Hidden Potential
Sometimes, when I need a break from the classic car business, I enjoy watching TV shows about… old houses. Watching such shows, though, often just reminds me of the classic car business, and the parallels between the two.
With classic cars and old houses, there can be rewards and pitfalls. Most of us prefer to focus on the rewards, which, in both cases, can be the enjoyment of ownership or financial gain (perhaps not the latter in houses right now!) TV shows, whether about old cars or old houses, tend to skim over the pitfalls.
Here’s a great example: If you watch the HGTV cable network, you may have seen a show called Hidden Potential. The premise seems interesting: a realtor shows first-time home buyers three houses, all in need of major renovation. The show reveals the buyer’s purchase price range and their “fix up” budget.
Visiting each house with them is a hot-shot architect, who whips out his laptop and shows them what the house could look like with, say, $75,000 in renovations. Redo the kitchens and the bathrooms? Sure, and why don’t we add a new floor and relocate the staircase while we’re at it. Presto! It all appears on the computer screen and magically comes in $100 under the budget.
When I watch this TV show, I often feel like shouting out, “Hey, what about the roof and other fundamentals, which could easily eat up half of a homebuyer’s renovation budget, and without making a visible difference to the house?”
It’s a similar case with classic cars, even those engineered as well as a Mercedes-Benz. Time and neglect take their toll, and the full picture is often unseen until you start disassembly. At the Mercedes-Benz Classic Center—and I’m sure at other restoration shops, too—we deal with customers’ expectations all the time. Sometimes, expectations can be unrealistic.
We counsel customers to avoid getting in over their heads. Take, for example, a customer who has purchased a desirable 1960s model with “hidden potential” for $15,000 and thinks he’s being generous to budget another $15,000 or $20,000 for restoration work.
As with a “classic” home, addressing only the car’s fundamentals can eat up that budget quickly and demand more. Labor hours and labor hours, whether you’re restoring a Mercedes or a Mustang. I don’t have a magic laptop computer that shows how $20,000 can restore a car from bumper to bumper. Sometimes, we just have to let people down gently.
The parallel with homes crops up again in the question, “Is it worth doing?” For some, sentimental value trumps all else, and I’m totally empathetic to that point of view. We certainly understand the relationship between people and their cars. Depending on the model, though, we ask the customer to weigh the pros and cons of restoring the Mercedes-Benz they have versus having us locate a better version, something that needs less work and may cost less overall.
We follow our own advice for Classic Center acquisitions, including a 600 we recently considered. Who can resist a 600? Just being around one of those magnificent cars never fails to astonish me. The design, the technology, and the luxury were all far ahead of their time. This landmark model came out in 1964, which means it was on the drawing board in the late 1950’s. And it was still an advanced model when it went out of production in 1981.
Like a Victorian mansion, a 600 is probably not the best project for a first-time buyer. AS you may know, the 600 not only had air suspension, but ran all of its power assists hydraulically—the windows, seats, even the fresh air ventilation flap! The vast hydraulic circulatory system often needs attention. A window switch, for example, seemingly a simply device, is anything but and given the low production numbers for the 600, replacement cost for this unique part can surprise many! Understandably, Mercedes did not embrace hydraulics for other models.
Done professionally and correctly, a 600 is a treasure, a real piece of Mercedes-Benz history. But we’ve seen 600s that have been “restored” by DIY-ers and amateurs trying to exploit the “hidden potential.” The result can be a sad sight once you look beneath the surface. The same applies to other models, of course, but perhaps with less financial risk than a 600 could present.
At the Classic Center, our goal is to make a viable business case for every classic M-B purchase. An individual owner, on the other hand, might not be as concerned about return on investment. Financial gain may be the farthest thing from their mind, and that can be a wonderfully freeing feeling.
Whether you’re buying an old home to renovate or considering a classic Mercedes-Benz for restoration, don’t be swayed by the “magic” on TV shows. Instead, measure your expectations against an old-fashioned reality meter and you’ll have a good shot at finding true hidden potential.
Excerpted from The Star, Jan/Feb 2009
Author: Mike Hunz
