Fiscal Responsibility & Financial Planning – TTS Style!

Car Collection

Suppose for a minute that you have managed to finagle your personal finances through a series of questionable actions to the point that you have somewhere in the neighborhood of $20K available in liquid funds. Now suppose further that you are cunning enough to convince whomever else in your household that has a say in how your money gets spent that you are car savvy enough to take that $20K and turn it into at least 25% more over the next 1-3 years. We’re not talking penny stocks going up 100X in value, but is there not some appeal to our automotive selves in the ability to buy and enjoy a car that we find interesting and end-up selling it on at a net gain?

I’ll be honest: for the past 12 years or so I have dabbled in this type of activity to mixed results. As I look back at the countless spreadsheets I’ve kept on my “experiments” it looks that I am even in not just slightly ahead of the game, thanks in no small part to a handful of Mercedes 123 sedans whose owners should have looked at eBay before posting on CraigsList – but that’s an article for another day. There have also been some dogs: I lost my shirt – relatively speaking – on the 1978 Alfa Spider on which I pinned my hopes of reliving my youth thanks to its extremely low miles which translated to perished, well, everything that can perish on a 30-odd year old car. Then there was the Mercedes W140 S600 V12 – need I say any more about that?

With almost all of the “investment” cars I have played with for the last decade, however, I have looked for the absolute cheapest of the lot with the thought that I could just do a little “fix up” here and there and make them worth more. You would have thought that after the first car I had to paint from top to bottom I would have learned that I wouldn’t get my money back out, but I’ve fallen into that trap at least three times. Don’t get me wrong: there are countless bargains to be had out there in need of “just a little TLC” and a modest cash infusion Wheeler Dealers style, but it takes luck and a little bit of DIY ability. And Patience. I’ll admit to being a little short on that last one and, well, my DIY skills are hit or miss.

So here I’m talking about shifting strategies. Instead of falling into the TLC trap I am looking at what cars could be bought in “very nice driver” or better condition for up to $20K with the potential for that 25%+ uptick in value based on where they are in the market today instead of trying to build-in value through questionable attempts at restoration. And that’s where I am right now, and following are the cars on my short (?) list of candidates with potential. Remember – we’re not talking lifetime commitment here. These are cars that will be driven maybe 2,500 miles per year over the next few years, will live in a coveted place in the garage, and will be worth more when sold on than when bought. I welcome thoughts, comments, and suggestions in the comment section below.

    The Candidate List

Porsche 911
1980s Porsche 911
For fortysomethings like me, the second generation Porsche 911 is the car we lusted after as pimply teenagers with overactive hormones and Playboy magazines stuffed under our mattresses. I am partial to the Targa-bodied cars for reasons I can’t explain, and I prefer them without the whale-tail spoiler and in some period medium metallic color. I’m not hung-up on the 915 vs G50 transmission debate, having driven both without feeling strongly about either one way or the other. All of the “experts” say these cars are headed north, and if the earlier cars are any example they are probably right.

1989 560SL
Mercedes R107 560SL
In the mid-2000s my Dad and I bought a 1969 Mercedes 280SL roadster. It was a gorgeous car but was a seemingly neverending source of frustration due to cooling issues, a crapped-out transmission, hidden corrosion, and, well, you get the idea. At the end of the day after about $10K in repairs on top of a $23K purchase price we still made a couple of thousand dollars on it from a nice fellow in Spain. That same car would be about $45K today. Live and learn. The R107s are iconic for about three generations thanks to their nearly 20-year model run and are just starting to tick up ever so slightly in value. These days sub-100K mile cars can still be had for well under $20K but that may not be the case for much longer. I like the 560 for having the best performance of any of the official US models and being the last of the series, but I can see being very tempted to put proper European headlights and small bumpers on it to make it perfect..

Corvette ZR1
Corvette ZR1
I may be in an increasing minority, but I like the C4 Corvette. It’s probably because I can vividly remember getting my hands on the 1983 Car and Driver magazine that introduced the car to my world. I remember how cool the clamshell hood was, and the super-wide tires, and the funky 4+3 manual transmission. It was the best Corvette ever, they said, but sadly most of them have been ridden hard and put away wet, and these days they really don’t perform well at all in comparison with your average Corolla. Enter the ZR1. The ZR1 was the hopped-up powerful version, although from the outside the only real cues to it’s prowess over average ‘Vettes were the wheels and the front bumper. The motor was massaged by folks that knew how to make it breathe, and it was a world class sports car. And it still is. Add limited production numbers, and these will go up. Will they do it soon?

