Life Insurance for your Car? Or At Least a Full Physical?

by | July 2015

Always know what you are buying. Don't buy a mystery.

Always know what you are buying. Don’t buy a mystery.

Chances are if you’re reading this, you have acquired a classic car or two, now or in the past. There is one crucially important step in this process and it is the one most often overlooked.

To put it simply you will win or lose when you buy a car not when you sell it.

You hear the term investment an awful lot now about classic cars, art, horses, and other real property. A very serious question to ask is: Who is your investment advisor? You certainly wouldn’t seek out someone who is behind bars for promulgating a Ponzi Scheme (at least, not now). Yet hundreds of people did trust such an individual for critical advice on substantial investments.

I know nothing about artwork, I know less about horses, and I certainly would never buy one or the other for an investment without seeking out an expert or two for advice. Yet many enthusiasts seem to have done just that. It is as though they bought the car without ever lifting the cover. We have been asked to “pick up the pieces” for many a brave soul who went out and “winged it” on their purchase of a collectible Porsche.

The best advice I can give is slow down right now! Actually… STOP! This is real money and you can lose a lot of it by getting in a hurry.

There really are only four places to buy a collector car: from a private party, a broker, a dealer, or an auction house. When acquiring such a vehicle, there are just two things beyond the vehicle you get to buy: a story and the records. The story on the car may be fact or may be mere folklore. But if it can’t be backed up, assume it’s a fairy tale.

Don't just lift the cover but lift all the hoods and have someone who understands what they are looking at crawl all over your potential purchase.

Don’t just lift the cover but lift all the hoods and have someone who understands what they are looking at crawl all over your potential purchase.

Classic cars are old and we all know as we get older we are not as sharp as we once were. Faulty or fading memory, slowing reflexes, and aches and pains become the norm. Cars don’t have health insurance so many people tend to forget to send them in for check-ups.

One question we always ask is when did you last have it serviced and who did it? Ever wonder why you have to get a physical examination before they give you life insurance? That’s simple, it’s to mitigate their risk. Yet many of us buy classic cars before looking at the medical records and physical results. We see a pretty picture, hear a romantic story, and hope swelling in our heart and head, we assume it must be true. Surely you have you heard of plastic surgery, braces, liposuction, gastric bypass, steroids…? The list is endless and people do the same thing to cars. That’s called anything from service and touch-ups, to full-on paint, upholstery, engine rebuilds, rust repairs, and total restorations.

You don’t go to a doctor or dentist without asking for recommendations and references. Even more so for surgery. Ask who did the work on the car you’re interested in, what is their experience, and where, when, and how can you take a peek at how it’s holding up.

The next step is act as if you are a life insurance company. Review its “health” records, that is, its maintenance history. Take it to an “outpatient” facility (a service shop) to get a physical. Then take it to a “dermatologist” (that would be a body shop) and ask them to check for signs of plastic surgery. We mean that literally – if it had body damage, is there Bondo on the car?

By doing this before you sign the purchase agreement, you are helping to insure the quality of your acquisition. And you are ensuring you have the longevity of a true investment and not a piece of a pyramid scheme or worse, a malignant cancer.

There is no 'life insurance" for cars, but through careful examinations you certainly can know what you're buying. Be sure it's neither folklore nor a fantasy.

There is no ‘life insurance” for cars, but through careful examinations you certainly can know what you’re buying. Be sure it’s neither folklore nor a fantasy.

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