Advice for Car Collectors: From First Rides to Last Rites - NYTimes ...

Newcomers buying a classic car face a potentially confusing first-time experience: What car should I buy? Where should I buy it? How do I know I?m paying the right price?

Another, even more frightening prospect arises later ? much, much later, it is hoped ? when decisions must be made about what happens to a car collection after the collector dies.

Advice for the fledgling and the fated was available during the recent Arizona classic car auction week. The six major auctions offered nearly 2,700 vehicles and resulted in sales of more than $220 million, with prices ranging from $1,350 for a 1994 BMW sedan to $8.25 million for a 1958 Ferrari 250 GT California Spider.

Typical advice for newcomers includes starting slowly; joining a classic car club and seeking advice from experienced members; doing research into pricing trends for your favorite model; and, of course, not spending more than you can afford.

Rick Carey, a veteran journalist who covers the classic car hobby and the details of sales transactions, agrees, but only to a point. He told the audience at the Arizona Auction Week Preview, a panel discussion held by the Phoenix Automotive Press Association, that it did not really matter what car a newbie buys.

?Just buy the first car you see that appeals to you,? he said. Sure, he added, you?ll be making a huge mistake. ?But you will learn so much from making that mistake? that a year later you can return to the same auction, sell the car and make an educated purchase.

In other words, think of the cost of that first car as the tuition for your Introduction to Classic Car Collecting 101.

?Determine your goals,? said Roger Rodas, a financial adviser and car collector who was part of another annual panel discussion, this one held by Russo & Steele, the auction company.

?Do you want to use the car for daily driving, to enjoy on weekends, or as an investment?? he asked. Immediately he answered his own question, saying newcomers expect too much if they want to drive their classic every day or sell it for big profit somewhere down the road. Instead, he said, ?buy something you?re going to enjoy on weekends,? driving it to a local car show or cruise night.

?Get a car you?re going to enjoy,? agreed Drew Alcazar, Russo & Steele?s founder. For the newcomer, Mr. Alcazar said, enjoyment means buying a car that is not mechanically finicky. For example, he said, something with a single carburetor, perhaps a mid-?60s Ford Mustang.

Tim Suddard, an automotive magazine publisher who collects, restores and races vintage vehicles, suggested another mechanically straightforward first car would be a 1965 Chevrolet Corvette. Should a vintage Corvette or Mustang malfunction on a road trip, Mr. Suddard said, parts to make repairs are available at nearly any auto supply retail store.

O.K., so you started well and your collection has grown in size and in value. But admit it, you?re getting older. Now what?

To address that question, Russo & Steele held a second seminar on collection management and estate planning. Paul Mershon of Silverhawk Financial said the primary objective was to avoid what he called a ?tax disaster.? He said that without proper planning, a $20 million collection could face an immediate $6 million tax bill, and if the heirs have to sell vehicles to pay that amount, they could be liable for capital gains and estate taxes as well.

Various forms of trusts, including a charitable trust, can ease the transition, and even produce continuing income rather than overwhelming taxes, Mr. Mershon said.

Michael Tucker, a Phoenix lawyer who specializes in trusts and estates, agreed that planning is vital, in part because of a demographic shift he sees. ?Children aren?t necessarily prioritizing collections of anything,? he said.

Which brings us full circle to Corky Coker, a classic car enthusiast whose family-owned business produces tires designed for vintage vehicles. Mr. Coker?s advice for the fledgling collector?

?What you should do is to get your family involved,? he said, adding that he was a child when his father took him to his first car event in a 1910 Reo.

?It needs to be a family hobby, not something that?s divisive for the family,? Mr. Coker said.

Source: http://wheels.blogs.nytimes.com/2013/01/31/advice-for-car-collectors-from-first-rides-to-last-rites/

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