Value Diminution - SL Market Letter

There are many opinions we've all heard for avoiding loss of value in collectible cars. Is it better to rebuild an original engine's block than replace it? At what point do you take original paint off a collectible car? Many people spend extra thousands of dollars returning a car to it's original color after learning how it left the factory when new. The SLML has praised the charm and often superior durability of original paint. Giving up a 90% well preserved original finish, even if faded, to eliminate a few scratches or dents doesn't make sense. Obvious losses come from hasty repair work that shows -- from overspray on rubber that should have been removed to misaligned body work that belies an accident free past. Finally, there are obstructive insurance practices can prevent proper repairs.

There's a lot thrown in that first paragraph but it can be grouped in three categories... perceptual, repair or insurance diminution. One curve ball here that doesn't always behave: perceptual assumptions aren't always born out in the real world. Look no further than the awards circle at the half dozen finest Concours d'Elegance each year. I recently surveyed a group of car show judges and appraisers including these questions: 1) During the past three years what percentage of pre-1970 national concours winners (top 3 cars in each Class) do you believe were not original paint? Averaged answer 91%. 2) During the past three years what percentage ... not original engine blocks? Averaged answer: 50% 3) During the past three years what percentage ... do you believe were color changes (but within the color choices offered originally)? Averaged answer: 55%

We all know that trophies are a validation of a restorer's long hours: consequently the marketplace rewards awards with less hesitation than "mere " preservation. The craft of restoration is honored as well the cars. There are exceptions. I particularly recall a humble, midline 1962 Rambler sedan that so impressed judges at an invitational Milestone Concours that it took Best of Show on a field with V12 Packards, Duesenbergs and Ferraris. After the awards ceremony dozens of spectators and participants circled the Rambler voicing agreement with the judges.

Congratulations to the few car clubs and Concours events that now have a separate €œPreservation€ Class. Automotive magazine editorials are applauding it and other clubs are rethinking their Classes and scoring. Separate criteria? You bet, and it will be every bit as tough to get in the top three of these soon-to-be crowded Classes as any other. "Enhanced" originality is discouraged.

To summarize, Perceptual Value Diminution of engine block changes (of correct type), repainting and color change are often disproved by car show priorities and/or later strong sale prices.

Repair-Related Diminution of Value resulting from inferior quality repairs is not a matter of perception or miss-perception. Bad craftsmanship is there for everyone to see. Fortunately today's insurance companies (and state insurance laws) allow owners to send repairs to the company of their choice and insist on OEM parts. With a collectible car the whole point of going to the best restorer you can find is to circumvent inferior repairs before they occur.

It's no secret that true restoration centers require many more hours for every step of the same work as high volume accident repair shops. The later are geared to specific work in the least amount of time. Sending parts out for replating or re-anodizing or refinishing adjacent parts for a "seamless" repair result are avoided to ensure all work is out by week's end. Using two sets of new rubber seals, one for pre-paint fitting of doors, trunk and hood, and one set to install after final painting, would be preposterous in a normal accident repair shop. When claims agents limit pay per hour or otherwise obstruct quality, the likelihood of Insurance Related Diminution emerges.

For starters, make certain your prized cars have an Agreed Value policy with a reputable insurance company that has claims experience with your type of automobile. (Request SLML back issue No. 311 about Agreed-Value Insurance). JRO

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