Why buying a classic car isn’t as expensive as you think

In recent years, classic cars have become more popular, both as investments and as a touchstone to bygone eras. One look at the prices commanded through car auction experts such as Barrett-Jackson or Russo and Steele show buyer demand is continuing to drive prices higher.

Some of the most expensive classic cars have reached well into the millions of dollars, such as the 1963 Ferrari GTO that sold for a record-setting $53 million in 2013. While those numbers are out of reach for most people, don't let them scare you. It's still possible to buy a classic car without spending a fortune.

Part of the cost of a classic car depends upon how rare it is. In the case of the GTO, just 39 were ever made, making it one of the most sought-after and most expensive vintage collectible cars of all time.

Shopping for the right buy

If you're looking to buy a classic car, you can expect to pay much less than $53 million, but you'll still need to research the market thoroughly. Things that affect the price, in addition to how rare the vehicle is, include:

• Original equipment/condition: In classic cars, the more original, the better. This means seats, carpeting, gearshifts, pedals and other features should all be from the car's original manufacturer. Of course, the better the condition is of all these original components, the more valuable the car can be.
• Vehicle Mileage: Just as with any used car, lower mileage is better - but that's not necessarily the biggest factor in classic car pricing. A low-mileage car that hasn't been well cared for, or that doesn't have original equipment, may not be worth as much as one with higher mileage that meets the other two criteria.
• Car Color: Color affects the value of a classic car, particularly on muscle cars. The difference between a red muscle car and a brown one can be significant.
• Manufacturer: Certain brands demand more dollars, regardless of their era. Jaguar, Ferrari, Rolls Royce and Porsche are among the brands on which you can expect to spend more money. American-made classics that are among the most popular purchases are Pontiac Firebirds, Ford Mustangs and Chevrolet Corvettes.
• Age: In addition to all the factors above age plays a part in the value of any car. Typically, the older the car is, the higher the price is.

Finding the right classic car price

Want a classic car? Consider that a classic 1965 Mustang can be found for around $20,000, and many other collector cars are available in the $20,000 to $30,000 range.

Research current buyer’s guides - many of which you can find online - to ensure you know the going rates. Be sure you're working with current information and, when you've found one that appears to meet your criteria, always have the car professionally appraised. Just as you'd have a mechanic check out a used car before you buy from a private seller, having a certified appraiser evaluate your classic car will ensure that you're getting your investment money’s worth.

Counting the total classic car cost

Finally, before you make the transaction, factor in the other costs of owning a classic car. How much maintenance will it require, and do you have someone who can work on and has knowledge of your specific make and model? What will be the cost for registration, and does your state have any limitations on the use of cars registered as historic or antique? Does it need restoration work, and if so, how much will that cost?

Insuring your classic car will also be different than your standard auto insurance, and you'll want to work with a company that handles classic car insurance. Once you've factored in these different costs and determined that they fit in your budget, you’ll be on the road to owning your own classic car.