Do paper assets
have ‘real’ value?
Some would argue
that they only have
value when they are
cashed in and the
dollars are used to
buy something that
has value. After all,
the dollar has been
hitting new lows against
So where can dollars
be put to secure real value? Well, for some people it might well be a classic
car such as the 1950 – 54 Jaguar XK 120 Roadster.
And why is such a car a strong store of value? Hemmings Motor
News informs that the XK120’s value trend is as follows: In 1984 it
was valued at $18,500, in 1989 at $34,200, in 1994 at $35,300, in 1999
at $33,800, in 2003 at $44,000, and in 2009 at $72,500. So while the
value of paper assets got nailed and the value of the dollar fell, the Jaguar
XK120 Roadster went up up and away!
What makes the car so appealing? Jaguar built three generations of its
XK sportscar – the XK120, XK140, and the XK150. The more modern
XK 150 is the most refined and easiest XK to drive. However, this article
is about the XK120 and its solid store of real value.
Ten years ago, the XK150 in the Fixed Head Coupe (FHC), Drop Head
Coupe (DHC), or Open Two-Seater (OTS, aka Roadster) commanded a
premium of as much as 30 percent over the XK120. Such is no longer
true! And as a matter of fact, the average market value of the XK120
is about 10 percent above the latter mentioned XKs.
And why is this so? One Jaguar specialist who has been in the business
for 33 years says that buyers are realizing that with the XK120 they can
have the best of both worlds – beauty and drivability.
How does the XK120 arrive at the best of both worlds? Detractors from
the XK120 driving experience included drum brakes that make the car
difficult to stop on a dime. Recalculating-ball with lack of power
steering that make low speed steering a chore. Furthermore, a noisy
four-speed gearbox and lever-arm rear shock absorbers on the rear axel
that do not smooth out bumps like modern tube shocks.
All of the above driving annoyances can be changed on the XK120
as four-wheel disc brakes are available, as are power rack and pinion
steering, tube shocks plus a modern fully synchronized five-speed
Now it’s possible to have a beautiful looking XK120 that is highly
desirable to drive. This has increased the appeal (and the price)
of the XK120 among younger buyers.
Now make no mistake, XK120s that are especially rare or historic
such as the first alloy-bodied XK120s should be fully maintained
in their original specification. Anything else will lower the price!
Of note is that as a collector car, the XK120 is a blue chip with its
timeless styling, twin-cam six-cylinder engine and stellar competition
history. And remember, at one time this was the fastest production car
in the world.
Just over 7,600 XK120 Roadsters were built and they regularly come
up at auctions. This helps to establish fairly stable market values.
Hemmings Motor News states that out of 10 Jaguar XK120 Roadsters
sold at auction during the past five years, 6 sold for between $74,250
and $82,500, with two exceptional XK120s selling into six figures.
And for typical driving XK120s, expect to pay in the mid $40,000
range. Restoration XK120s start at about $20,000.
So with bank CD rates at about 1.5 percent and other assets
represented by paper, you have the option of considering what a
classic like the Jaguar XK120 will do for the long run return of
your portfolio. Driving the car is just an added interest payment –
a payment you can indeed count on!
Have an auto question or comment? You can email it to me at
[email protected] Kyle Busch is the author of “Drive the Best
for the Price…” www.DriveTheBestBook.com.