Jaguar XJS
Jaguar XJS Convertible
Other cars just don’t get “old world classy” at affordable prices like Jaguars do. The XJS got some bad press back in the day largely thanks to the fact that it wasn’t the E-type. It also wasn’t terribly reliable, but whatever. By the time the facelifted convertible XJSs came around, a lot of those bugs had been ironed out. They came as both I-6s and V12s, either being a viable option for appreciation potential. These cars are undervalued and underloved, and very nice ones can be had well within our budget. They’re decent cars that require regular attention as daily drivers. As weekend cruisers I’d wager you could call them reliable. These days that long, sleek shape appeals to my senses. Shame that we couldn’t have them in a stick – but again, we’re not talking forever cars, are we?

Jaguar XK8 Coupe
Jaguar XK8 Coupe
Speaking of Jaguars, the successor to the XJS – the XK8 – is at the absolute bottom price-wise these days. Available in both convertible and coupe form, I like the coupe as a collector car because they made fewer of them. And because they look like contemporary Aston Martins, which stands to reason since Ford owned both companies in those days. Also available only as automatics here, these cars are good handlers and drivers. They are powerful enough in regular V8 form and downright fast in supercharged V8 XKR form, and still have room for the kids in back. What’s more, they represented a modern return to some of the charm of form of the E-type. I can’t help thinking I’d get bored quickly with one of these as nice as it may be, but I could probably get my jollys out of it for a while.

1994 Alfa
S2 or S4 Alfa Romeo Spider
You would think I’d learn, right? And besides, haven’t we covered that whole “nostalgia is a funny thing” thing, especially as it relates to Alfa Spiders? Well, yes, but I still love them, and so does the sports car buying public, because prices are headed north (as they also are on Fiat 124s and Pininfarina Azzuras). The Italian sports cars of the 60s and 70s have a robustness that their British contemporaries could never quite match. They were marginally more reliable, but they also demanded to be driven – harder. The Series 2 Alfas are the last of the lot that you could have without all of the baubles and bolt-ons that Alfa added both in an attempt to modernize the car as well as to meet various Federal requirements, and later cars can be relatively easily retrofitted with earlier chrome bumpers. 1982 is the S2 pick for its Bosch injection. The Series 4 cars are the last of the lot altogether, and by then Alfa had figured out a much better way to integrate bumpers and air effects without it looking like a primped and prodded Floridian prostitute. They are fabulous drivers, not terribly fast, but sprightlier than their numbers would let on, and they really are the last of the affordable classic European sports cars – but becoming less affordable by the day.

Cutlass Convertible
GM A-Body Convertible
Muscle cars, and GM A-bodies in particular, are like the blue chips of American car collecting. The hottest performers like the RA IV GTOs and the 442s regularly deliver $100K prices at the big auctions, and yet people keep coming back. I like the A-cars, probably since my parents had a ’69 LeMans when I was a kid, but I also just like the lines. In truth, I don’t have a strong preference among the LeMans, Skylark, and Cutlass, but I’m less a fan of the Chevelle for some reason. Regardless, I would argue that prices on the more pedestrian versions of these cars would continue to creep slowly north as the high-end models derive ever higher prices. I’d have mine in a dark color – black or green, with black or tan interior, air conditioning, bucket seats and a console. And if anything breaks, you can get it NOS or reproduction from any number of parts vendors. And when I say anything…

1975 Jensen-Healey
Jensen-Healey Roadster
It’s a British sports car, they only made so many of them, it is powered by a Lotus engine, and it’s pretty attractive. How can this car not appreciate? I think a lot of owners have wondered that for a lot of years, but with the recent increase in cars like Fiats and Alfas, the Jensen-Healey seems well-poised for a value uptick. I don’t think they’ll ever break sales records, but I do think they will come into their own for what they are: practically handmade classic European sports cars with the sounds, smells, and power to make the experience memorable. Did you get that? L-O-T-U-S engine. The noise is sublime.

1992 500E
Mercedes 500E
Before Mercedes owned AMG, there was this: the 500E. It was a joint venture with Porsche – the only time Mercedes ever collaborated with their friends from across town – that resulted in a sleeper road rocket that looked to the untrained eye like every other taxicab on the streets of Stuttgart. Those in the know, however, will see flared fenders front and rear, special headlights, and four place seating. And those are just about the only clues that give away what lies under the hood. If subtlety is your bag, and speed, then the 500E is a no-brainer. I’ve had one, and I’d have another. For appreciation I would want one with less than about 125K on the clock. Transmissions and wiring harnesses can be trouble, but beyond that they are just Mercedes from when Mercedes really believed the corporate philosophy of “The Best or Nothing”. And they’re Porsches, too, and that’s what tells me they’re going to go up.

