Investing in a Classic Rolls Royce Independent golf tips for the professional at Leisure February 2009

Buying a classic car as an investment

Janet and I have skimped and saved for years, and friends and family have encouraged us to buy a luxury car.  Our kids feel guilty at the prospect of inheriting money, and they want us to spend it all before we croak, and that's OK with us.

We have five vehicles now, but several of them don't even start, and we decided it was time to get some reliable transportation.  The old minivan is showing its age, and with the kids grown, we were game to try a different type of car.

We checked-out the Cadillac's and we were not impressed.  The Escalades are truly a land barge.  You need a ladder to get in them, they drive like a tank, and are super-hard to park (they even have a back-end video camera!).

As an investment, Cadillac's have nowhere to go but down

And talk about crap that you don't need, junk to break-down, like individually heated and air conditioned seats.  If I want my seat warm, Ill just rip one . . .

Luxury or not, we decided that the Cadillac sedans are for old coots and codgers, so off we went to the Rolls Royce dealership.

By appointment only!

Our first surprise was that the Rolls Royce dealerships will not see you without an appointment!  They don't answer the phone when you call, ostensibly to get your name and phone number so that they can do a credit check on you.

One epiphany is that you cannot buy a new Rolls Royce at the dealership!  That's right, you have to plunk-down $400k and wait six months for delivery!  That's no fun.  When I buy a new car, I want the whole experience, and I want to drive it home . . .

Since the Rolls Royce dealership only sold used cars, the salesman showed us this wonderful 2007 model, with only 4,000 original miles.  They say that a new car loses half its value as soon as you drive it from the lot, and the Rolls Royce is no exception!  It had depreciated in value to only $200,000!  At 4,000 miles, that's fifty dollars per mile, a very expensive ride!

A new Rolls Royce can depreciate by $200,000 the first year!

To see this huge depreciation for a Rolls Royce, just check out Rolls Royce sales on eBay.  Prices range from $400,000 for an almost new Rolls, down to $15,000 for a 1960s model.

The Rolls Royce dealer was super-friendly, and sold us on the quality and craftsmanship of a Rolls Royce.  Even the hubcaps are counterweighted such that the RR logo is always right-side-up when the vehicle is stopped!

Investing in a Vintage car

The numbers indicate that buying a high-end vintage car would give us the luxury that we wanted, without the grief of losing our hard-earned money to depreciation.  Better still, you can buy a classic car, drive it for a decade, and sell it for more than you paid for it!

Back when I was only 16 years old, I rebuilt an old MGA in the garage.  When I was done, there were four parts leftover!  I thought that I had done a pretty good job, but my Dad (a retired jet mechanic) laughed and said that he would not ride in it!

But I do remember that I made a handsome profit on that old MGA, and the principle of investing in a class car in a down market has not changed much since 1972.

Given that a Rolls Royce depreciates rapidly, it makes sense that the older model would be the best value, and we chose this 1972 Rolls Royce Silver Shadow long wheel base sedan:

A classic Rolls Royce will appreciate in value!

We went to Motorcar Investments, a dealership in Cary that has restored classic cars like Maserati Porsche Rolls Royce and Ferrari, all gently used, but way cheaper than new.  It's run by Larry Daniel, a UNC graduate and car buff, who did a great job in educating us about the process of investing in a vintage car.

Its extremely well-built, costing $50,000 in 1972 (about $200k in 2009 dollars), and it only has 78,000 original miles.  Best of all, she was cheap, costing less than $20,000, and she is seriously fun to drive, which is a luxury to us!

1972 Rolls Royce Silver Shadow long wheel base (LWB) formal sedan 412 cubic inch engine displacement,  6,750cc.  Here is an ad for the 1972 Rolls Royce Silver Shadow:

We already have a mess of classic cars, a 1965 Mustang convertible, Old Yeller, a 1956 Chevy dually, and now the Rolls! 

Next, I want:

I like this replica car, a great idea!

 a 1960s Porsche 911 for my birthday . . .