1.4: What is your “Comfort Price” for an Automobile?
Continuing the discussion about how much money you’re going to pay for your car collection, one thing that some of the owners that I interviewed brought up was the idea of a “comfort price” for a car. The “comfort price” is not the amount you’re willing to pay for a car, that would be your budget, but rather the amount you’re willing to spend on a car that you would subsequently drive on the street around other drivers and thusly exposed to the inherent risks of automobile ownership. Rocks, door dings, chips in the glass and paint, scratches, and accidents are all ultimately repairable thanks to insurance, but there is a psychological barrier that emerged during the interviews that you may want to consider.
Personally I have several cars that cost well over $100,000 USD, an awful lot to pay for a car by any reasonable measure, and at any given time I have owned at least one car that cost as much as a nice house in my neighborhood. Considered collectively my collection has been worth between $1,500,000 USD and just over $2,000,000 USD depending on what I currently owned … but I would never want to own a car that cost anywhere near $1,000,000 USD. Or, rather, of course I would want to own a car that cost over $1,000,000 USD … the Pagani Huyara comes to mind, as does the McLaren P1 … but I know myself well enough to realize that these cars exceed my comfort price for a car and so it’s unlikely I would ever actually buy one.
That sounds crazy, right? A Huyara or a P1 have proven to be more or less solid investments and by every measure would be incredible to drive and own, so given the necessary funds how could I possibly pass on purchasing one? Because deep down inside I know I would never be truly comfortable driving one on the streets of Portland, Oregon. I would worry constantly about other cars, small amounts of damage, and to be perfectly honest, the attention the car would attract, and so I am 99% sure that while I would love to own one of these cars … I would never be truly comfortable behind the wheel, and thusly my experience would be compromised. I’d worry about the cost of damage repair, I’d worry about every little rock chip or door ding, and I’m sure I’d worry about how much regular maintenance would cost as miles continued to add up.
Sounds lame, huh?
Now clearly “comfort price” is a function of how much money you have to spend collecting cars. If I had ten times as much to spend I have little doubt I would already own a Huyara, a P1, or both since I’m fairly sure that I would both have a somewhat different life and a different perspective on money. And if I had ten times less I am sure I would never have purchased several of the cars I own, again for the same reason — my comfort price would have shifted down. Especially when you factor in storage, insurance, and ongoing maintenance, the idea of comfort price begins to really make sense.
Comfort price also manifests in an interesting way if you’re lucky and find yourself owning a car that has increased dramatically in value. A good example here can be found with collectors who bought the 2005 Porsche Carrera GT long enough ago to have paid MSRP for the car (around $440,000 USD) or, even better, substantially less in the five years after the car was released when examples were sold for under $300,000 USD. In fact the highly prized Carrera GT didn’t really gain the attention of the collector market until 2015 when even good condition cars increased dramatically in value and the best examples were transacting for nearly $1,000,000 USD. So imagine if you paid $400,000 USD for the car and that amount was in your comfort price but suddenly the car was worth over $800,000 USD? Would you still be able to drive the car to the store and back? Would you still be willing to swing it down to your local Cars and Coffee and park it out in the open?
Maybe, but then again, maybe not.
While the Carrera GT is a somewhat extreme example, there are lots of similar cars at all different price points that when originally purchased were just “normal” cars, but due to the nuances of the used car market are suddenly worth dramatically more than their owners paid. When the value of a car suddenly shoots past one’s comfort price, owners are getting a new insurance valuation, likely taking even better care of the car, and possibly thinking twice before firing it up and going for a drive. I know I did when my $47,000 USD 1979 Porsche 930 was suddenly valued at $250,000 USD, but thankfully the value of the car settled back down and so while I still give a little more thought before I drive it, I still drive it, just as it needs to be.
I’m not sure I really have any specific guidance for you with respect to your comfort price for any automobile you’d buy; rather I wanted to make sure it was something you were thinking of as you progress along your journey as a car collector. Thinking about your own upper limit will help somewhat when you’re looking at cars and considering purchases, forcing you to be somewhat more pragmatic when it comes to deciding if you want to pay a premium for an absolutely perfect “concourse ready” car that you’re always going to second guess yourself before driving, or whether you’re really better off buying a somewhat less perfect example that can still be driven and enjoyed. Ultimately it’s up to you, but again, you have been warned.
The last thing we need to discuss … is the need for speed.
