Hello from Sacramento! & first question on value?

[vschmidt]

Hi all,

I'm an engineer in the Sacramento area and have happy to have found these forums, as I've got about a million questions looking to decide to pull the trigger on a MK4 kit.

I realize this is my introduction post, but wanted to ask the #1 question in my mind:

? What's the value proposition for a MK4 ?

Trying to look at the big picture financially, and I'm perfectly willing to write off some of the cost as the price of the entire experience, as my kids are interested in doing this as well - and experiencing a build with them as my shop buddies is, well, priceless.

That said, it can't be a "money is no object" type of thing for me. I have to consider multiple college tuitions down the road, and other life goals as well. What concerns me the most is some of the for-sale posts that are along the line of "Over $80k invested, but selling for $50k" - which seems to be a significant chunk of money that is unrecoverable. (Well, my build would have to be much more conservative to begin with).

But yeah - that's my main question right now: Is it possible to build a MK4 'smart' to where it could be sold down the road if needed and recover a good bit of the cost, or even turn a profit?

The other option would be to buy a classic muscle car (Ford Mustangs have been my favorite since I was a kiddo) and just do more 'tinkering' than building - but at least in that scenario, I have a good idea it should hold value over a decade or so.

Thanks for your insights!

[Presto51]

Welcome to the funhouse

MHO is that if budget is king and wanted to hold money spent to as small possible, make a solid build plan and stick to it with all of your might. I see a lot of builders go into the weeds when they are seduced by the next bright, new, got to have shiny object/part. Yes that stuff looks nice, but maybe get it after the initial build is done.

Build Plan Example: Get the MK4 complete kit, select a powertrain either used or new, but stay away from the high HP ones, (these car are fun no mater how many ponies is under the hood). More power more money.

Shop sales. Know what you want and wait if it's possible for items to come in at a good price.

So that is the cliff notes version: Make a plan, cost it out, and once committed to it don't deviate .

These are fun builds, and enjoy to the journey

Ron

[edwardb]

This subject is discussed quite a bit. Short answer to your question, for a new build it will depreciate. How much depends on a bunch of factors. But buying a new kit and even "reasonable" parts to finish likely cannot be sold for what you have in it. And that's without valuing your labor. The value proposition is the enjoyment in building, satisfaction in driving something you built, making it a family project like you describe, and an all around really fun and rewarding hobby with a great bunch of fellow enthusiasts. That doesn't come for free. Just like every other hobby. Your daily driver starts depreciating the day you drive it off the car lot. These are no different.

Now having said that, there's a great deal of variation. A clean, well built car with the right (e.g. most popular) options will always get the best return. One of the things that drives Factory Five values down a little lower than other brands is the variability in builds. Some are top notch. As good as any brand out there. Maybe better. Others, well... not so much. Everyone is affected by that to some degree. You have it in your control to stay on the better side of that. Same thing goes with how the car is configured, powered, etc. Tried and true engine selection, transmission, rear suspension, brakes, etc. are important. Keep it a relatively popular color. Some guys get real individual with their colors and/or combinations. Look unique (I guess) but won't be popular when they try to sell. Many say they'll never sell. But that's a little hard to predict and doesn't make sense (my opinion...) to ignore that possibility.

I've been kicking around this hobby for nearly 12 years now. Not a lifetime, but enough to see a bunch come and go. While there are a lot of Cobra replicas out there, my observation is they hold their resale value better than many other hobby cars. I routinely see restomods of every kind being offered and sold for a much smaller fraction of their original cost than these cars. Even among the Factory Five offerings, my observation is the Cobra replica probably has the best resale value percentage. The Coupe might be close. But others (Hot Rod, 818, etc.) don't seem to hold their value as well.

One final comment. Another option I've used a couple times is buying an uncompleted kit. They come up on here and elsewhere occasionally. Typically sell for less than the purchase price, so someone else has to take at least part of the depreciation hit. The selection is somewhat limited, and depending on your state may be a barrier for the title process.

Much more could be said (and probably will) but those are some thoughts from my side.

[narly1]

I read somewhere once that the final sale price of custom car depends to an extent on what the prospective buyer doesn't like or want about the car. In other words fair price less what it will cost the new buyer to personalize it to their tastes/needs.

This speaks to the idea of sticking with the most popular options, etc.

Build for resale down the road, build for what you want, or maybe build for somewhere in between?

It's your choice, and a question you have to answer and be happy with for yourself.

[vschmidt]

This speaks to the idea of sticking with the most popular options, etc.

That's a good way to frame it - I probably should take an informal survey of the forums and compile what folks have built. Going into it, I understand it's an expense, not an investment - but want to make sure the expense is smartly managed to recoup what I can when that day comes.

[vschmidt]

Thanks Presto,

One thing I very much appreciate is finding these forums and realizing the community that is out there - that is huge selling point!

[vschmidt]

Tried and true engine selection, transmission, rear suspension, brakes, etc. are important. Keep it a relatively popular color.


Thanks for the insight - good to hear from a voice of experience!

[Al_C]

This is an interesting question, and takes on a different perspective that other questions that deal with cost/benefit. When I think of value proposition, I think in terms of rate of return, and other financial measures. I'd say the value proposition is much the same as it would be for a boat, a camper, hunting/fishing lodge, etc. It gets more into the "want" area where you're dealing with discretionary funds. I think if you look at a MK IV as an investment vehicle you're probably going to be disappointed. I understand the whole decision process given that you're looking at college tuition and more. I didn't build until college, weddings, and mortgage payments were in the past. It's more about deciding what the experience is worth in time and money and how it will build / strengthen family bonds. Just my 2 cents.