To earn 8% over 30 years, that $12,000 "concours" Speedster from 1977 would have to bring $224,000 in 2008
What if you could go back 30 years and buy any Porsche you'd like? What a way to make a killing. With what we know now, we'd know exactly what to buy and hold for today's great market. Right?
Noted below is every 356, 912, and 911 Porsche for sale from the September 11, 1977, San Diego Union. Take a look at the list and note which ones you would buy, as the time-traveling automotive investor.
1958 356A Speedster, $6,000
1957 356A Speedster, excellent, $9,900
1955 356 Speedster, concours, $12,000
1957 356A Speedster, concours, $14,000
1961 356B Cabriolet, rebuilt engine, $1,950
1959 356A Coupe, good condition, $2,950
1965 356C Coupe, very fine, $5,100
1963 356B Coupe, rebuilt engine, mint, $5,800
1967 912 Coupe, rebuilt engine, $3,500
1968 912 Coupe, new engine, carbs, $4,500
1966 912 Coupe, one owner, $4,700
1966 912 Coupe, new engine/trans, $5,500
1969 912 Coupe, reduced price, $5,900
1968 912 Sunroof, rebuilt engine, alloys, $6,800
1968 912 Targa, rebuilt engine, $8,500
1966 911 Coupe, must sell, $3,100
1969 911T Coupe, rebuilt engine, $5,800
1967 911S Coupe, air, mint, $6,800
1970 911T Coupe, excellent, low miles, $7,400
1970 911E Coupe, European, excellent, $7,650
1970 911T Coupe, Sportomatic, rebuilt, $7,800
What do you see about this list? Can you find the cars that best represent your shot at investment success? Since condition is paramount to value, we'll assume the claimed condition is accurate, even though it is often overstated.
Notice that five out of the seven 912s have rebuilt motors. This was a common need for a 912, even when they were still fairly new. Notice also how close the prices were for the 912s and our sample of 911s.
Speedster market still just as busy
Note that there are as many Speedsters for sale as all the rest of the 356s combined, even though Speedsters are just about 6% of 356 production. Back then, much as today, people seemed to move in and out of Speedsters frequently.
Finally, note the rarity of sunroofs in these early cars. Then as now, pre-1973 Porsches with sunroofs were hard to find, with only one on our list of 21 cars.
So which provides the best return? With the tremendous benefit of hindsight, can we pick a winner? Using a very simple benchmark, a return over 30 years of 8% with total ownership costs (maintenance, insurance and storage) of $500/year for the first ten years, $750/year for the next ten, and $1,000/year for the last ten, we can see which cars make the grade.
Those costs seem quite conservative, as in some years, the entire accrual may be used for regular repairs; in all cases, rebuilds or restorations would have to be added on top of these minimal expenses.
To earn 8% and pay for those costs, over 30 years, you would have had to obtain a price in September 2007 of 17.3 times what you paid. So that $12,000 "concours" Speedster would have had to sell in 2007 for a bit more than $207,000. Sell it in 2008? You'll need to get $224,000. If you bought the better Speedster at $14,000, you'd need to have netted $242,200 in 2007; for 2008, $261,300.
Just too new to be valuable
Looking at the values for 912s, even the lowest priced one at $3,500 would have to be sold today for $60,550, about three times what a nice 912 sells for. Step up to the special 912 with a sunroof at $6,800? You'll need to get about $116,000 today to make your benchmark 8%. It's pretty much the same for 911s. Most of them are just too new to be valuable.
Notice the 1970 911T Sporto Coupe? I bought an identical car in California in 1984, after concours paint and full rebuild, for $6,500. Hardly a good investment for the original owner, and the Sporto surely didn't help. Today, if in excellent (but not mint) shape, it would sell for about $25,000. As a car, it was great. As an investment, it was horrible for its first 15 years and not much better for its second 15.
If you picked the 1961 356B Cabriolet, you'd be right on the numbers, but my guess is the condition was only fair and you'd have spent a small fortune-at the time or later-putting it in top condition. If you spent just $8,000 to fully restore the car in the late 1970s, you'd have needed to get over $170,000 for it in 2007. Possible, but not likely.
How about the 356A Coupe? They have appreciated solidly in the past ten years. Again, the condition is the big equalizer, and if you had to restore it, you'd be buried quickly. Not well known was the existence of a small band of individuals "importing" Porsches from the rust belt into California to supply the demand for used 356s. So there is a chance a car like this needed major work. It's not likely it would be a winner.
How can you win in vintage Porsches?
Perhaps the 1967 911S would work. I recently heard of a superb original '67 S sunroof selling for $100,000, but it was an exceptional example. How'd we do with hindsight in our list from San Diego? We'd need about $117,000 for the 1967 S advertised above, if we spent no money on major work over the 30 years.
If you can't pick a single car from 30 years ago and make it a winner, how the heck can you win at investing in vintage Porsches?
One important lesson from history: It has been the factory race cars that have been the big gainers. These cars from the classifieds were all road cars. Another lesson is that the rate of price changes in vintage Porsches is anything but constant. Porsche prices accelerate strongly at times, can flat line, and do actually go down. Think about that as you consider the "investment quality" of what you own.
Or better yet, invest in financial instruments and enjoy your Porsches... as cars.