My question is, do I replace the seats and maybe have the car painted? Will it depreciate the value of the car?
From the point of view of a lay person with lots of money - not sure. From a point of view of a collector - absolutely!
Original things are always more rare and, thus, more desirable regardless of the restoration quality.
Think about it this way: we have two identical cars leave the factory. One car sat in the garage for most of the last 50 years and preserved well, aside from some expected aging. The other one has seen some normal use, got some rust patches, was repainted 2 times, maybe an engine rebuilt, etc. Which one do you think is more valuable right now?
Now, the owner of the first car did not do anything to it, while the owner of the second car had it restored for a lot of money. Which car, do you think is more valuable, now? (Not selling for a higher price, but is more valuable?)
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