Classic car conundrum
These rules of thumb will help in your quest for a collector car

Collector automobiles are like any other collectible commodity - some are more desirable than others, while some have momentary popularity and others have meteoric rises in value followed by immediate crashes as their balloons burst.

While any car older than 25 years could be considered a collectible automobile, few have any real value. And while some might appreciate over the years, rarely will their appreciation outstrip inflation. I often hear people mourn the fact that they could have purchased, for instance, a 1957 Chevy convertible for $10,000 years ago when they see one that might currently carry a $50,000 price tag. What they are not recalling is that they could have bought a house for $30,000 during the same period.

If you want to dip your toes in the collector car market, you can do well financially and have the fun of driving and enjoying your investments as they appreciate. Other advantages are the social aspects and enjoyment derived with attending collector car auctions, car shows and mingling with other collectors and hobbyists. Unlike most other investments, you have the added advantage of visiting your automotive investments whenever you saunter into the garage.

Collectible cars have many different financial entry levels starting with good quality cars that can be had for under $50,000 and culminate with cars whose values can be charted in the millions of dollars.

Cars carrying price tags of less than $100,000 are usually representative of what is popular with the car hobby as a whole. Currently American muscle cars are dominating the market, followed by British and European sports cars and to a lesser extent, late 1950s and early '60s luxury cars like Cadillacs and Buicks.

These are the cars that most people will get their feet wet with and there is the potential for making small profits, but only if you are in front of the wave, not on its crest or in the trough behind. Most who profit from cars like these are collectors who have bought it because they liked the car rather than its investment potential. Anyone who bought a big block Corvette, a Boss Mustang or Cobra 10 years ago will find themselves with a very desirable commodity if they choose to sell it in the current market.

On the other side of the coin, if they have owned a Corvair Spyder Convertible for the last 10 years, they can expect to see very little difference in its current value despite its relative rarity.

The rule of thumb is that any car that is very desirable in its heyday (when it was new) will likely carry a cachet that other less popular or plebian cars of the period will never achieve. For instance, current cars with this appeal would be the Dodge Viper, Plymouth Prowler and Corvette Z06; and perhaps the Audi TT, BMW Z8 and maybe, and I stress the maybe, the Ford Thunderbird.

Cars that are outright failures like Ford's Edsel of the 1950s and currently the Pontiac Aztek, while having fringe collector interest rarely demand much money. So if you were thinking of running out and buying an Aztek to put away for 30 years don't bother.

So what should you buy? First, purchase a car that you are going to enjoy owning. If you buy one that you enjoy but that has not appreciated much when you sell it, at least you have derived some pleasure from its ownership.

When buying, find out which models of your chosen car hold the most collector interest and go after the most desirable model that you can afford. For instance, a 'Hemi' Plymouth Barracuda convertible can be worth over a $100,000 but that doesn't mean that a small block, low-optioned Barracuda is also worth big money. While you may not be able to afford a Hemi 'Cuda, you might be able to swing the 340 Barracuda with a Six-Pack and other desirable options.

Thirdly, if you are looking to sell you car, don't get greedy. It is a fact of human nature that if we want to buy something it is worth very little, but if it is ours and we want to sell it, then it's worth a king's ransom. When you want to sell a collector car, look into its true value on the market and scrutinize yours from the perspective of an interested and sophisticated buyer. Don't overprice and pray there might be a rube out there. Even rubes have access to the Internet.