This series is designed for the person new to the world of muscle cars. You know you wish you had one, but honestly, they all look great to you and you have no idea where to start. We’ll assume you’ll really like the car, too, even if you’re buying it as an investment. Our series will cover the following topics (and by the end you’ll be ready to drive your new journey down the road):

1) Determine the make and model you want

2) Determine how you want to use the car (drive often, just show the car, etc.)

3) Determine your price range and payment method

4) Evaluate the car, take out the insurance and buy

Since we already covered Topic #1 (Deciding which make and model of car to choose) and Topic #2 (Determining how you want to use the car), we can now move on to the next step.

Today’s topic: determine your price range and payment method.

After completing steps 1 and 2, you should now have narrowed down your choice of make and model quite a bit, and you’ve probably already started to notice some prices. Now let’s dive into determining what a reasonable price range would be for a particular car, and then decide how to afford it.

* Price range:

Determining the price range for a major purchase, whether it’s a muscle car, fighter jet, or dishwasher, often comes down to assessing your personal financial situation and determining what you can afford. We’ll assume you already understand that and stick to determining the price range that the make and model you’re looking at may fall into.

So how is the price range of a classic muscle car really determined? Simple: you need to take a look at what the market thinks you are worth. Like real estate, muscle car values ​​are determined by what the market thinks the cars are worth, not by calculating the total cost of all the parts. The price that people are currently paying for muscle cars is key. It is something subjective that is related to supply and demand. Plus, unlike 99% of modern cars, muscle cars from the ’60s and ’70s no longer lose value. Its value bottomed out a long time ago and has been rising ever since. In recent years we have seen a bit of a bubble in values, but they are still quite high.

Now that we understand how value ranges are established for a make and model, it’s clear why understanding how you’ll use your muscle car is critical when shopping for a car (see our previous post for more details). If you’re planning to have a fun weekend away, a mid-price range will serve you quite well, and may even be cheaper. If you’re buying a car for an investment, a mid-price range car is probably the LOWEST car value you’d go with. Remember, unique cars, popular cars, and all original cars will be at the higher end of the price range for that particular make and model.

To see what the market thinks various car makes and models are worth based on their changing condition, simply visit Keith Martin’s Collector Car Price Tracker. It’s one of the best resources on the web to get an idea of ​​the trends in the industry based on SALE car prices, and you can see values ​​for the past few model years by model. (The cost is fairly cheap, but as an option, you can get a free one-month membership to Keith Martin’s site by signing up for The MuscleCar Place newsletter.) values. After looking at the selling prices of the cars, you may come to the conclusion that you need to look at a different make/model, or change your plans for how you will use the car.

In addition to the Keith Martin Collector Car Market, start taking note of all the prices listed in the Classifieds section of good online sites. Most car sales prices are consistent with what the market will bring (more or less), so you should at least be able to develop a trend.

* Payment method:

Now that you have the make/model, how you’re going to use the given car, and have a good idea of ​​how much it will cost you to buy the car, it’s time to put together your payment method. Do this BEFORE you settle on the car. Being prepared with information in this step is key to making a purchase that is fair to both you and the car owner, so do your homework ahead of time.

Most dealerships offer financing of some kind as a courtesy, but honestly, the best method of payment is the old fashioned way: cash. Buying a car with cash will help you do a couple of things:

1) It will allow you to negotiate the best possible price

2) It will protect you from (potentially) being upside down on a loan, and remove other risks as well.

If you’re buying a car for an investment, the car can really be considered part of your overall portfolio (just like real estate). Never withdraw a 401k early to buy a muscle car (or anything), instead use available cash or roll it over from other cash investments. Remember, while muscle car stocks have performed well over the past 10 years, investment growth is not a guarantee. Bill Paweski of Arizona Classics routinely advises his customers to keep the market in mind and be prepared to keep the car until the market is ready before even thinking about selling it (which is another good reason to buy with cash)!

Wrap:

Doing your homework in advance will save you a lot of pain later. Now is not the time to shorten the process. The last thing you want to happen is to end up hating the muscle car you bought, and if you follow the process outlined here, that won’t happen. Go for it!

In our next and final post in this series, we’ll discuss how to appraise your car, set up insurance, and shop.