How to determine the value of a "project"

[Greg L.]

With the economy still the way it is I seem to be seeing more and more project cars for sale, some with what I'd call reasonable asking prices and some with crazy asking prices. So how should one go about figuring out what these projects are worth, be it a Corvette or an old VW?

My approach would be this... Figure out what the car is worth in a restored condition and then work backwards from there factoring in the realistic costs of all parts and labor. In some cases you'll end up with a negative value and yes as we all know some cars aren't worth it even if they're free!

The big variable here would be the "parts and labor", especialy labor because that can vary immensely depending on what part of the country you live it not to mention how much of it you do yourself.

Anyways that's how I try to put a value on a project. Am I going about it the right way by taking the price of the restored car and then subtracting the costs to get it there or is there a more realistic way?

[Warren F.]

Re: How to determine the value of a "project"

No. I believe you're looking at it the proper way. It's what I would do as well.

[Paul J.]

Re: How to determine the value of a "project"

My approach would be this... Figure out what the car is worth in a restored condition and then work backwards from there factoring in the realistic costs of all parts and labor. In some cases you'll end up with a negative value and yes as we all know some cars aren't worth it even if they're free!

Anyways that's how I try to put a value on a project. Am I going about it the right way by taking the price of the restored car and then subtracting the costs to get it there or is there a more realistic way?

Greg:

This is a good way to get a general idea of what you want to pay for the car, not necessarily the value in the market. Of coarse, you know that the value that you end up with will almost always be negative. Especially if you factor in labor on things that you can do yourself. I usually only count the big ticket things, like paint, bodywork, interior, big parts like the motor, and restoration services for some of the other more complicated parts, etc.

Getting a good deal is great. But remember, it's a hobby and you should spend a little money on your hobby.

Paul

[Dick W.]

Re: How to determine the value of a "project"

I have finished a couple of project cars over the years. It seems that some of the most valuable parts seem to disappear when the projects change hands. It is very hard to verify if all the pieces are in the boxes. Caveat emptor

[Greg L.]

Re: How to determine the value of a "project"

Factoring in your labor is a good point Paul. My Dad always said that if I paid myself to restore my cars that I'd be better off to just go and buy one! Well he is right BUT, like you said it's our hobby. How many recreational golfers, fishermen, homebuilt aircraft builders factor in their time...right? I don't remember my Dad ever "paying himself" when he used to go curling all winter long.

But seriously IF we did factor in our time we'd most likely all be upside down in out projects when they were finished.

I guess the main pro of buying most projects is that you can get into the car you want for a much lower initial cost.

[Greg L.]

Re: How to determine the value of a "project"

I have finished a couple of project cars over the years. It seems that some of the most valuable parts seem to disappear when the projects change hands. It is very hard to verify if all the pieces are in the boxes. Caveat emptor

Very good point Dick. It's easy to see what's there. Not so easy to see what's NOT there.....

[Philip A.]

Re: How to determine the value of a "project"

Factoring in your time is a difficult measure. If you make more per hour than paying someone to do it for that time than you are better off working and having it done. If you make less per hour than paying someone to do it for that time than you are better of doing it yourself. But that is strictly monetary and does not factor in the DIY joy and satisfaction that comes with a labor of love.

[Jim D.]

Re: How to determine the value of a "project"

Since I do everything myelf, and my labor is free, I just add up the cost of the parts needed to complete the project.
As stated before, this is a hobby. If you're in it to make money, you're in the wrong business. You can compare it fishing as a hobby. The most expensive fish you'll ever pay for is the stuff you catch. If all you want is fish for dinner, go to the market and buy some. It's cheaper and faster.

[Stewart A.]

Re: How to determine the value of a "project"

All of the cars I see for sale if I'd worked backwards they would have to pay me to take it off there hands.
Jim is very correct get the long list of prices and start adding. Then add another 20% for things you don't see. You should get a very rough idea of the cost. I have never been able to work a restoration in a business method. I always go way, way over !! I spent 4 solid days in putting a new old spare shroud in my car. Sometimes you just get stuck and how can you add that in. Stewy

[Bob J.]

Re: How to determine the value of a "project"

All of the cars I see for sale if I'd worked backwards they would have to pay me to take it off there hands.
Jim is very correct get the long list of prices and start adding. Then add another 20% for things you don't see. You should get a very rough idea of the cost. I have never been able to work a restoration in a business method. I always go way, way over !! I spent 4 solid days in putting a new old spare shroud in my car. Sometimes you just get stuck and how can you add that in. Stewy

Good point !
I'd say equating future parts prices would be risky to estimate.
Whats reasonable today be be highly sought after tomorrow.Bob

[Alan S.]

Re: How to determine the value of a "project"

Hi Greg,
I've thought about this too.
I believe in the same way a person may UNDERESTIMATE the parts, materials, and labor cost, they may OVERESTIMATE what the car can actually be sold for when that day is at hand.
It's still fun to have an interesting project to work on.
Regards,
Alan

[Kenneth H.]

Re: How to determine the value of a "project"

It's a nice thought to try to estimate restoration costs and then make an offer accordingly. However, I think you'll have a hard time getting an owner of a collector car, regardless of condition, to sell what he or she considers a valuable asset, under those conditions. Remember, the seller always thinks that the collector car is more valuable than it actually might be.

[Ian G.]

Re: How to determine the value of a "project"

Something else to consider are the things that may have been completed incorrectly.. For instance my 59 project car I bought had fully reapholstered seats, but the bottom seat springs were the universal kind and don't have the proper sunken area in the middle.

[Pancho T.]

Re: How to determine the value of a "project"

I look it from a little different view.It would be really hard to look at a project car today and figure in a restoration then figure that total against what the car would sell for in todays market and come out with a positive number.I try and total all of value of the parts that are on the car.With the prices of some parts today the pieces are some time worth more than the sum of the car car.Some of these project cars are worth more in pieces than they are together

[Greg L.]

Re: How to determine the value of a "project"

That's a really good point too Pancho. In fact that's how I tend to look at basket case projects because at that point all you really are buying is boxes and boxes of parts.

I looked at a 60 "project"(which was really a basket case) last spring. The paint was done on an unhit body and it was sitting on a rolling frame but that was it. EVERYTHING else was apart and needing (including the frame) full restoration and scattered randomly all over his place in boxes and yes, baskets too! He said it was a 270hp car but nothing showed that except for what was left of the high rpm tach...everything else was wrong or missing and since there was no way to prove the tach was from that car, this car in my mind was worth the price of it's parts.