The Price is Right? History of Used Mustang and Part Prices

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1 The Price is Right? History of Used Mustang and Part Prices Randy Jacobson, author For Sale: 1966 Shelby GT 350H, 4-speed. Sparkling black finish with gold stripes. Faultlessly straight body and perfect original interior. Goodyear radials. A truly beautiful looking and driving car. Drive anywhere. Asking $6500. Consider nice convertible in trade. Who wouldn t jump on this classified ad? It s too bad it was published in the October, 1979 edition of Mustang Times. Oh to have a way-back machine! How many of us have regretted not buying the car of our dreams because the price was a bit higher than we thought it was worth? Or, you did buy the Mustang of your dreams, but constantly worry that you might have paid too much? Are Mustangs good vehicles for investment purposes? These and other questions can now begin to be answered, as the complete (well, nearly so) 30 years of Mustang Times is now available on the Internet at The amount of information buried in these old magazines is astounding. Not only are the classified ads, but vendor paid advertising as well that can be used to track asking prices of various Mustangs and parts over the past 30 years. I examined every classified ad in the Mustang Times archives for what I believe are desirable Mustangs: 65/66 GT Mustangs, Shelbys, and Boss cars. I also tracked the price of 65/66 front fenders, as they consistently were featured in vendor ads. I own a 1966 GT Fastback, and was curious what the price history was prior to the purchase of my car in 1998 and whether I paid a fair price at the time of $10.5k. I did not track the price of Fox body cars for two basic reasons: the Mustang Club of America was solely devoted to first generation Mustangs until 1986 and the history of Fox body Mustangs isn t as long as the first generation Mustangs. I was also curious if the speculative bubble of the early 1990 s appeared in the data. I reviewed all published classified ads for the Mustangs in question, throwing out ads that did not have an asking price and those cars that were not at least in rolling condition with an intact drive-train. A caution to the reader is that these are the asking price and not the selling price; also, the range of condition varied from concours/thoroughbred to near basket-cases. I then averaged the prices over a calendar year and plotted the data as a function of time. I found the Consumer Price Index for urban wage earners for the time period in question, and baselined the earliest average price of the Mustang to the, and then extrapolated that value to the present. While compiling the data, I noticed that the number of classified ads dropped significantly around I believe this is due to two inter-related causes: the advent of the Internet for advertising collector vehicles to a larger audience, and the latency of publishing classified ads in Mustang Times, along with a limited audience. While MCA has on-line classified ads, they are not archived and thus not available for this study.

2 Figure 1 shows the price history of the 1965/66 GT Mustang, including fastbacks, coupes and convertibles. The solid line is the average price, and the dotted line is the Consumer Price Index, calibrated to the 1978 average price of $2,659. On average, the value of the GT Mustang has increased over the inflation rate by a factor of 279%. It appears that these Mustangs are increasing their value at a substantial rate above inflation. The minimum asking price of these Mustangs seems to track the index reasonably well, suggesting that there are still opportunities out there. So, to answer the original question I had about my 1966 GT Fastback: did I pay too much? The average asking price in 1998 was $16,210, far above the price I paid of $10,500. I ve invested nearly $30k in the car since, so the amount of total investment is far above the average current asking price. The 1965/66 s and 1967/68 Shelby s are a bit more problematic to track their price histories, as the number of these cars that were built were significantly lower than the GT Mustang. Figure 2 shows the 1965/66 Shelby data, average price (solid line) and the index. Two possible speculative bubbles appear in and possibly The data beyond 2000 are too few to make conclusions. However, except for the speculative bubble years, the price of these Shelbys is reasonably consistent with the index, a surprising result. Figure 3 shows the data for the `967/1968 Shelby GT 350 data, and speculative price bubbles appear circa 1990 and On average, the prices tend to rise at a rate of about double the inflation rate. The Shelby GT 500 data is shown in Figure 4. Again, a speculative bubble appears between 1990 and 1993, and a doubling of value over the inflation rate over a time span of two decades. The 1969/1970 Boss 302 Mustangs (Figure 5) don t show the speculative bubble in the 1990s, and the value rises less than 100% increase over the inflation rate. The 2000 price is biased by a single advertisement for $335,000 for the #16 Follmer 1969 team race car, a historic car. Surprisingly to me, the value of a Boss 302 from 1980 to 2000 is only slightly higher than the 65/66 GT Mustang, and that the Boss 302 cars from this time period were very affordable. The Boss 429 data is extremely sparse (Figure 6), particularly from and from 1995 onwards. Because there were so few of these Mustangs produced, that is not surprising. While most of these Mustangs tend to rise in value above inflation, it would be important to determine whether the price of parts for these vehicles keep track with inflation or increase at a rate than the Consumer Price Index. Figure 7 documents the advertised price of 1965/1966 Mustang front fender. From 1978 through 1986, only Ford and NOS fenders were available, and the prices rise from approximately $90 to $225 over this timeframe. A single ad in 2001 had a price of $600 for a NOS fender. I suspect that since the price of OEM fenders were increasing at a fairly rapid rate, that reproduction fenders became affordable to produce. Introductory prices were $120, and rose slowly below the inflation rate until the present to $135 -$160 each. In 2005, original Ford

