Big Spending on Little Wheels For Matchbox collectors, a rare miniature car can be worth more than a real one.
By P.B. Gray

(FORTUNE Small Business) – Like a lot of men, Charlie Mack pines for a dream car that always seems to be tantalizingly out of reach. In his case, it's a boxy sea-green sedan, the 1966 Opel Diplomat. A rare few are being offered for sale, but at $9,000, they're beyond his budget. If only he'd bought one years ago when they first hit the market. The price back then: 48 cents. That's because the Opel he wants is small enough to fit in the palm of his hand--a miniature die-cast Matchbox.

Matchbox scale models were first introduced in England in 1948. Now owned by Mattel, the company manufactures about 100 models a year, and new cars are still a bargain at less than $1. But early and rare models can be wildly expensive, and now is the time of year when prices typically rise. Most Matchbox conventions are held in the summer, and collectors like to fill in the gaps in their portfolios before the show season starts.

"It's all about nostalgia," says Mark Curtis, 43, who owns a small engraving business in Kennesaw, Ga., and is one of the larger Matchbox dealers in the country. "We're all trying to reclaim the past when we used to play for hours in the sandbox with our toy cars."

Hard-core Matchbox collectors would probably never let their cars anywhere near a sandbox today. Jim Gallegos, a 46-year-old sales manager in Rio Rancho, N.M., added a room onto his home to display 5,000 of his favorite cars, and he built a climate-controlled warehouse nearby where he stores the other 35,000 (the total collection is worth some $1.4 million). Gallegos also has about 100 glass display cases, in which he has placed the cars atop their boxes, just as they were in the five-and-dime store he frequented as a boy. His rarest prize: a 1968 No. 30 crane truck with an arm that swings 360 degrees. It's worth $13,000.

Few collectors have the encyclopedic knowledge of Charlie Mack. At 47, Mack is one of the preeminent Matchbox authorities in the world, and he has turned his obsession into a business. Mack wrote the definitive guide to collecting the cars, now in its third edition, and he publishes a monthly magazine with articles on topics such as how to care for the increasingly fragile cardboard boxes that the cars came in decades ago. (Some Matchbox boxes--even without the cars--are worth thousands of dollars.) Each June, Mack sponsors a three-day convention, which draws as many as 500 collectors. The 23rd annual is scheduled for June 4-6 in Parsippany, N.J.; expect trading to be heated.

As for his personal collection (31,000 cars, taking up five rooms of his house in Durham, Conn.), Mack still adds several dozen each year, but he's pickier now. His most valuable holding is a yellow junkman's cart made in 1948, worth $5,000, but he still covets the Opel Diplomat, which collectors prize because few were made in that particular shade of sea-green paint. He keeps his eyes open, though, and occasionally he finds extraordinary steals. In the late 1980s Mack bought a rare tan-colored crane truck at a neighbor's tag sale for $10 and sold it three years later in an online auction for $10,000.

Predictably, a lot of the buying and selling takes place on eBay. (At any given time about 12,000 items are offered for sale under the Matchbox category.) Tim McCray, 47, a dealer in Anacordis, Wash., sells about 200 cars a week in online auctions, enough for him to make it his primary occupation. "I make $50 an hour working at home," he says. "I've got a pretty good deal going here."

Typically McCray buys large collections of several hundred old cars, then sells them off, one by one, over time. Saturday evenings are the best time to sell, he says, because prices tend to climb as the night wears on. His explanation of that phenomenon: "Must be a lot of guys without dates."