They're alive! Cuba's Frankenstein classic cars

Justin Solomon | CNBC

A classic taxi car cruises the streets of Havana, Cuba.

About 10 years ago, McKeel Hagerty traveled to Cuba, where the auto enthusiast and CEO of Hagerty Insurance Agency met up with some of the custodians of the country's iconic classic cars.

During the trip, a member of one of its many car clubs invited him for a ride in his 1956 Cadillac. Hagerty remembers the car being in good shape, even if some of the chrome was touched up with silver paint.

But then the owner turned the key—and a diesel engine roared to life. It turned out a Peugeot engine was under the hood.

Car collectors hoping to go treasure hunting in Cuba can expect to find many American classics in the same shape. The cars have been lovingly maintained through generations, said Hagerty, but they are Frankenstein monsters, products of America's 54-year-long embargo on the island nation.

The collision of old cars with new parts puts a question mark over how they may be valued if President Barack Obama's recent diplomatic overture eventually results in renewed commercial ties.

It may also disabuse a few assumptions people hold dear about the autos that rove Cuba's streets.

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"There's just this fascination with this idea that there's this treasure trove of collector cars sitting there waiting to be discovered or found, when in fact it's more of a time capsule," Hagerty said.

Cuba saw a mid-century boom that filled Havana's streets with Detroit steel, which remained after the socialist revolution and into the embargo years. At that time, car owners were forced to become auto parts fabricators for lack of access to American parts.

Cuba, land of six and seven figure cars

The best way to view these cobbled-together classics are as curated pieces of art from a long-gone era, Hagerty said. Their value lies not in their authenticity, but as artifacts that could have only arisen out of Cuba's tortured history with the world's largest economy.

"It's like the Galapagos Island from a car evolution standpoint," he said.

Hagerty believes the best of the cars could make it onto the auction circuit and attract bids in the low six-figures. That price level would represent a premium of two or three times the average value of the car.

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One of the models collectors can expect to find in abundance is the 1956 Cadillac Series 62, which has an average value of $51,465, according to Hagerty Insurance. There are also plenty of Pontiac Chieftans, valued on average at $32,900, and Chevrolet 210 sedans, which average $15,700, Hagerty said.

But some collectors will be looking for what he calls the holy grail: one of the high-performance Maseratis, Jaguars, or Ferraris. Those sports models once raced through Havana's streets during the brief period when former President Fulgenica Batista brought a Grand Prix to Cuba.

The footnote in history is best remembered for the kidnapping of Formula One World Champion Juan Manuel Fangio by rebels aligned with Fidel Castro at the second grand prix in 1958. A speedster from this period could fetch many millions of dollars, Hagerty said.

It is not impossible that a Mazerati 300s or Jaguar D-Type is sitting under a tarp somewhere. Back in the 1950s, racing teams would often sell their cars at the end of international races because it was too expensive to haul them home, the CEO said. At the time, Cuba was also a rich country with many willing buyers.

But unearthing one of these treasures is not likely either. Most of them left the country long ago, and there were only about 20 or 30 teams that raced in each of the three years of the Cuban Grand Prix, said Hagerty. He once encountered a Cuban Grand Prix car in Argentina that belonged to a Cuban citizen who snuck it out of the country during the revolution.

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As for the fate of Cuba's car clubs and the culture of do-it-yourself repair, Hagerty believes it will persist even if the United States lifts the embargo.

"These guys have been doing it so long, I imagine a lot of them will stick with what they have," he said.

"I think they'd all like to have their lifestyle and income improved, but you can tell there's a nostalgia for how they've been able to survive, as well," he added.