I think the answer to the question posed by Jimmy cannot be given in absolute terms, as it is very much dependent on taste. Some people like crumbly old houses, some people want all steel and glass modernity. It is my opinion that people view vintage cars in a similar spread.
Personally, I only like patina on cars that work. For me, first and foremost the car needs to be in a mechanically great condition, otherwise it is NOT what the original manufacturer intended. I do not get excited by seeing a car that still has 1951 vintage air in the tyres from Maranello but you can't drive it because those tyres are square now.
It follows then that for old cars, if I had my way, this means that some items will need to be replaced and eventually (almost) everything will need to be replaced. Many cars have been badly treated in their lives, and non-original things have already found their way onto the car. A case in point is my LHD Boxer. Non-original steering wheel, non-original stereo, some idiotic mechanical lock on the glove compartment with a cut in the leather, non-original exhaust system. The paint is bad even though the car spent most of its life indoors.
The other case in point is my 330GTC. Although it had been painted only 4 years before, the previous owner decided to do a ground-up restoration because the colour was red (terrible colour for a GTC) but more importantly the car was not correct anymore. He spent two years finding the correct items and restoring the car to a perfect example again. Then - he drove his car. When I bought the car 20 years later, it had (and has) a lovely used feel but it still looks fantastic because he kept touching up the car now and again. Every year before winter, the car would be stripped from it's chrome and cleaned, waxed and polished inside and out.
Every once in a while the road rash became too ugly and he took the car to the experts to touch it up gently, so that it still retains that mix of concours show and real world usability. In the meantime I have photos of his son driving sideways and smoking the tyres!
So this is the route I will take with the 365BB restoration. It will be done ground-up, with no expense spared, but I will not keep the original colour of the car (both interior and exterior will change) and I will not try and preserve everything. Instead, I will rebuild it as it might have left the factory if I had ordered it in 1975 (maybe slightly better but with all the correct fittings etc) and then I will use it. The 330GTC only really began to shine with the previous owner. I intend to do that with my Boxer. And I want it to be MY car. It is not intended to be sold, ever, if I can avoid it.
So in summary - I do not think total ground-up restorations are necessarily evil, they are more a necessary evil for some cars. In some cases it is a real shame, even a crime, that a total restoration was used, but in most cases it is the right thing to do if it is done correctly, with the aim of resurrecting a car as close to original as possible so it has a new lease of life and can be enjoyed. To be clear - I am not talking about one-off cars with racing history and so on, I'm talking about production cars.
That is my view - of course others have the right to feel different.
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