Prices and Valuation

[spork2367]

After this topic has come up in several of the for sale threads, I wanted to start a thread devoted to the topic. All opinions are welcome, lets try to keep the animosity and personal feelings out of the thread.

To start off, the fact remains that there likely isn't a first owner out there who will live long enough to even see a 75% return on their investment. With the number of low mileage cars for sale right now, the reality seems to be hitting many second and third owners that they may not see their original investments back either. I can't speak for all those selling their cars, but for the ones staying in the Corvette market, they seem to be buying lightly used C5s and C6s. Likely due to the relatively low costs and cheap and plentiful replacement part and service costs. I know there are lots of comparisons to BMWs, Ferraris, etc. of the same vintage and how astronomical some of their maintenance costs are as a justification to how cost effective ZR1s are, but the fact remains that these are Corvettes, not Ferraris or BMWs. Compared to other Corvettes (C3s, base C4s, C5s, and C6s) the costs of maintaining a ZR1 are relative high.

The era in which these cars were built is a slim market when it comes to collectability regardless. With Porsche 911s and supercars being the exception. Even some earlier cars like the Ferrari 308s have only recently come into the realm of collectability, doubling in price.

The C4 is one of the least liked and least iconic Corvette body styles. While the ZR1 is FAR better looking than the base C4, the average person wouldn't notice the difference. On top of that, the majority of ZR1s are the same damn color, which doesn't help. Even the nicest big block C3s are struggling to break the high 40k mark (L88s being the exception). C5s, C6s, and C7s will likely never be collectible. By the time they are old enough, the electronics will be incredibly fragile and obsolete. My father has a 2004 Lemans Commemorative Edition with 4000 miles on it. He has already accepted that it's just a really nice low mileage driver. The ZR1 not only suffers from the same issue of being electronically complex, but their were even fewer parts made.

Parts are a bit difficult to find, and often expensive. This is compared to the overwhelming majority of other Corvettes. Look at the costs for ECUs and DIS modules recently. Someone could easily buy a car with less than 10k miles and have to immediately drop 2-3k into it to make it reliable with injectors, fuel pumps, coils, vacuum hoses/actuators...etc.

Someone noted in the other thread that Hagerty had ZR1s trending up. That was incorrect. Below are some graphs that pretty much spell out where the ZR1 is and where it is headed as far as valuation is concerned.

The first is just the 3 year trend.

The second is the 10 year trend.

The third is the 10 year with the DJIA and NASDAQ overlayed. The dotted line is the DJIA the solid line is the NASDAQ.



This trending pretty much shows that the car hasn't really appreciated at all in the last 10 years. You can see that it's lost value compared to the market index.

Does that change how I feel about the car? Nope. 3 years ago or so I bought a 1990 ZR1 on a salvage title from a Corvette wrecking yard. I've bought all the parts to fix it, acquired the original wheels from the owner (which he graciously gave me), and stocked up on a few spare parts. When I'm done fixing it, not counting my labor, the car will be worth approximately 3-4k less than what I'll have invested in it. Why did I do it? Because I love the car and that's what I could afford at the time. At this point, the car is worth more in parts than it is as a complete car.

In my opinion, this car will never appreciate beyond what it gains due to inflation. Parts availability, mechanics willing to work on them, electronics, etc. will scare off most buyers and I don't think the market will ever really get started. A lot of cars from that era will suffer the same fate. to the people who hold onto them and keep them running despite their costs.