1988 M5
BMW E28 M5
The BMW E28 M5 may not have been the first production super sedan ever, but it was the first one that got it right. It came out in Europe a few years before it made it to the US, and we only ever officially got them in black, but they delivered what their blackness promised: staggering power, BMW handling, and four doors. They are an interesting contrast to the refinement of the Mercedes 500E: M5s were stick only, 500E was automatic. The M5, while well-executed, was rough on the road and really meant to be track cars while the 500E was meant to be the ultimate Autobahn weapon that could fit you and three of your closest thugs. One of the key selling points for me on the M%, however, is the 5-speed manual. The Getrag ‘box is a joy to shift, and there is currently no manual transmission in the fleet. I could take the whole family in one of these, go fast, AND shift my own gears. A suitable alternative would be the E24 M6 2-door, but to me the M5 is just cooler.

1985 300CD
Mercedes 300CD Turbodiesel
I love Mercedes W123s, and have probably at this point owned about 10 of them in varying states of repair. As mentioned at the front of this piece, two of my best ever transactions from a profitability standpoint were W123 sedans for which their owners really didn’t understand the market. But having done the sedan thing ad nauseum, I’m thinking that a coupe is the way to go. Besides, for whatever reason where there is a two-door option available the value will almost invariably be higher than for the equivalent sedan. These are known as million mile cars, indestructible, overengineered, and so on. And yes, they are amazingly engineered and built cars, but just like anything abuse will result in a terrible car and ultimately a terrible ownership experience. find a good one, however, and the experience can be everything it’s touted to be. You don’t buy one of these expecting it to be fast, or to take the corners like on rails. You buy it because you appreciate the technology of the turbocharged diesel motor, because you like the 5-cylinder clatter, and because you get why they have a cult-like following. The nicest coupes are in the $15K range right now, but like most 2-door Mercedes values only really have one way to go: up. The question mark is how long that will take….?

Miata BRG
Special Edition NA Miata
I know what you’re thinking. Another TTS article ending with the Miata as the logical choice. Well, not exactly. Any of the cars here, with the possible exception of the Jensen-Healey, to me represents investment potential. The Miata probably the least of the lot. What calls my attention toward these little modern-day Elans is the fact that good 1st generation cars are getting increasingly difficult to find. They got so cheap that kids and other vagrants got hold of them, stripped them out, bolted stuff onto them, and bit the ever-living bejeezus out of them. That’s what makes the good ones appeal to me. They are so well set-up out of the box, that the vast majority of the “enhancements” people add to them really take away from the cars. I like the British Racing Green cars best, and I have never understood why they didn’t make that a standard color. Likewise the Sunburst Yellow and 1993 Black and Red LE cars have some chance at appreciation, but understand that I am not suggesting Miatas will be the next 1962 GTO or 1955 Gullwing, I just think that the best of them will become increasingly valuable for what they represent in the history of sports motoring and because they’re just fun.

At the end of the day, so much of the ability to make a little profit while enjoying a car comes down to the condition of the car – cosmetic and mechanical – as well as the deal you’re able to make to procure it in the first place. Pay too much now, and chances are you’ll never get your money back. Work out a killer deal and you may make a little bit of money even if the cars stay dead flat value-wise. A combination of a good deal and an appreciating car is where you really want to be, and will hopefully be what turns a $20K car into a $25K car in a relatively short amount of time. Writing this has given me lots to think about, but I’d like to hear more. What cars am I completely ignoring? Remember: $20k or less and potential to increase in value. Thoughts?

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10 responses to “Fiscal Responsibility & Financial Planning – TTS Style!

  • Michael

    Thanks for a very informative article. How do you feel about the Mercedes Benz 1999 SL 500 with under 50K miles and in very good condition, meaning no apparent obvious mechanical issues and an almost flawless body in Mineral Green, Pano roof and SL2 option package. Since your previous article about the 500E, I have been looking and I always liked the 300D.

  • Brian

    Are you crazy? Two Jaguars? A Jensen-Healey? An 80’s Corvette? A And since when has any pedestrian Mercedes ever actually gone up in value?

    Look: Two months ago I bought a ’88 M5 with 100K miles for $8,000 – I could sell it tomorrow for $16K A couple of weeks ago I bought a ’74 BMW 3.0cs, 70,000 miles, Motronic 3.5, five speed, in pristine condition, for $13K – Lets just say it’s worth a whole lot more than that today…. On the same day I bought TWO non-running 911’s (a ’67 Targa and a ’77) for $20K total. I sold the ’67 for $25 the next day. Last year (sight unseen) I bought a total roach, and I mean a total roach, ’69 Porsche 911T soft window Targa for $3,000 – sold it a week later for $25K.