3 tooling fenders became available at a cost of $360, roughly halfway between the cost of NOS and reproduction fenders. Most of the cost of reproduction and original tooling fenders is tied up in set-up costs, one would expect the price of these (and other) parts to rise at a slower rate than inflation. This also suggests that it is becoming more affordable to restore Mustangs: the price of the vehicles rise over time while the cost of parts remains nearly constant or slowly rises. Thus, restoration in the early 1980 s must have been prohibitively expensive due to the relative high cost of parts and the low asking price of Mustangs. The saving grace of restoring Mustangs back then was that parts were still available from Ford and the difficulty of using reproduction parts were not as prevalent as it is today. Finally, the price history of parts in general is expected to follow the trends in Figure 7: as NOS parts become more scarce, the prices rise until a manufacturer sees an opportunity to recoup the investment costs in developing a reproduction part. If there is sufficient demand for this part at a higher quality than what is available, other manufacturers offer better quality parts at a higher price point than the original reproduction. Does the data presented here suggest that every Mustang is going to increase in value over time? As my financial planner always tells me, the past trends of the stock market is no indication of the future, and that investments should always be considered long-term holdings. While the stock market, on average, increases in value over a time period of several years, it is not true for individual stocks nor on shorter time frames. A Mustang purchased as a near basket-case is not going to rise in value much beyond the inflation rate, whereas a concours/thoroughbred Mustang is likely to appreciate much faster than inflation. Are Mustangs a good investment value? Most of us involved in the Mustang hobby have our Mustangs not as investment opportunities, but as a hobby and costs are largely irrelevant. It is reassuring to see the value of our vehicles increase in value over time and that the price of repair and replacement parts are stable over time. This suggests to me that the present is the most affordable time to restore and maintain Mustangs. The Price Is Right!

4 1965/1966 GT Mustang $45,000 $35,000 Asking Price $30,000 $25,000 $15, /66 GT $10,000 $5,000

5 1965/66 Shelby $120,000 $100,000 Asking Price $80,000 $60,000 65/66 Shelby

6 1967/68 Shelby GT350 $80,000 $70,000 $60,000 Askiing Price $50,000 $30,000 67/68 Shelby $10,000

7 1967/68 Shelby GT 500 $120,000 $100,000 Asking Price $80,000 $60,000 Shelby GT500

8 $100,000 $80,000 Asking Price $60,000 Boss 302

9 $60,000 $50,000 Asking Price $30,000 Boss 429 $10,

10 1965/1966 Front Fender $700 $600 $500 Price $400 $300 65/66 Fender $200 $100