As usual the motoring column in the business section of the world’s greatest multimedia platform is here to save you. Yes, it’s the end of the financial year and yes, you want to shovel away some funds before the fiscal fiend can get his/her/other sticky fingers on to your hard-earned or ill-gotten gains (whatever the case may be).
So today it’s the six golden rules to investing in a classic car to make money. Of course, this is subject to the usual disclaimer that if you make money you share it with me and if it all goes south in a really bad way that’s your problem.
To help me I have put together a panel of global experts — including my friend Dave Kinney, publisher of the Hagerty Price Guide, the best classic car appraiser in the world, writer on classic car values for all sorts of important mags, websites and matchbook covers; and yours truly who has lost serious money on every car I have ever owned.
Now remember this is not about buying a classic car but actually investing in the hope the metal will be worth more than you paid for it at some time. The conventional myth is that classic cars have outperformed every other asset class over time. That’s not true. The top cars have done better than most but something like a spike in the gold price can lift returns on jewellery. Individual brands of cars like Ferraris from 1958 to 1973 have left every other asset for dead but so have some more recent Porsches and other supercars. Old cars used to be 25 years old. Now they can be collectables at 25 months.
Rule 1: Buy the best example of what you can afford. As Dave says “there is a huge difference in value between ‘kinda nice and a standout’ car”. So, you can buy a kinda nice 1973 Porsche 911T Targa in the US for $91,000. A serious low-mileage investment grade one will cost you $292,000. In 1973, Roy Eller bought his Kelly Green Targa. After a few miles Roy decided his Porker would be a great investment so he put the car in storage for 30 years. Out it came in January in pristine condition but not running with only 3400 miles on the clock and before you could say Hey Ferdy, Dave Gooding sold it for $426,000.
Rule 2: The more original the better most of the time. In 1967, diver Ugo Pillon found a 1925 Bugatti at the bottom of Lake Como. In 2009, Ugo and his mates brought it to the surface so Bonhams could auction off the rusted rotting hulk for charity. Bonhams thought some mad punter would hand over up to $120,000 for it. Pete Mullion, who made his billions selling financial services to ultra-wealthy people and owns his own car museum specialising in art deco metal, paid 500 big ones for it. Barn-find classics bring about twice the price of an unbarn find. On the other hand, legendary race cars restored to better than new also bring legendary prices.
Rule 3: Documentation reigns supreme. Roy’s car had the original sales invoice, owner’s manual, emission control system supplement, maintenance record, warranty book, tool kit, leather key fob, a Porsche certificate of authenticity, several registration cards, and various sales documents dating from 1973. No documents, no buy.
Rule 4: Buy rare cars with a history. The rarer the car, the better the story, the more famous the owner or driver or both, the more important the serial number, the better the investment. One of 10 ever built; a podium at Le Mans, Monte Carlo, the Tour de France; driven by Mossie, Fangio, Shelby or all three together? Add a couple of hundred. But if some has died driving it or killed others, forget it.
Rule 5: Look at the demographics. Baby-boomer classic car buyers generally want the cars, like E-types, that they couldn’t afford when they were teenagers. Cars that will be hot are from 1988 to 1990 when the then kids lusted after them but didn’t have the readies. If you’re 60 or over go down a generation or more. Buying a car from the 70s will see 20 years’ or more of growth. And best if they made an impact when they came out, like every version of the Ford GT.
Rule 6: You have to love it and you have to love driving it. Don’t just buy it as an investment. And when you buy it become an advocate for it. Show it, have articles written about it.
Now if you’re ready to buy, I’ll see you this weekend in Singapore where Cavaliere Giovanni Viterale’s (the only hotelier so good they knighted him) 90-year-old Fullerton Heritage Hotel will be hosting its first Concours d’Elegance with more than 90 classic cars to get even hotter and bothered about. The Sultan of Johor, who is a very serious motorbike person as well as car collector, is showing 12 of his cars, including a 1972 Ferrari Daytona that would be good buying at about $5m.
Don’t miss the 1926 Rolls-Royce Connaught Tourer, 1936 Mercedes-Benz 500K, 1938 McLaughlin-Buick 90L Limited, 2018 Bugatti Chiron and the 1972 Ferrari Dino 246GTS convertible. While Lamborghini is sponsoring the opening gala and showing a heap of new models, they might come off second best to the sultan’s 1991 Lamborghini LM002, and the car Dave Kinney loves so much he wants to knock down a wall and put it in his lounge room, the 1967 Lamborghini Miura. The world’s first supercar, a Miura cost $25,000 new. Ten years ago they were selling for $400,000 and now a good one will cost you close to $4m.