Hot Rod Budgeting Part I

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by Huw Evans  More from Author

Part I: Turnkey Hot Rods.

Whichever way you look at it, playing with cars costs money. Of course, the amount of money we spend on our hobby varies greatly, and, although some hot rods and custom cars can cost more than six figures to build or buy, there’s still room for just about everybody. However, in order to really enjoy it, it pays to plan realistically from a financial perspective.

This month, we take a look how to budget for a completed hot rod, as well as some overall do’s and don’ts in the budgeting process. In next month’s issue, we’ll tackle the subject of project cars.

It can often be harder to sell a finished hot rod built to personal tastes, but the last recession has seen plenty of cars come up for sale. When times get tough, items such as hobby cars are often the first to go, and savvy buyers in today’s market have been able to scoop up some incredible deals on collectible and special interest vehicles, often for a fraction of what they would have sold for five or six years ago.

Although it remains more of a buyer’s market today, you still need to thoroughly plan how much money you’re willing to invest in your next project and take a good look at the going rates for parts, services or even complete cars before you commit.

Buying a Complete Car

For many of us, the thrill is in the build of the car itself, and doing the work and learning new techniques along the way can be immensely satisfying. However, you can often buy a complete, turnkey rod or custom for less than the money invested in actually building it. Scan the classifieds of a publication like this one and you’ll see plenty of ads with cars going for $50,000-60,000 with more than $120,000 invested in building them.

The thing to remember is that rods and customs are very much individual forms of automotive expression, and taste varies. If you find a complete car for sale and you’re happy with it, fantastic. But chances are, because you’re into rods, you’ll be wanting to change something the moment you get the car home (we can rarely, if ever, leave well alone – even some famous hot rods have gone through multiple different configurations during the course of their lives).

Perhaps to an even greater extent than buying a regular classic car or truck, built rods or customs require extra scrutiny before you buy. If you’re new to the hobby, take somebody along with you who’s knowledgeable about rods and customs, as they can be more objective. You’ll want to make sure good quality parts and/or workmanship have been used during the build, and make sure you take the vehicle for a test drive to see how it behaves. Ask the seller for receipts on parts and, if work was entrusted to professionals, which shops handled the work, and call them to verify.

You’ll also want to check the vehicle’s title and registration documents. Because of the nature of hot rods and customs, laws vary from state to state, and if you’re buying a car in one state and live in another, you need to check with the Department of Motor Vehicles in your home state regarding the requirements for registering a hot rod or “specialty” vehicle. You can check on your state Department of Motor Vehicles website or contact the Specialty Equipment Market Association (SEMA) to find out the laws applicable to your state or province. If you don’t, you might end up with a car you can’t legally drive without major modifications because of the titling laws in your particular state.

Taxes and Insurance

When you buy a specialty vehicle like a hot rod or custom, you’ll need to pay taxes when you license it for road use, and you’ll also need insurance. Most general insurance companies won’t touch home built vehicles or “kit cars,” so your best bet is searching for a broker who specializes in antique and modified cars, such as American Collector’s Insurance, Grundy Worldwide, Haggerty or Heacock. Many of these companies will have specific guidelines when it comes to insuring your hot rod, which often include restricting use of the vehicle to “pleasure” or hobby activities, proof of ownership of a daily driven vehicle, secure parking and an appraisal of each vehicle insured (see sidebar).

While purchasing an already-completed hot rod has fewer potential pitfalls than taking on an extensive project, be sure you do your homework first, or you could end up with some unexpected headaches. Stay tuned for next month, when we take on project cars.

Financial Dos and Don’ts



Although some of us may yearn for the golden age of hot rodding, one thing modern society has given us is special interest vehicle insurance. These policies are designed specifically for hobby vehicles, often providing great liability coverage, low deductibles and affordable premiums. But one of the best things about them concerns appraisals. As most cars age, they depreciate in value and as far as most general insurance companies go, the older the vehicle, the less it’s perceived to be worth. So, let’s say you have a 1964 Chevy custom that you’ve spent many years working on. One day you’re out driving it and you’re hit by a teenager piloting their mom’s late-model Toyota Camry.

If your Chevy hasn’t been appraised, chances are it will be written off by the insurance adjuster, regardless of the time or money you’ve spent on it. The Camry, meanwhile, can be taken to the nearest collision center and fixed, because according to the insurance company, it has a greater book value. Now, if you’d insured that same Chevy with a firm specializing in collector car insurance, it would have been professionally appraised. Let’s say the car was valued at $35,000. Then, should something happen to it (heaven forbid), that’s the amount you’ll get back from your insurance company in the event of an accident. Appraisals are great because they take into account the age of the vehicle, its condition, features and desirability. Most collector car insurance brokers also stipulate that you get the car re-valued at least every five years or whenever you make changes or improvements to the vehicle. Although many hot rods and customs are basically irreplaceable, it’s good to know you can recoup at least some of the costs invested in the vehicle should anything happen to it. Most collector car insurance firms will also have a list of recommended appraisers.

