Jeff Ford
July 1, 2002
Photos By: The Mustang Monthly Archives

Whether it's an investment of time, love, or money, the Pony in the garage is something we have all invested in. But is the Mustang a solid financial investment? Does the Mustang suffer from the same financial up and down woes as the stock market? Does it stay fairly flat and true or is it, as a "market," on a steady increase in profit for the seller? Should you approach that steed in the garage as a way to fiscal freedom or simply as a place to invest some quality time and hobby money?

This month we investigate these questions and look at what good "investment" Mustangs are, what the growth (or stagnation) of several vintage and late model Mustangs have been over the last few years, and what some of the financial nags are out there. We'll also look at the different versions of investment, from owning several cars of value to how using your Mustang as a daily driver can be an investment in and of itself.

Let's Get Real-Retirement
One, two, or even three Mustangs won't make for much of a retirement-certainly not Aruba or Tahiti. Even high-dollar Mustangs bringing thousands of dollars per car will net you very little income. For instance, let's say you have a '65 GT350, a '69 Mach 1 428CJ Ram Air, and a 6411/42 convertible all tucked away. Here is the value of these three Mustangs according to the CPI guide:

'65 GT350 Excellent condition $65,675
'69 Mach 1 428 {{{CJ}}} Ram Air $31,050
'64 1/2 {{{Convertible}}} $20,550
Total Profit $117,275

But what about restoration and initial purchase costs? At best, you can figure on paying $20,000 for the GT350, $10,000 for the Mach 1, and $5,000 for the convertible in fair condition (and these are very low estimates), needing restoration. You've immediately cut $35,000 off the top of your investment profits. Then there are the restoration costs which, when done correctly, can be staggering. A Shelby can still top out in the high teens (or more). The same can be said for the Mach and the convertible. Still, let's assume the best, and say your resto costs were minimal at $20,000 for the Shelby, $10,000 for the Mach 1, and $8,000 for the convertible. Below is what's left over. Even though there's still $40,257 in profit, you can see your cars are not the road to financial freedom. However, these three cars as part of a diversified portfolio would make some interesting pocket change.

Total Profit $117,275
Cost of cars:  
'65 GT350 $25,000
'69 Mach 1 428 CJ Ram Air $10,000
'64 1/2 Convertible $8,000
Restoration cost:
'65 GT350 Excellent condition $20,000
'69 Mach 1 428 CJ Ram Air $8,000
'64 1/2 Convertible $6,000
Total realized profit: $40,257

A Pro Speaks
We talked to an investment professional to get his take on what the average stock market investment can expect to yield. The stock market, over the last three years, has not been as strong as it was prior to that time. Still, the 100-year stock market average, according to our source, is still at a 10 percent return for investors, while government bonds, CDs and savings markets are returning 6 percent.

So from Mustang Monthly's point of view, the Mustang "market" could be a good place to invest some money-as long as you keep an eye on expenses. If you can make 10-15 percent profit, you are doing as well or better than the stock market. Keep in mind that we don't consider this a replacement for stocks, only a way to help improve your bottom line.

How They Have Done
CPI has kept track of collector car prices for the last 27 years, and have a wealth of pricing info on the Mustang market. Below are charts showing the various rates of increase or decline for five vintage cars we've picked.

The cars were chosen because they are among the most desirable of the breed. Most, with the exception of the '65 hardtop and '93 LX hatchback, are the cream of the price crop in the Mustang and Shelby sections of the CPI value guide as well as with the buying public.

What's The Best?
What is the best kind of investment? Well, after looking at everything else, we've concluded that the vintage car as a daily driver is one of the best ways to "invest." Its value does not nosedive as badly as a 2001 or 2002 Mustang, which can fluctuate wildly and mostly in a negative way within the first few months of ownership.

You're less likely to get "upside down" on a vintage car. A late model Mustang ('97 on up) can kill you financially if you want to unload it and get into another one. However, a vintage Mustang, if bought right and maintained, can bring in more cash than the initial investment.

Best & Worst Investment Mustangs
Early Cars
The very first Mustangs are a class by themselves. They've held their value better than most cars from the era. Although early production Ponies built between March 9 and the end of August 1964 can command slightly better prices than later '65 Mustangs, the whole of the '65 production has a good value-but not staggering.

