tMichaelis Corvette Perspective

Investments can be risky endeavors. Stocks are at the whim of daily news breaks and the real estate market is suffering from its own ups and downs. Investing in the 21st century feels more like a night in Vegas than sensible decision making. All of this is leading some people to seek out fun alternative choices. For those individuals who desire a sound investment (and one that is more exciting than stocks and bonds) buying a classic car can be a rewarding financial venture.

An undeniably exciting market, classic Corvettes are seeing a surge in popularity as America’s love affair with automobiles is fostered by television networks like the SPEED channel, ESPN, the Discovery Channel and a growing number of high-profile events like the Barrett-Jackson auction and the Mecum muscle car auctions, just to name two.

I believe that the investment aspect of owning a Corvette is only in its infancy.

Several factors are signaling a rise in buying classic Corvettes as financial investments. For one, demand for investment-grade, vintage Corvettes has steadily increased and has a solid growth pattern that dates back to the early seventies. There is a growing number of Baby Boomers – anyone born between 1946 and 1964 – who have raised their kids, paid for college tuition and now have money to invest in hobbies and passions that have been tucked away for 20 years.

Baby Boomers hold the largest ever collection of dispensable, discretionary income, and they want something special to enjoy the wealth they’ve accumulated. Corvettes hold such an iconic status in America that they’ll always be in demand. Plus, international demand, natural disasters and auto accidents shrink the supply of Corvettes, which translates into a greater value for those that remain.

To further demonstrate classic cars’ investment potential, the duPont Registry recently compiled a list of the top 10 classic cars that will make money for their owners. Among the list was the 1967 Corvette Convertible 435 hp 427. This vehicle is the “Holy Grail” of classic Corvettes. Additionally, famed car editor Keith Martin has introduced Corvette Market, a magazine solely dedicated to the Corvette marketplace. In his recent “Guide to Car Collecting,” Martin tracks the 1,000 most expensive cars of 2006 and cites 22% (221 vehicles) were Corvettes; almost 10% (97 vehicles) were 1967s.

Corvettes are truly undervalued, especially when compared to the recent sales of some muscle cars (tin cans and Rust-o-leum) that make headlines when sold at high-profile events. These tin cans have no long-term track record other than zero to sixty, but older Corvettes, especially 1953-1972, have a solid pattern of growth that dates back to the early 1970s. What drives it? Read on…

Corvette Popularity Knows No Boundaries
Today’s market is a world market and not just restricted to North America, which is demonstrated by ProTeam’s sales in the last 12 months. From the United States to countries across the globe like Europe, Australia, New Zealand, Japan – and recently countries like Russia, Hungary, Croatia, Kuwait, South America and soon China – enthusiasts are digging deep into their pockets to purchase a classic car that is truly special to them. Within the next 10 years, China will become a dominant purchaser of classic cars. As China continues to industrialize, they will create pockets of wealthy people who want worldly collectibles. Even one-tenth of 1% is a lot of people in China. With more and more vehicles being sold to international customers, there will most likely be fewer Corvettes available for North American consumers.

And this rarity leads to more precious classic cars and, ultimately, a boost in value and equity. What To Buy: Over the last 15 years, the collectible car market has outperformed Wall Street, portfolios and the innocuous 401Ks. Consider these examples, 1) A 1953 Corvette bought five years ago from ProTeam for $105,000 recently crossed the Mecum Bloomington auction block for $296,625 – a steal compared to other recent auction sales this year! 2) In February 2002, a customer purchased a Rally Red 1966 ProTeam Corvette equipped with a 425 hp 4-speed for $63,500. The car was sold at the Barrett-Jackson auction in January 2007 for $143,000. 3) And a 1963 sold by ProTeam in January at auction for $255,000 made a 31% leap in price when sold six months later for a cool $367,500. 4) Three years ago, a couple purchased a ’67 black tri-power, freshly restored Corvette from ProTeam for $230,000. Since then, they’ve turned down numerous offers in excess of $400,000, unwilling to part with their “baby,” as they refer to it. 5) And how about the 435 hp black 1967 that sold in June 2007 for $467,250 at public auction…a car that sold new for around $5,000.