Finance through a Reputable Institution

From this author’s personal experience, the best way to buy hobby cars is always with cash, if you can. However, if you do decide to finance, the best place to do so is through a reputable institution such as a major bank. When looking at vehicle loans, shop around to find the most competitive interest rates and terms (if you can, you should borrow the money for the shortest period possible, since less interest will accumulate, and it will be easier to pay back). Loans that offer deferred payment plans or lower monthly payments tend to work out to be a lot more expensive in the long run. Avoid financing through used car dealers or other third parties, especially if they claim to offer credit to just about anybody.


Buy Hot Rods for Profit

Never by a hot rod or custom purely as an investment. Yes, there are some lucky individuals for whom everything they touch seemingly turns to gold. They’re able to buy special interest cars, including modified ones and hot rods, and then sell them at a profit. However it’s very difficult to do, since the market is constantly fluctuating and you can only sell a car depending on how much a buyer is willing to offer for it. Most people are in this hobby purely for the cars, the camaraderie and lifestyle. They know that they’re unlikely to ever make their money back on most hot rods and customs, and that’s just fine. Stick with that attitude and you’ll be much happier in the long run, and if you do happen to sell your car for more than you paid for or invested in it, consider it a bonus.

Change your Mind During the Build Process

Especially if professionals will be handling a large part of your project build, you’ll need to choose a plan and stick to it. Every time you make a change during the build process, e.g., you want a Cadillac engine instead of a Ford V-8, or you want a four-inch chop instead of a two-inch one, or you now want to use a Corvette front clip instead of the stock rails, it will cost more money and can make life frustrating for both you and the shop. Some professional hot rod builders we’ve talked to say changes like this are one of the quickest ways for owners to lose interest in the project and run out of money, so stick to a plan, get the car built, drive it and if you want to change it, you can do so at a later date.

Useful Sources

American Collector’s Insurance

American Speed Company

Brookville Roadster


Ford Racing Performance Parts

GM Performance Parts

Grundy Worldwide

Haggerty Insurance

Heacock Classic Insurance

Last Refuge Hot Rods



Ohio Technical College


1-Day Paint and Body

Universal Technical Institute

We’ve seen many hot rod projects that ran out of steam due to insufficient funds. However, even if your budget is very limited, there’s no reason why you can’t get things finished, provided you craft out a detailed financial plan.

If you’d rather buy a completed hot rod or custom than build your own project, this is one way to save money, since many cars like this are sold for less than what was invested into building them. Some popular cars, like 1955 Chevrolets, are always in high demand, and mild customs like this one tend to hold their value.

Choosing the right engine to power your hot rod or custom is a major financial consideration. Even today, vintage Ford Flathead V-8s are still a popular choice among “traditional” hot rodders and still relatively affordable.

If you’re buying a used engine, even something like a garden variety 350 Chevy or 302 Ford V-8, you should at least budget for a rebuild. Most used engines will likely be suffering some neglect, so a teardown, inspection and a re-build is often the best way to go. These can cost anywhere from around $1500 to more than $10,000, depending on the engine and parts.

Know your limitations, both from a financial perspective and regarding your skill level. This 1933 steel-bodied Ford was ultimately fitted with a late-model Mustang Cobra engine, which required considerable modification to the frame rails, front fenders and hood in order to get it to fit. By the time it was completed, the owner had invested almost $200,000 in the car.

Here’s a picture of the modified front frame rail. The car also used a fully independent suspension system, which added cost to the build.

At the other end of the scale, this was one of the most “traditional” style early Ford hot rods we’ve come across recently. It still sported the original style transverse buggy leaf springs, both front and rear. However, although simple and relatively cheap, such a design at the rear severely limits wheel and tire choice.

Traditional style hot rods have enjoyed renewed interest in recent years, and in many cases, simplicity is the key. That said, the very best ones still require quality parts, and on this 1932 Ford, the hand wrapped leather steering wheel, engine-turned instrument panel and drilled pedals can quickly add to the cost of an interior build or refurbishment, so price them out along with any labor as part of your overall financial plan.

On some mild customs, like this 1953 Meteor, it’s not unusual to find original factory headliners. Many will need replacing, which can be tricky and time consuming. A good trim specialist will be able to install a replacement, but again it will cost money, so if it’s on your list, get quotes for the work and materials before diving in.

As they say, “One man’s junk is another man’s treasure,” and the beauty about hot rods and custom cars is that there’s a budget for just about everybody. Whether finding a finished car or a foundation for a project, cars like this 1959 Edsel still offer a lot of metal for the money. We’ve found solid, running examples for well under $5,000. Try getting the same for a comparable condition 1949-51 Mercury or 1955-57 Chevy!

With your hot rod completed, thanks to a managed budget, it can be immensely satisfying to eye up the finished result, whether it happens to be a patina covered 1949 Ford F-1 pickup…

Or an award winning, custom built 1934 Ford coupe. It’s also far better to have the completed car take pride of place in your garage than having to offload or part out your unfinished project because you overstretched yourself financially and ran out of money before it could be finished.


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