 3: I recommend it ever.
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  Speaker 2: Play with auto Tempest as a web sole now. So
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  Speaker 2: it's just a giant relational database that lets you search
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  Speaker 2: for any year or group of years for any marquee
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  Speaker 2: and specific car and specific variants, and then you can
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  Speaker 2: refine that search for all. Right, show me just the convertibles.
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  Speaker 2: I want to see, just the cars with the sticks.
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  Speaker 2: Just show me this color and it really allows you
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  Speaker 2: to hone in and it pulls in stuff from tons
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  Speaker 2: and tons of other celles Auto Tempests auto Tempests. So
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  Speaker 2: last question, let's talk about documentation. How important is it
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  Speaker 2: to make sure that you're not only getting clear title,
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  Speaker 2: but seeing the service history of any vehicle you're thinking
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  Speaker 2: about purchasing.
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  Speaker 3: I think it's important. Obviously, you want to make sure
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  Speaker 3: you see the title with the seller's name on the title.
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  Speaker 3: For some older cars and race cars, a bill of
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  Speaker 3: sale is also used. Some cars don't have titles if
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  Speaker 3: they're really old, so a bill of sale is used.
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  Speaker 3: If you're buying a car from Europe, that can be
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  Speaker 3: pretty complex to confirm. To transfer a bill of sale
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  Speaker 3: into like an American style title, so you might want
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  Speaker 3: to consult a professional about that. The more maintenance records
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  Speaker 3: the better. Obviously, the longer ownership span that a car
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  Speaker 3: has by a single owner generally the better. You don't
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  Speaker 3: want a car that's been flipped, you know, every two years,
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  Speaker 3: because generally that car there's a reason it's being flipped
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  Speaker 3: and it may not have been maintained so lovingly as
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  Speaker 3: someone who owned their special baby for twenty years. So
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  Speaker 3: the more records you can have, the better.
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  Speaker 2: So to wrap up, there's a lot of common sense
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  Speaker 2: involved in this. You don't need a ton of money.
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  Speaker 2: You could start with just something very basic like a
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  Speaker 2: Miata or an old sl but find the cars you
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  Speaker 2: really like, do your homework, get to know your local
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  Speaker 2: enthusiast club or that particular BMW or Porsche club, and
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  Speaker 2: learn from the experts how to make a good decision
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  Speaker 2: with a car that will bring you pleasure and maybe
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  Speaker 2: a little money for as long as you own it.
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  Speaker 2: I'm Barry Ridolts. You're listening to Bloomberg's at the Money