Antique cars are more popular than ever in the United States, and while America's automakers have been struggling lately to sell new cars, the ones they built 30, 40 and even 50 years ago are selling like never before.
In the 1950's, 60's and early 70's, Detroit's Woodward Avenue was like a scene out of the movie, American Graffiti … with drive-in restaurants, and hot-rod cars cruising the strip all night long. Now the kids of that era are aging 'Baby Boomers' trying to recapture their youth… and -- like Sherry and William Billings, who own a 1967 Chevrolet Camaro -- they have the spare cash to do it.
"We were into cars years ago but then, you know, the kids came along, the college came along and now they're on their own, so we're living a little bit," says Willilam.
But it's not just nostalgia that's driving this trend. Chuck Herkowitz has a 1964 Ford Thunderbird convertible, and he's expects more than just a pleasant drive from his old car. "I have a 1958 Chevy Impala convertible also...the Impala, which is a very rare car, we got a very good buy on it, and it's doubled in value," he says. "So, I probably made more money on these 2 cars than I would if I were to invest in the market."
Dave Kinney, one of the top antique car appraisers in the United States, and an analyst for Sports Car Market magazine, says the ups and downs on Wall Street are fueling this automotive trend. "I think a lot of it is the frustration that's happened with people who were involved in the stock market run-up related to tech stocks," he says. "They saw their shares disappear overnight and what they had left was [nothing]."
He says wary investors are now looking for something less volatile than stocks… and a lot more fun. "They can't manipulate an Enron or a Tyco," he points out, "but they sure can have something that's substantial when they have a 1967 big block, 427 Corvette convertible."
According to the National Auto Dealers Association, the increase in demand for Corvettes, Mustangs, Thunderbirds and the like has pushed the average price for a classic car to around $50,000… that's up 40% since 2000… more than twice the price of many 2005 models. Some muscle cars of the 60s and 70s, like Plymouth Road-Runners and Barracudas, are even bringing record prices in the millions.
One thing that's helped turn car collecting from a niche hobby to a mainstream investment vehicle is the Internet. When Steve Haas started working at E-bay three years ago, the on-line auction site sold about $3 billion worth of antique cars a year. Now, he says, they're at $14.3 billion a year, selling a classic car every four seconds. "Not too many years ago if you wanted to find an old Spitfire… or an Alfa Romeo, " he explains, "you may [have looked] forever locally in the paper, or cars parked on the street with for sale signs, or car club events, and you may [have gone] months without finding what you want, today on E-bay there's so many vehicles listed, you're probably going to find what you want very quickly."
There have been collector car price bubbles before, but with millions more baby boomers still driving toward that age when they'll have the spare cash to try to recapture their youth, this boom isn't likely to run out of gas anytime soon.