(MONEY Magazine) – When the high-finned '50s Cadillac convertibles started spinning on the auction turntable in Las Vegas this spring, Robie Wayne's head spun too. Wayne, 40, a Cadillac aficionado from Minneapolis, had his heart set on a 1957 white Biarritz. But he had to drop out of the bidding when the price raced past $34,000. Someone else nailed it for $40,000. ''I was crushed,'' recalls Wayne, who is a fund-raising consultant when he's not drooling over cars. ''The Biarritz is more or less the Cadillac of Cadillacs, and it was just the kind I'd always wanted.'' But only a month later, he spotted a comparable '57 Biarritz on a southern Minnesota used-car dealer's lot for only $22,000. ''I would have paid twice what that Caddy was worth if I'd bought it in Vegas,'' he says philosophically. Instead, he has postponed his purchase until he learns more about the Caddy market. ''Everyone says these cars are hot,'' he says, ''but I'll get smart, take my time and buy only what's good.'' Welcome to the wonderful world of automobile collecting, where prices have been rising about 5% a month on the most popular models for the past year. ''Since the stock market crash, there has been a feeding frenzy in cars,'' says Richard Roth, a longtime Porsche collector who races a couple of cars on the amateur vintage racing circuit. ''People don't know what to do with their money.'' At an early auction, run by Barrett-Jackson in Scottsdale, Ariz. last January, for example, top cars went for about 60% more than they did the year before, triple their average annual gain for the past 15 years. Gains have been even more dramatic for the best cars. Top Ferraris have tripled in three years; a Daytona Spyder that cost $27,000 new in 1971 now goes for almost $800,000. The 1959 Cadillac Biarritz convertible, a used car worth a pittance 10 years ago, commands as much as $75,000. Even the humble VW Beetle convertible can fetch $12,000 these days. This price explosion is fueled in part by affluent, middle-aged buyers nostalgic for the grandiose cars of their youth and partly by foreign buyers, whose more powerful currencies make U.S. goods a bargain. Luxury-car lovers have helped too: faced with a $60,000 tag for a new import, many opt for a $30,000 chromosaurus from the '50s instead. And this year, one car -- the Tucker -- may soar 25% on Hollywood hype with the release of Tucker: The Man and His Dream, a film about its creator. That's good news for executive producer George Lucas and director Francis Ford Coppola. Between them, they own almost 6% of all Tuckers ever made -- possible only because Preston Tucker managed to make just 51 vehicles before his company stopped production in 1948. But, car market experts warn, making money in cars isn't so simple. While prices probably will continue to rise annually, a few marques may be headed for a brick wall. In a comment that captures the prevailing mood, Don Williams, a collector and dealer in Danville, Calif., says: ''I'm concerned that some specific models, like the Ferrari Daytona Spyder and the late '50s Cadillac convertibles, have been climbing too fast.'' The first to slacken, market watchers predict, will be cars from the '20s and '30s. The people who collected them three decades ago because they were the cars of their youth are no longer buying, and you can find bargains at auctions and estate sales. Moreover, people today want cars they can drive. As Katie Robbins of the Classic Car Club of America points out, ''Duesenbergs are beautiful, but they handle like a truck.'' The superb examples from the '50s and '60s may be up between 50% and 300% five years from now, but many models -- including lackluster four-door sedans or ordinary station wagons -- will not rise at all. Therefore, the novice collector must beware. Victor Fiore, a collectible-car consultant based in Burlingame, Calif., says flatly: ''If you don't know what you're doing, and you're buying for investment, I'll bet against you.'' If you want to park profits in your garage, remember these laws: -- If a car wasn't popular then, it won't be popular now. The AMC Rambler, for one, wasn't hot when new and still isn't. -- When the top goes down, the price goes up. Convertibles are considered glamorous, from Model B Cabriolets to Corvettes. -- Power under the hood revs up the gains. A 16-cylinder early '30s Cadillac Town Car is worth more than a 12-cylinder model. A 1968 Plymouth Barracuda with a rare 426-cubic-inch Hemi engine outprices one with only 318 cubic inches by 300%. -- Condition is everything. Amazing sums are not paid -- except by fools -- for cars with rotten floor pans, rusted chrome and broken engines. Buy only cars in condition grades 1, 2 or 3 in the industry's 1-to-6 rating scheme (for an explanation, see the box on page 134). -- Don't try to restore a car. Unless, that is, you are a mechanical hobbyist. The price of restoration can match that of the vehicle itself, as John Harris, a Dallas collector, learned the hard way when he paid $10,000 to restore a $12,000 yellow and black '55 Ford Sunliner and got only $14,000 for the car at auction a year later. -- Steer clear of shabby restoration jobs. It's easy for a novice to get taken by what auto restorer Danny McPherson of Shamrock Auto Trim in North Miami Beach calls a ''bondo buggy,'' a car that has been patched with fiberglass bond filler and painted over to hide the rust. -- Also watch out for fakes. ''To satisfy the demand,'' says Fiore, ''backyard car mechanics are literally making cars that Ford or Chrysler hasn't produced for 30 years.'' Invest the $100 to $250 it takes to get an expert appraiser to inspect the car before you pay thousands for it. -- Make decisions with your head, not your heart. ''Don't lust after a car when you are buying it for an investment,'' urges George Crocker, president of Domino's Classic Cars in Ann Arbor, Mich., a 220-car, $30 million collection he owns jointly with Thomas Monaghan, owner of the Domino's Pizza chain. Read about the marque that interests you. Join a collectors' club, and go to club meets and car shows. Then zero in on one type of car, at the right price, in the right condition. ''If you shotgun your available funds, you'll be sorry,'' says Ed Jurist of the Vintage Car Store in Nyack, N.Y. Since the tab for a particular car can vary by as much as 100% from region to region, seller to seller and auction to auction, try to find out its prevailing national price first. Among the best sources: Hemmings Motor News (Box 100, Bennington, Vt. 05201; monthly, $52 first class, $19.95 fourth class), Old Cars Price Guide (700 E. State St., Iola, Wis. 54990; bimonthly, $12.95) and such books as Car Values (Collector-Car Auction Reporter, 3610 Sowder Square West, Bloomington, Ind. 47401; $24.95), which lists September to September auction prices for thousands of models. Be especially careful with the super-hyped collectibles of the moment: the bad, bad high-performance ''muscle cars'' of the '60s and early '70s, such as the Shelby Mustang, the Corvette, the MoPar cars from Chrysler, the Chevy Camaro and the Chevelle. Few true originals exist because these cars were often customized right out of the showroom and, in some cases, drag-raced into the dust. Now, to satisfy demand, muscle parts are being patched together into cars and hawked as the real thing. ''The restoration work is so good that a rag doll can be turned into a supercar,'' says Rick Mayberry, assistant director of marketing for the group that organizes huge annual car shows in Carlisle, Pa. Even ''matched'' numbers -- on the dashboard and cylinder heads of the Corvette engine, for example -- are no guarantee of authenticity. ''Half of the 'Vettes with matched numbers are frauds,'' asserts Victor Fiore. The best way to purchase a car is through a private transaction after you place a classified ad in a car magazine or locate a seller at a club meet or auto show. Auctions are particularly dangerous. You usually have little chance to inspect the car, and only the iron-willed don't get swept away by the bidding excitement. And one simple but key piece of advice: don't buy a car you haven't seen. High-pressure salesmen will tell you over the phone that you will never get a chance at a car like this again and to wire money on the double. Two weeks later, you will find a pile of rust on your doorstep. As Richard Roth says, ''The chance of a lifetime comes along about once a week.'' Finally, once you have got your car, drive it! Unless you have spent huge sums for a museum-quality machine, the best care you can give an aging vehicle is to get it up to full running temperature regularly. Insurance for cars over 30 years old, covering theft, fire, collision and liability, runs about $100 | to $300 a year for each $20,000 in car value. If your auto is too valuable to drive, you will still need to change the oil regularly, jack up the car to protect the suspension, and take other steps such as dehumidifying your garage to prevent deterioration. When it comes time to sell, your first step should be to place ads in car- club newsletters and national magazines. See what kind of offers you get. If you decide to sell at auction, use those offers to set the lowest price for which you will sell the car (the reserve price). And be prepared to stick to that figure: auction houses don't get a commission if you don't sell, so you may be pressured to accept less than you want. If you have the discipline and patience to buy at a fair price and to sell at a fairer price, you might make a pile. But even if you don't, you will at least have had the fun of driving a piece of vintage Americana -- which is the real pleasure of this kind of collecting in the first place.