To make the most of Corvette purchases: Buy the best Corvette you can afford today, because the Corvette you buy is the Corvette you’ll have or want to sell some day. • Buy cosmetics – buy paint and chrome, unless you have a shop and knowledge to control your costs. • Research – arm yourself with knowledge provided in the numerous Corvette publication and hire a true expert to examine your potential purchase. • Don’t trade off cosmetics for a numbers match drivetrain because it will always cost more to restore (paint, trim, chrome, etc.) a Corvette needing restoration versus putting the proper numbers motor back in your vehicle, if that’s your venue. Numbers have become secondary to cosmetics, and it’s about time. • Realize that Corvettes are old cars and they require more attention than that new Chevy or Ford setting in your driveway (especially if they aren’t taken for periodic “work outs.”) • Be a smart seller. High-profile events like the Barrett-Jackson and Mecum Muscle Car auctions will get you more money for your car than newspaper and trade publication advertisements. Plan ahead if you’re considering selling your baby: seek good lot numbers (pay a premium if you must) and baby-sit your car during the event to answer questions and show pride in your car – it is a reflection of you, and people simply pay more if they like the seller.

Ultimately, the best part of investing in classic Corvettes is the joy of owning them. Join a club, go to a cruise-in, put your Corvette in local shows and wave to other Corvette owners, because the Sunday afternoons spent shining your Corvette, followed by a relaxing summer drive make this investment worth every penny.

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Just for the heck of it, I asked Christine in ProTeam’s accounting department to check the records and see how many first generation (1953 to 1955) Corvettes that ProTeam has owned in the last 15 years.

Wow! Check this out! 1953 to 1955 Corvettes owned = 74 of which 19 were 1953’s, 44 were 1954’s, and 11 were 1955’s.

I remember five years ago when we had to work hard to get someone to pay us $100,000.00 to $110,000.00 for a 1953 and now they consistently sell for $250K to $450K with no end in sight. Fun Fact: Five years ago I sold Banker Bob a nice 1953 for $105,000.00 and yes, Bob just sold lot S91 at the recent Mecum Bloomington Gold auction for $296,625.00… Vette-N-Vestment!

Prediction: as the availability of the 1953 Corvette dries-up the first generation buyers will have to resort to the NEXT BEST THING… that is right! 1954 Corvettes will begin appreciating at a more rapid rate, especially the good ones with the only difference is top color as all 1953’s were white paint with red interior and a black soft top.

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295 Corvettes were offered with 145 selling with a sold percentage of 49%. Total auction sales were $8,255,306.00 and highlights are as follows:
Lot #S53 - 1953 Corvette Convertible: $283,500.00
Lot #S91 - 1953 Corvette Convertible: $296,625.00
Lot #S55 - 1955 Corvette Convertible: $178,500.00
Lot #S32 - 1957 Corvette Convertible: $152,250.00
Lot #S35 - 1960 Corvette Convertible: $102,375.00
Lot #S63 - 1963 Corvette Coupe Z06: $367,500.00
Lot #S67 - 1967 Corvette Convertible Black 435: $467,250.00
Lot #S73 - 1969 Corvette Convertible: $97,125.00
Lot #S93 - 1996 Corvette Convertible Grand Sport: $80,850.00
Terry’s Overview: The 1953 Corvettes that sold may sound quite expensive but I predict any restored 1953 Corvette will benchmark at 500 grand within 18 to 24 months at hi-profile events, as several recently sold for almost 500K. The 1963 Z06 that sold for $367,500.00 recently sold for $255,000 in the desert (Jan. ‘07). That is a 31% leap in just six months… Wow! The 1967 Triple Black 435 convertible that sold for $467,250.00 was a no excuse well-known “Real Deal” and quite frankly I would rather have $500,000.00 in one “Real Deal” than the same money in 4 or 5 wanna-bee’s with fake trim tags and fake paperwork. The 1996 Grand Sport convertible that sold for 80 grand plus, had approximately 6,000 miles on it. These cars are hot as only 190 convertibles were produced. I guess this kinda shows us that NOT all high prices achieved at auction are Arizona of Florida driven!!!

