How long will premiums over MSRP last? Our Appraiser answers this and more
Dave Kinney, appraiser and publisher of the Hagerty Price Guide is back to answer select questions from the comments section of the previous column. While Dave can’t put a value on an individual car in this column (that’s what people pay him to do in his appraisal business, after all), he can field questions about the appraisal process, how to go about buying and selling classics, and the industry as a whole. Have a question of your own for a future article? Ask in the comments section.
“Instant” collector cars: Hi Dave, when do you think C8 Z06s will begin selling in the new or used market at MSRP or less? —Nick
Great question Nick, and I’m sure it’s one that a lot of folks are thinking about.
The phenomenon of the “instant collectible” is actually rather new in our car world, though I personally would date it to the mid-Seventies where General Motors rolled out a series of collector Corvettes, including pace cars, as well as the famous “last of its kind” 1976 Cadillac Eldorado convertible. Often, the early collector’s series were not much more than stripes, badges and perhaps a distinct color, often with a limited build number. What worked fifty years ago won’t open people’s pocketbooks today—you need more exclusivity. The manufacturers have learned to make an effective instant classic, it better have a real distinction from the others in the model line-up. More horsepower is good, distinctive bodywork won’t hurt, and a tie-in with a race series is better.
Back to the Corvette Z06. At this point, it’s an issue of supply and demand. GM likes to build more cars and make more money, so in this case, the manufacturer is all in. GM has even taken steps to give Z06 owners a spiff if they keep their cars and don’t flip them.
I don’t know a timeline where Z06 supply and demand meet, but I am seeing some demonstrable softness in the past few weeks among some in-demand models. I talk to dealers and market-makers all the time, and I can tell you that when the financial incentive for buying a car to flip disappears, sales to the flippers falls off fast, often dramatically increasing supply. If I were you, I would make my wishes known to a number of dealers in a number of markets. Keep in mind if it’s “let the good times roll” in the Northeast, it might be “Gotta get rid of this stock” in Florida. Or Salt Lake, or El Paso. There are hundreds on Chevy dealers out there, and the chances of finding one ready to deal only increases with each email you send or call you make. Let us know how things work out.
PPI vs. appraisal: How do an appraisal and a pre-purchase inspection differ? Does an appraisal generally include a suggested purchase price of the vehicle? —Paul Gommel
These are two very different animals, yet a PPI and an appraisal are often confused by the consumer. Generally, a PPI is for someone looking to understand a car’s current state of repair before buying a car, while appraisals are most often done for a change in status of the car or the owner. Change of status examples include a bank loan, a divorce, insurance scheduling, estate, or business dissolution. An appraisal is a researched value snapshot in time; a PPI is more detailed on the mechanical side.
A PPI is a mechanical inspection and is often what you see in something like a “125 Point Inspection” that includes a whole host of visual inspections of operating systems. Depending on the type of car (and the contracted service) it could also include a host of “invasive” procedures, such as a leak down test, removing wheels to check brake status, or even removing the heads to check for wear.
Do I look for, and point out anomalies that I see when I’m writing an appraisal? You bet I do. A ticking sound in the engine, non-working lights, tears in the vinyl or leather, a broken window are the normal types of things we will note, and, when necessary, count down in our report. One thing you do not want me to do with your car is to take it apart; the chances are near 100% if I was able to get it back together there would be “extra” parts. I’m a valuation guy—when I need something fixed, I look for a qualified mechanic.
What’s with post-merger AMG/Mercedes values? I have a 2005 Mercedes CL65 V-12 AMG with Renntech upgrades, supposedly 1 of 142 built. I paid 25K 4 years ago but the prices have not gone up and remains controversial ABC suspension. Any hopes for the future? The service costs are high but at least you don’t have to remove the engine for maintenance, like you do with a Bentley or Ferrari.—Robert Atamian
I’m a huge AMG fan even though I have never owned one. We have recently seen a huge uptick in early (before Mercedes ownership) AMG cars, and they have gone from neglected, seemingly needlessly complicated monsters to desirable expressions of extreme motoring from an earlier era. Gone are the days when every other independent Benz shop had an AMG with a large unpaid invoice attached rotting outside in the elements.
I say hang in there, Robert. Keep the services up to date and enjoy your car in every way. I know there are those out there who think post-Mercedes ownership AMG cars will never appreciate; however, the list of cars that took a long time to take off in value is enormous. The naysayers will also point out that you have a V-12 in a V-8 Mercedes world. In the collector car world, sometimes needlessly complicated is what eventually winds our watches, grabs our attention, and ultimately makes us buy.
And, while we are talking about the Three Pointed Star, Blake Woith had this question:
It seems like late model SL Mercs are fabulous cars but resell for relatively low numbers. Why is that?
You know how they say in real estate its Location, Location, Location?
Well, in cars, especially when there are lots to chose from, its Condition, Condition, Condition. With expensive sports cars built in decent numbers, at the end of the first and second caretaker’s ownership, the car often reaches collector status. The banker, lawyer or investor who bought his or her SL new usually wanted and needed it for transportation first, status second, and fun third. The collector car owner often flips that narrative around and goes fun, status, and transportation for their wants and needs.
With hundreds, if not thousands of five-, ten-, and 20-year-old SL’s of different generations to choose from, those in the best colors, with the best service history, with the fewest amounts of paintwork tend to find new homes first. In this market, I have witnessed cars from the same year, in the same colors, sell from $10k to $40k. Do your homework here, as the $40k can be a great buy while the $10k car can be a hopeless disaster. A pre-purchase inspection by a qualified Mercedes-Benz specialist should help you sort the good-looking car from the good-for-you car.
And, for the record, not every Ferrari or Bentley needs to have their engines removed for service. Sometimes it just seems like it.