    There are only two rules when it comes to buying and selling cars:

    1) You make the money when you buy it, not when you sell it. aka buy right; as in don’t pay fair market value for a car. Example: Don’t buy a ’77 E12 for $1,200 – put $600 in parts into it – then hope to sell it for more than $1,800 – when you can just go out and buy really nice ones for $2,500 all day long. aka: Aim a little bit higher; don’t be a bottom feeder.
    1a) Know for certain how much a car is worth before you buy it – even if you have to fire sale it.

    2) Don’t buy cars that no one wants. As in only buy cars that you know for damn sure there is a list of people with cash in hand looking for that exact car. Jaguar? (other than an E type) no, Jensen Healey? no. Mercedes? Other than a 300 SL or 190 SL a big NO. A Japanese sports car they built 1.5 million of? nope. Any 60’s or 70’s American convertible? Sorry, but they jumped the shark a long time ago and everyone thinks a roach is worth just slightly less than a fully restored example. no Any 80’s car (other than an e28 M5 or possibly a 911sc) no and no.

    AIM HIGH! – otherwise you’re just keeping yourself busy, or working through a long list of cars you’ve always wanted, but can’t afford to store in a warehouse until they MIGHT be worth more than you paid for them.

  • Michael

    No, I am not crazy but well off enough with a little extra cash to be able to buy a nice looking car inatead of Gold. RELAX. I asked a question, not build a platform for a MB SL 500 value appreciation. I bought it, somebody else will buy it. I do not have a barn or shop to fix these things nor have to time to.
    So keep getting that grease under your fingers and stay anal.
    Michael.

    • Brian

      Anal? I thought the whole point of the article was choosing a car that you can buy, then sell for more when you’re tired of it. Or at least break even on. I’m all for buying what you want to drive, then selling it for less. People do that every day.

      • Reed Hitchcock

        I like the R129, but I think they still have room to fall. Brian makes some fair points, although my experience with Mercedes has been stark contrast to his experience. The only Mercedes I haven’t made money on are either post-1995 cars or cars that I just tried to put too much into to make nicer, ostensibly for myself, and sold on because I got tired of spending money on them. The Jags are a crapshoot – people are funny about old English cars when they hit rock bottom. Bottom line, as I tried to say in the article and you reiterated – how you buy a car has everything to do with how well you’ll do at the end of the day.

  • Michael

    I am not in this car for speculation. I purchased it because I like it. Would I have preferred a ’55 Tbird or ’57 Chevy Convertible? Of course but with price spreads of 1000’s of dollars with these types of cars, you wonder what you are getting. There is enough anecdotal and factual information about the vaunted MB line that gives folks like me enough information to make what I believe is an informed decision about purchasing a car that some people only dream about. $91K off the lot new, purchased for a fraction of the price and still in A1 conditoin. As I said, I bought it, if I tire of it, someone will buy it. BTW, I am confident I bought it a price I will recoup and perhaps make a profit. If I decide to let it go.
    I tracked your site for the sole purpose of gaining any information I could about the MB SL 500. I learned enough to stay away from the pre 1997 SL 500’s due to electrical problems and less than exicting transmissions. Thank you for that information.
    I do not brag, but if you could see this car and read the maintenance records from the prevous Owner, I think you would sign off on this one.
    Some Posters lurking on this site might live thier lives around cars and flipping them for profit, then there are guys like me, who like to drop the top on a nice Autumn day in NJ and take a drive, have lunch, and then park her and wait for the next nice day. Excuse me. The crazy comment still strikes me as disrespectful.

  • Jags Aren't Nearly As Bad As They Say

    An interesting list and a pretty interesting idea.
    I have to agree that the jags and mercs included in this list are hghly unlikely to pay off – and this is coming from someone that owns a xk8 and always wanted a 560SL and the XKS convertible.
    I do agree on the Porsche, though, as my local cars ‘n’ coffee and ebay seem to confirm that he SC and G50 911 are going up in price

  • Mike

    E30 M3, Mk4 supra, 190E cosworth 2.3, audi coupe quattro, E24 (?) M6, integra type R, NSX (probably over $20k for a good one)

  • Mercedes 500E | Kim Vinter

    […] Before Mercedes owned AMG, there was this: the 500E. It was a joint venture with Porsche – the only time Mercedes ever collaborated with their friends from across town – that resulted in a sleeper road rocket that looked to the untrained eye like every other taxicab on the streets of Stuttgart. Those in the know, however, will see flared fenders front and rear, special headlights, and four place seating. And those are just about the only clues that give away what lies under the hood. […]

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