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Corvette Market Magazine asks Terry’s Opinion. Read it here first: The Corvette market today is seeing a resurgence of true collectors and enthusiasts who are choosing to buy these classic vehicles as a collectible to drive and enjoy. Demand is definitely growing, as evidenced by the rising price tags these cars are drawing. The popularity of Corvette collecting, I believe, is growing at a pace that outstrips the availability of nice cars, which can only lead to bigger demand down the road. Older Corvettes, especially 1953 to 1972, have a solid pattern of growth that dates back to the early 1970s. What drives it? Well, today’s market is a world market and not just restricted to North America, which is demonstrated by the sales we have made in the last 12 months. From the United States to countries across the globe like Europe, Australia, New Zealand, Japan – and recently countries like Russia, Hungary, Croatia, South America and soon China – enthusiasts are digging deep into their pockets to purchase a classic car that is truly special to them. Additionally, factors such as the disposable income of many Baby Boomers (those born between 1946 and 1964) will lead to continued demand of the Corvette. This population group is financially stable and free from the responsibility of children, giving them the time and money to enjoy a truly magnificent classic car. Classic Corvettes are red hot and I only see it growing more and more each year. Corvette Market Magazine is from the same publishers of Sports Car Market and hits newsstands soon.

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There are two truths when it comes to marketing in the 21st century, 1) consumers are bombarded with more marketing messages than in any other time in history, 2) consumers want to feel good about themselves when they do make their purchase.

These axioms are a negative and positive for charity car raffles. How do they reach above the din to deliver their message while increasing ticket sales? Open a page in Hemmings and it would appear an impossible task. It is daunting but not impossible… for those willing to put together a winning game plan and follow through on that plan.

Having built and presided over the largest Corvette collection in the world, I am inclined to tailor my message to Corvette raffles but let me remind you that Corvettes have become the most popular raffle marque. People come back to these same raffles year after year… as long as they are reminded. America’s sports car and doing good works go hand in hand; most every Corvette club is affiliated with a charity of choice and a fundraiser planning committee.

Before putting your signature at the bottom of a sales contract and sitting with the raffle car at local cruise-ins full of high expectations on diminishing returns, let me give you two words of advice: contact and convenience. 1) Keep the people who have already donated to your charity a second (third, fourth, and fifth) chance to help your cause by compiling the names into an easy to access database. 2) Don’t make the people jump through hoops to get a raffle ticket. We live in a digital age. Think electronic from the way you choose to disseminate raffle information to the way you exchange money for a ticket.

This is a topic that is of great interest to me. I’ve been intimately involved in charity car raffles for over 20 years. I am proud to have increased ticket sales with these two principles in mind contact and convenience. Would you like to talk more? Drop me a line at: terry@proteamcorvette.com

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Turn Key Cars are driving the collector car market. Sound advice is to buy the best Corvette you can afford, because the Corvette you buy today is the Corvette you’ll have to sell someday. Now we are seeing a resurgence of true collectors and enthusiasts buying Corvettes more as collectibles to keep and enjoy, rather than a focus on investment. Interest in collector Corvettes has never been stronger and prices reflect this fact… It’s purely supply and demand!

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As far back as anyone can remember, car owners, for whatever reason, tire of the color of their car and repaint them a different color and that is not a problem but now and for well over fifteen years, several people or companies have made repro trim tags that generally are used to defraud the buying public; ie. counterfeiting. The trim tag is part of the DNA of the car and can be decoded to determine body build date, paint, trim, and options that could be available on that particular car. The trim tag is a General Motors protected trademarked registered item and it is highly unlikely that they, GM, issued a license agreement to anyone to “reproduce.” warning: Replacing trim tags in some states is contrary to law as a repro trim plate has little to do with restoration but more so with fraud.

**2003 marked the advent of published knowledge to determine without a doubt the originality or lack thereof of a trim plate, thanks to the efforts of NCRS (National Corvette Restorers Society) and its membership.

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First and foremost, buy the Corvette that you like and look for your ROI (return on investment) to be increased utilizing the fun factor as there is an amount of pleasure return that no paper folio will ever match. If your number one reason is an investment, you should probably apply for a dealer’s license and don’t forget what has been happening in the real estate market to the “flippers” in Las Vegas, Arizona, Florida, and other hot real estate markets.

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This is a subject of intense interest as the value of collector cars soars. I wanted to provide some insights about this and hopefully clarify some misunderstandings.

I’ve attached the National Corvette Certification Board’s (Bloomington Gold judges) policy and it pretty much mirrors my policy and thoughts over the past 20 years.

First of all, many people believe that a Corvette must have its original engine to qualify for a Bloomington Gold Certificate. In reality, that is not necessarily true.

