Before you buy: Research, then research some more
For any auto enthusiast the biggest risk is buying something that isn’t what they think it is. Maybe the seller has made “mint condition” claims for a car that has been put back together a few times. Or maybe there is no vehicle at all. Take the experience of one client, an experienced collector who transferred $6 million to a dealer for his next acquisition, a vintage roadster. He was thrilled to welcome the new beauty, until he realized that the seller possessed neither the title nor the car and had disappeared with the money.
Collectible-car purchases are generally buyer beware, so it’s crucial that you vet every potential acquisition thoroughly. So, before you make any commitments:
Turn to books: Craig Jackson, CEO of the Barrett-Jackson auction house, has famously said: “Fill your library before you fill your garage.” Reading available materials helps you to better understand the vehicles you are considering, particularly their typical valuations.
Do due diligence: If it is possible, speak to the previous owner. At least, spend time with the car. Get others to examine it as well. This is not always an option when you are buying at auction, but most events provide advance lists of the cars up for sale, which includes a detailed report of each. Take advantage of such information to learn about condition and provenance.
Consult the experts: Some people can rattle VIN numbers off the top of their head. They can be the head of a car club, or a concour judge. Yes, you may have to pay for their knowledge, but it’s worth every penny if it keeps you from going after the wrong vehicle
Scour the internet: Join member websites of the makes and models that interest you and spend time in the chat rooms. Enthusiasts are generally more than willing to share what they know about the vehicles themselves and reliable sellers.
Look for “matching numbers”: This term is used to describe a collectible with original parts, whose matching factory serial numbers make it more valuable. For insight into the condition of car you are considering, including which parts are original, compare the numbers on the engine, chassis, rear axle and other elements.
Assess the seller: Today, many cars are sold sight unseen through online websites. If you are new to this method, look for feedback from previous users to ensure you are working with a reputable online dealer.
Inquire about insurance: Before you buy, call your insurance advisor to make sure the acquisition is insurable. Carriers do sometimes deny coverage to a high-performance vehicle, particularly one with a poor claim history.
During the sale: Protect yourself against fraud
As with any collectible purchase, be extremely cautious when you pay, especially if you are wiring funds. Unfortunately, we know many buyers who have transferred money only to learn that it has been rerouted because they were dealing with a scam artist. The best way to avoid this is to employ safe practices. This includes all the usual pre-transaction efforts, such as calling the bank to verify the legitimacy of the destination, then double- and triple-checking the routing and account numbers.
Immediately after purchase: Insure your investment
Your collectible car should be properly covered before you move it anywhere, to protect against in-route mishaps. Before you take possession, you should:
Rely on the expertise of your insurance professional: Collectible car insurance is a specialized practice, so it makes sense to speak with someone who is especially well versed in the market. Without a knowledgeable advisor to guide them, many collectors end up overpaying on premiums or with coverage that doesn’t sufficiently protect their collections.
Opt for collectible-car coverage: Such policies are tailored to the needs of this particular pursuit, so they offer benefits that differ greatly from regular automotive coverage. For example, you and your carrier jointly decide on an agreed value, which will be how much you are reimbursed in the event of a loss (in some cases, reimbursement accounts for inflation as well). Some policies include reimbursements for diminished value should there be a partial loss. Most collector car policies include roadside assistance. Be sure to read the details.
In transit: Avoid worst-case scenarios
Whether you are hiring an experienced moving company or intend to pick up the car yourself, it’s important to know the coverage parameters. We recommend that you:
Choose a transport company with a reputation for handling collectible cars: They will likely know more than a standard vehicle transporter about how to handle such vehicles—for instance, that it should be moved on an enclosed trailer—and are accustomed to working with collectors. Be sure to ask how much insurance they carry; ideally it will reflect the total value of the cars being transported. (Note: You will still want to carry your own insurance, as transport companies rarely carry coverage to adequately cover most claims.)
Make sure your self-transport method is covered: Collectors often pick up their new acquisition with a trailer attached to a car or truck, not realizing that personal insurance generally doesn’t cover such a setup. Talk with your insurance advisor to make sure proper protections are in place.
Upon receipt: Minimize surprises
You now have this wonderful vehicle in your garage. Congratulations! Of course, you want to confirm it is in good shape—and stays that way throughout your ownership. To that end, we suggest you:
Make sure it is roadworthy: No matter what the seller has said about the vehicle’s condition, get a thorough inspection from a mechanic familiar with your type of car. It is much better to learn you have inherited faulty brakes before you hit the road!
Store it safely: Depending on the car’s value, many insurance carriers will insist on the vehicle being kept in a locked private garage that is equipped with smoke and burglar alarms. If you do not have a suitable space on your own property, search for garages created specifically for collectibles.
Exercise it regularly—or prep it properly: When a car sits too long, the gas and fluids go bad, the battery breaks down and mechanical issues arise. Frequent drives maintain a good working condition, but if you don’t intend to take it out on the road for a while, drain the fluids and remove the battery before storing it properly.
Certainly, purchasing and caring for a collectible car takes time and effort, but know that you can always turn to us for advice on risk management strategies. From the moment a vehicle sparks your interest through all the years of high-performance ownership, we will work side by side with you to ensure that the pursuit remains a pleasure.
