Classic cars: Small difference between maintenance and restoration can be significant

How many times have you seen a car advertised as “fully restored,” with the list of “restoration work” encompassing new paint, new interior, rebuilt engine and transmission, new clutch, new front end, new suspension, new fuel system, and new brake system? The list goes on and on.

One could certainly make the argument that all of these items are legitimately included in any comprehensive restoration, and one would be correct…unless one were getting divorced, and the attorney for ones spouse cries foul, claiming that this is “routine maintenance.” You might wonder, “Why would this matter?”

I’m not an attorney, and I’ve never played one on TV, but I’ve prepared enough appraisals for attorneys and spent enough time in court to tell you why.

Let’s say that Brenda and Eddie got married in 1975. Brenda owned a 1973 Toyota, and Eddie owned a 1970 Corvette LT-1 convertible. It was just a used car that was worth about $3,000. As their family grew and their vehicular needs changed, the Corvette was parked outside under a cover, and a progression of sedans, minivans, and SUVs occupied the garage.

Somewhere round 2000, after 25 years of marriage, the last child flew the nest, and Brenda and Eddie decided that it was their turn to enjoy themselves. This included getting the Corvette back on the road so that they could go to cruise nights and take an occasional road trip.
Although the car was structurally sound, 25 years of non-use had taken its toll. The car needed to be painted, the drive train needed to be rebuilt, and most of the systems needed servicing just to make the car roadworthy. They both knew that during its decades of hibernation it had increased in value and was now worth around $25,000. They had the work done at a cost of $20,000, the car was put back on the road, and they enjoyed it for the next 12 years.

Fast forward to 2012. The Corvette was now worth $40,000 — some $37,000 more than when they were married. Brenda decided that she didn’t quite enjoy Eddie so much anymore, so she filed for divorce. Her attorney advised her that the car belonged to Eddie because he came into the marriage with the car. But he also advised her that she was entitled to half the increase in the value of the Corvette because marital assets had been used to restore the car, thus enhancing its value to $40,000. Her attorney felt that because all of the work was done at one time, the car had been restored. Besides, how could a paint job be considered anything but restoration work? If Brenda’s attorney is correct, Eddie gets to keep the car but has to pay Brenda $18,500, which is half the appreciation.

Eddie’s attorney had a different opinion. There was no question that the car had been Eddie’s before the marriage, it was his car now and all of the work that had been done on the car was “routine maintenance,” which had no effect on the value of the car.

The car would have appreciated in value because it was a 1970 Corvette LT-1 convertible, not because it had been routinely maintained. Routine maintenance is routine maintenance, whether performed over a span of 25 years or all at once. How could things such as a rebuilt engine and transmission, new clutch, new front end, new suspension, new fuel system, and new brake system be anything but routine maintenance? Even the new paint and interior were routine maintenance. After all, the car was 42 years old! If Eddie’s attorney is correct, his client gets to keep the car, which is now worth $40,000, and he doesn’t have to pay Brenda a penny.

I told you that I would tell you why it matters whether the car was restored or just routinely maintained, and I just have.

I suppose that now you want to know whose attorney was correct. I’ve seen it go both ways; however, much more often than not it goes in Eddie’s favor. But it depends on many things. Whose attorney was more aggressive? Who had deeper pockets to pay their attorney to pursue this issue, which is usually just one of many issues? Could they agree on a compromise before the attorney’s fees exceeded the value of the car? How did the judge feel about the attorneys’ arguments? Was Eddie afraid of Brenda’s brother who hated him and has just gotten out of prison for murder?

As Sigmund Freud once said: “Sometimes a cigar is just a cigar.” Well, sometimes routine maintenance is just routine maintenance.