If the engine stampings and the rest of the engine appear to be within 95% of they way they would have appeared at the day of production, there is no problem. In other words, if a restorer has accurately reconstructed the engine and stampings to the point that it appears no different from factory, it will pass. But it needs to be accurate to the gnat’s eyebrow.

For example, our “Last” Corvette has an accurately restored engine (which is no secret) and has easily passed the Bloomington Gold standards.

On the other hand, if the inspectors can easily detect differences in the configuration or finish of the engine block, it will not qualify for a Gold regardless of its overall score or cosmetic perfection. Therefore, even though “the numbers might match”, the differences in shapes of the stampings (compared to factory) will be detected by experts. And Bloomington Gold has the judges, technology, and records to do this very reliably.

Unfortunately, some less experienced judges (or over zealous “experts”) can out-fox themselves by not knowing how to distinguish between inaccurate stampings and factory “flukes”. If a judge makes such a mistaken identity, it may defame the automobile and engine in question. This is a disservice to the owner, but more importantly to the automobile and even the industry in general.

So what is the difference between accurately restoring an engine stamping and counterfeiting one? For this answer, I’ll defer to Bloomington Gold’s definition which has been their policy for decades. It is also one that I strongly support.

From Bloomington Gold’s Procedures and Protocols, page 4/5.

RESTORATION vs. COUNTERFEIT
It is not Bloomington Gold’s policy to “look for counterfeits”. However, if a counterfeit engine, trim tag or VIN is discovered, our policy subjects the owner to immediate disqualification and ineligibility to participate in future Certification events. If a Bloomington Gold judge is aware of such a counterfeit, he is required to advise the Division Director. Furthermore, if any Bloomington Gold judge is found to be associated with a Corvette entered in Certification which is determined to be counterfeit, he is subject to immediate and permanent dismissal from the National Corvette Certification Board.

Bloomington Gold does not necessarily consider “re-stamping” to be counterfeiting. If the “re-stamp” was done with the intention of restoring or replacing the original numbers rather than deceiving, Bloomington Gold does not consider that to be counterfeit. Bloomington Gold uses Webster’s Dictionary to define:

restoration: “To renew; to put back into existence or bring back to a former or original state.” For Example:
1. Repainting an original Tuxedo Black Corvette with Tuxedo Black paint.

2. Restamping an original block with the same CID/Suffix/VIN as that block had when it left the factory.

counterfeiting: “To make an imitation of something else with the intent to deceive or defraud.” For Example:
1. Repainting an original Glen Green Corvette with Riverside Red paint and changing the trim tag so it appears it left the factory as a Riverside Red Corvette.

2. Replacing the engine in a small block Corvette with a big block and making the CID/Suffix/VIN stampings appear that the Corvette left the factory as a big block.

3. Replacing the carburetor on an engine with a fuel injection unit and altering the block numbers and suffix code to make it appear it left the factory as a fuel injection Corvette.

Copy from existing material excerpted from Certification Guidelines
Note: Reprinted with copyright permission from Bloomington Gold

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BUY THE BEST CORVETTE you can afford Today, because the Corvette you buy is the Corvette you’ll have to sell Someday

BUY COSMETICS - - Buy paint and chrome, unless you have a shop and knowledge to control your costs.

RESEARCH - - Arm yourself with knowledge provided in the many Corvette publications.

DON’T TRADE OFF COSMETICS FOR A NUMBERS MATCH DRIVETRAIN - - It will always cost you more to restore (paint, trim, chrome, etc.) a Corvette needing restoration vrs. putting the proper numbers motor back in your vehicle if that’s your venue. Numbers have become secondary to cosmetics and it’s about time (full circle)

REALIZE THAT CORVETTES ARE OLD CARS - - Whether it be any 5, 10, 20, 30 year old car- They are just old cars. They require more attention than that new Chevy or Ford setting in your driveway especially if you don’t take them for daily or weekly workouts. The best running and most reliable automobiles are those used on a regular basis.

THE MOST IMPORTANT IS GO OUT AND HAVE FUN - - DRIVE YOUR CORVETTE - - Join a club. Go to Cruise-ins. Put your Corvette in local shows (but don’t take it personal). Wave at other Corvette owners- Enjoy!

BUYING ONE CORVETTE is the beginning of a collection and buying your second is never the end.

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