Cedar Rapids classic car dealer's business growing

Nostalgia making 'muscle cars' an alternative investment

George Ford
Published: February 22 2013 | 6:30 am - Updated: 28 March 2014 | 11:47 am in

Many baby boomers who remember the muscle cars they lusted after as teenagers now have the cash to satisfy that craving, and a Cedar Rapids business is benefiting.

DJ's Muscle and Memorabilia, 3815 16th Ave. SW, sells "drivable" classic muscle cars as well as automotive-related antiques.

"We typically sell cars in the range of $15,000 to $20,000," said DJ's owner, Dave Jones . "We buy and sell collector cars in good drivable condition. Other people sell what are called 'trailer queens' that are exhibited, but not driven.

"Many of our customers buy collector cars because they are looking for a place other than the stock market or bank CDs to invest some of their money. They have a little higher standard of living with more disposable income."

Baby boomers, Jones contended, "are not used to sitting on the sidelines, and this gives them an opportunity to enjoy part of their past."

So-called classic muscle cars were two-door American cars, built beginning in 1964, with back seats and high-horsepower engines.

"The muscle car era was short-lived because the government in 1970 mandated that the automakers lower the horsepower of the engines by 1972,"Jones said. "That is considered the end of the muscle-car era."

The Pontiac LeMans Tempest with the GTO high-performance option package is considered the first true muscle car. The Plymouth Barracuda Hemi convertible of 1970 (only 11 made) and 1971 (just 13 were produced) is the most expensive to acquire, at $2 million to $4 million.

Jason Jones, Dave's son and owner of DJ's Auto Sales, said documentation is key to determining whether a car has all the factory-installed original equipment, which enhances its value.

"A 'build sheet' had codes that specified everything from what engine was installed to any accessories," Jason said. "The sheet was usually hidden somewhere in the car by the last person on the assembly line.

"Sometimes it was glued to the cardboard liner behind the rear seat or hidden inside the headliner. With Corvettes, it was glued to the top of the gas tank, which was the last thing to be installed on the assembly line."

The original dealer order invoice also is a valuable piece of documentation. He said automakers also stamped engines and other parts with codes that indicated they were factory replacements.

"We have a 1969 Camaro with a 396-cubic-inch engine that is stamped 'CE' on the block," Dave added. "The CE was a factory replacement for the 396 engine that was blown while the car was still in the warranty period."

Data from Barrett-Jackson, a collector car auction company, shows a16 percent annual growth rate in the classic car market over the past 10 years a sharp contrast when compared with an average annual growth rate of 4.45 percent from the Dow Jones industrial average during the same period.

The Joneses point to recent collector car auctions in Phoenix, Ariz., and Kissimmee, Fla., to support their contention. A total of $305 million changed hands over a 14-day period, up 25 percent from the previous year.

"Last year in January and February, we only sold one collector car," Dave said. "This year, through the 11th of February, we sold six cars. We've also seen increased interest from overseas buyers.

"We have sold five cars to buyers in Europe, we shipped another to Australia , sold two to Canadian buyers and we recently arranged with a broker in California to ship a car to a customer in Japan. With the improving economy, people are starting to feel more comfortable."

 

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