The problem with the early-build cars is that the buyer has to be in the know on the peculiarities of these cars for the value to be there. Below are the best bets as we see them.

Convertible ('64 1/2, should be a V-8 convertible, preferably a 289)Fastback (early production, should be a V-8, August throughOctober 1964)

Shelbys
Although the whole of Shelby production is pretty hot, dollar-for-dollar, the '65 or '68 UR Shelby is the best investment car. Values on these have remained steady but climbing after the market fall in '92. That, of course, is a problem; since the values are up and these cars are rare, you won't get any great deals. You might not be making much money on the resale-but boy will the interim be fun! Below are some standout Shelbys.

'65 GT350 (best bet for holding its value)
'67 GT500/350 (if you're looking to sell at a big profit, do it now; Eleanor will fade away)
'68 GT500KR (like the '65, it's a high-in, high-out machine, cost-wise)
'69 GT500 (up and comer, prices keep going up)

"Muscle" Mustangs
Definitely the cream of the investment crop where Ford ponycars are concerned. The musclecars outperform most of the other types of cars and are, on the whole, well known. Even the latter-day muscle Mustangs like the Cobras (both Rs and regular) are seemingly holding onto their value better than the average family sedan. Early cars like the 428- and 429-powered Mach 1s seem to only increase in value. Obviously, the more rare the muscle, the higher the value. Witness prices on the '93 Cobra next to a '93 GT; the GT is almost half of what the Cobra will run you.

Mach 1s (428 CJ with Shaker "R code" or '71 429 SCJ)
Boss cars (especially the Boss 429)
GTs (289 Hi Po, 390 or 428)
Cobras ('93 or '93 and '95 Cobra R)

We've gone over this before, but in light of the story this month, we figured we'd attack it again. This time, though, we'll attack it from style groupings and makes.

Best & Worst Investment Mustangs
Bad Boys
Well, we have to bring it up: Mustangs that are nags as investments. This does not mean we feel they are worthless or any less a Mustang, but they don't make good investments because the return is not there.

Obviously, certain cars yield little return-mostly the low-performance ones. The mighty six-cylinder Mustang may have been the stalwart of the line in its day, but now it's not well received as an investment. Most of them don't bring near the money the V-8 does, and your restoration costs are almost the same.

As much as we hate to get hate mail, we have to admit that, outside of the King Cobra, the Mustang II is not a car to buy as an investment. Simply put, the buyers just aren't there. Even a fully restored (or unrestored clean original) has only topped out in the low teens.

This is true for four- and six-cylinder late models. There's no market for them to attain collector status.

Late-Model Crystal Ball
The value vehicles of the future will be the SVT products of today as well as the Saleens. Prices for these stallions of the Mustang line remain high-even recent releases. The prices on these cars may drop short-term, but you stand to keep more money in your pocket long-term (five to ten years).

The GT models will bring a modest return. The biggest problem in the GT market is that they're all very much the same cars. With the advent of the Ford package plans, the GT will never have as much chance for oddball orders like the vintage cars. Plus there is not much change in the cars from year to year-especially from 1987 to 1993.

Bottom Line
The bottom line is as it has always been-performance sells. The performance cars are what have always brought more money-even in the European markets. We venture to say that were Ferrari to have produced cars that were merely commuter cars, we wouldn't see the stupefying prices that some early models bring.

Should You Or Shouldn't You?
In the end, we can't really say you should buy any old or new car for an investment. The bottom line is that as a "market," they are stable, perhaps too stable. Prices, unlike the stock market, don't fluctuate enough for you to make quick gains. Gains are experienced if you're willing to do some things:

1. Let it go. If someone offers you the right money, sell. In the investment market, there's no room for sentimentality.

2. Hold onto the car, maintain it, and let it slowly accrue value.

3. Do as much of the restoration work as you can yourself. This can provide big gains as opposed to allowing a resto shop to do it.

In reality, though, the biggest gains are usually at the time of initial purchase. If you can come in under the average price of the model you're looking at, then you stand a chance at pocketing some real money-provided you don't buy someone else's trouble-but that's another story.