BOX: Who has the last laugh now?

Not long ago, the lumbering giants of the 1950s, with their jet-age fins and baroque chrome trim, seemed comical and as obsolete as dinosaurs. How times change! Today the glittering behemoths of the Eisenhower era are trendy again -- and commanding some very hip prices, up 50% in the past 18 months. The prices below are for next-to-the-top grade 2 cars (see the box on page 134 for an explanation of condition grades). From the ocean liner sweep of the Eldorado to the metallic leer of a Buick's grill, they evoke a bygone America. Remember?

BOX: From ''Woodies'' to Camaros, your best collectible car buys for $20,000 or less

Here are MONEY's investment picks and the experts' forecast of how much they will appreciate by 1993. You can still buy any of them for less than $20,000, though most have a good prospect of roughly doubling in value over the next five years. The exact price you pay today depends largely on the car's condition, which the industry ranks on a scale of 1 to 6. You should buy cars only in grades 1 (perfect condition), 2 (excellent condition but requires minor restoration) or 3 (drivable but needs work). A No. 1 usually costs about 50% more than a 2, which in turn costs about 50% more than a 3. The prices in our table reflect typical ranges for 2s.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: NO CAPTION DESCRIPTION: Price ranges and investing comments on six types of collectible cars for $20,000 and under.