Alternate investment - the soon to be classic Benz - Mercedes-Benz Forum

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post #1 of 3 (permalink) Old 08-07-2011, 12:25 AM Thread Starter
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Alternate investment - the soon to be classic Benz

What with the stock market turning to complete manure lately, I thought it would be interesting to explore an alternate investment, the Benz that isn't quite a classic but will be within the next ten years.

This isn't without risk, if the economy stagnates so will classic car values, but at least if value goes TU, you have a nice car to drive instead of a bunch of worthless certificates. You should be able to perform most repairs and restoration yourself, paying someone else will kill any potential return on investment. Unlike stocks, buying and selling involves effort. But, they also have a fun dividend that stocks don't pay.

So the question to one and all is - what Benz can one pick up today relatively cheaply, that can be sold in ten years for at least a 10% annual return on investment after factoring in insurance costs? What Benz is 'too cheap'? Here's a few I came up with, and a couple to watch out for. My future values are guesses, but educated guesses, based on historical perspective of similar but older vehicles.

W107, the 380/450/500 SL of the 1970's and 1980's.

Why it will be valuable: It's an iconic vehicle, this was the car to be seen in, in the 70's and 80's.

Current prices: For a clean one, $5k-8k.

Value in ten years: $20k-25k, maybe. Bonus if the W107 was owned by a famous person. A later model but a good example: Kenneth Lay's (of Enron notoriety) SL600 went through ebay not too long ago, and didn't bring all that much.

Possible issues: Prices have just about bottomed out on the W107, but they don't appear to be climbing, at least as of the last two or three years. A lot of W107's were sold, though they are being scrapped at a record pace lately. The W107 will rise in value, it's more a matter of when... sadly, when enough get scrapped.

Fun dividend: Very sweet ride. Not really known for their agility, but it's a 2 door convertible with a weatherproof hardtop and 'old Benz' solid construction.

W201 16v, the 190 Cosworth. Full disclosure: I found one of these in a barn last January non running, and brought it back to life, so I may be a bit biased.

Why it will be valuable: it was probably the first factory modified sport sedan, the E30 M3 followed three years later. And the original E30 M3 has already achieved collector status, clean ones go for over $20k.

Current prices: for a clean one, $5k-8k.

Value in ten years: Probably $20k-30k, they're quite rare. Bonus if it's a gray market with most of the Euro gear reinstalled.

Possible issues: The 16v has always lived in the shadow of the M3, a bit heavier, a bit slower, and quite a bit more expensive when new. Because it isn't as well known as the M3, it won't rise in price as quickly, or as much.

Fun dividend: it's a very agile vehicle, a delight to toss down a twisty road. The Cosworth engine has a nice growl to it, and they're fairly easy and inexpensive to maintain.

600 Grosser. Consider this the blue chip investment, not cheap to get, not cheap to own, but you will make money on this one, if you can afford to get it and keep it.

Why it will be valuable: Another iconic vehicle, for a different reason. The 600 was the vehicle of choice for heads of state, especially notorious heads of state. There aren't many totalitarian despots in the last 30 years who didn't own a 600. Idi Amin, Nicolau Ceaucescu, Leonid Brezhnev, Pol Pot, Mao...

Current prices: $30k-40k.

In ten years: $100k+ No bonus if it was owned by a very wealthy or famous person, all of them were owned by very wealthy or famous people.

Possible issues: the 600 is horridly expensive to maintain, especially if bought in less than excellent condition. The hydraulic suspension in particular is maintenance intensive.

Fun dividend: This is a vehicle fit for a dictator! Not a particularly spirited drive, but who wouldn't want to idly daydream about being a head of state while rolling around in this beauty. And if someone cuts you off in traffic, you can always send one of your death squads after them.

A couple to watch out for:

AMG Hammer. An iconic vehicle, the first super sedan, and the vehicle that launched AMG on the road to prominence.

Why to be wary of it: Hammer prices are still very high: $30k+. It's a terrific ride, but performance is no longer contemporary and that price just seems rather high, may still be in a state of depreciation. Eventually, an original Hammer will command increasingly high prices, but I'm not sure it will happen within ten years. Great vehicle, dubious investment.

280 SEL 6.3. The 600's little brother, it's 300hp engine stuffed into a regular sedan. A hoot to drive, too. It's later brother, the 450SEL 6.9, also merits caution as an investment, as it was an attempt to recreate the 6.3, but didn't really have the performance boost that made the 6.3 so much fun.

Why to be wary of it: It was supposed to be a classic, 20 years ago. Yet values in the last ten years have languished, in the $12k-15k range. The 6.3 had many of the ingredients of a bonafide classic, but the value just never has seemed to kick in. And like it's big brother, the 600, a 6.3 is expensive to maintain.

So, any other soon to be classics out there? It's at least fun to think about, a lot more fun than agonizing over a stock market that's proving to be very volatile.
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post #2 of 3 (permalink) Old 08-07-2011, 07:36 PM
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In general, four door sedan Mercedes do not appreciate in value over any reasonable amount of time; however the roadsters do tend to see upticks after 30 years. The 500E has a potential to break the sedan statistic due to the limited production and Porsche tie-in, much like the Cosworth head 2.3-16.
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post #3 of 3 (permalink) Old 08-08-2011, 02:21 PM
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There haven't been any "investment quality" Mercedes since the 1960s and that's unlikely to change.

And, you ain't gonna find one for $5K--the market's too smart for that.

Kent Christensen
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