In 1978 my grandfather offered to sell my father his maroon Aston Martin DB5 for £4,000. They were about to do the deal when my father realised that he couldn’t fit both my brother’s child seat and my carrycot in the back. He passed — and bought a Renault estate instead. At the Goodwood Revival this year, Bonhams sold a similar DB5 for £455,100. I wonder if my father curses me and that bloody carrycot.
The DB5 built between 1963 and 1965, once the preserve of a special breed of enthusiasts, is now attracting serious investment money. It’s not the only model in that category. James Wheeler, a specialist at H&H car auctions, told me about a friend of his who bought a Ferrari 275 GTB for around £80,000 in the 1990s: it’s now worth at least a million, and the owner is reluctant to take it for a spin.
Cars like the Ferrari and the DB5 are the blue-chip stocks of the car world, but some less rare models have also increased dramatically in value in recent years. Wheeler quotes the Porsche 911 from 1993–97, ‘the last of the air-cooled models, which you could pick up for mid-teens in 2011, but rose to £40,000 for a good example’. If in 2011 you’d put your money in, say, Chateau Lafite 2009 or 2010 instead of a Porsche, you would be down by about 40 per cent. (Both wine and cars are considered ‘wasting assets’ by HMRC, by the way, so there’s no capital gains tax.)
Those heady days are now over. Former Top Gear presenter Quentin Willson told me that ‘the market has adjusted down 15 per cent since 2015’. At the big auctions that act as barometers of the global classic car market — Scottsdale Arizona in January, Retromobile in Paris in February, Monaco in May, Goodwood Festival of Speed in September — cars have been going for less than expected or not selling at all. ‘Investors are bailing out,’ said James Wheeler. ‘Bonhams and others have had a rough time in recent auctions. Their sales rate, which had previously been 70 per cent, is now around 50 per cent.’
Quentin Willson explained the problem: ‘Too many people getting involved without the requisite knowledge.’According to Wheeler, the boom was attracting too many ‘investors who knew nothing about cars’. Lots of people were buying purely to make money without factoring in running costs, garaging, insurance and servicing.
And of course there are echoes of wider economic uncertainties. The worry is that we’re seeing a return to the early 1990s, which saw a similar boom in the auction arena followed by an almighty bust. The biggest casualties were modern classics such as the Ferrari F40 — going for £800,000 in 1990 but as little as £100,000 by 1992. ‘The difference then was most of these cars were bought on credit; now it’s all cash,’ James Wheeler told me. Alex Prindiville who runs an exotic car dealership in London added: ‘It’s a global market now with demand from the super-rich.’
The cars that are proving hardest to sell are ‘overpriced and poorly documented cars bought for the wrong money in the boom years of 2014 and 2015’, according to Willson. So how do you avoid buying one of these? Wheeler used to run an Alfa Romeo dealership: when buying a car, he would try to contact all the previous owners to get a feel for its history. He told me: ‘Provenance is key, history is key. More important than anything. You can pay the best restorers to make it perfect, but if it has no history then it’s not worth so much. Buy the best, pay the most. Bargains will come back and bite you.’
Original details are important too. Alex Prindiville told me to check that the numbers on the engine, chassis and gearbox all match. Watch out for ‘colour changes, engine changes, wrong hubcaps, wheels or tyres’. Alfa enthusiast Richard Harrison bought a ’61 Giulietta Sprint Normale recently because he saw straight away that it was unusually original. ‘Two cars may look identical on paper but totally different in the flesh.’ The chassis on his Alfa had never been welded; rare in a car of this age. He’s looking for a buyer with around £90,000.
If you buy from a specialist, they should provide all the information you need. Private sales will often be cheaper — but go in forearmed with serious knowledge. Some specialists and owner’ clubs will check a car over for you, for a fee. Auction houses can be a good place to buy and should offer some legal safeguards in case your car turns out to be not what it seems. Again do your homework, stick to your upper spending limit and remember you have to pay a buyer’s fee with VAT on top.
When trying to spot the next big thing, rarity is everything. Quentin Willson tips the Sunbeam Tiger, which like the notorious AC Cobra was a British sports car with a big American V8 engine. A mint Tiger will cost about £50,000, while original Cobras can touch £1 million. He also tips ‘very early 1961 E Types; they’ve fallen but will come back.’ Alex Prindiville recently sold just such a car for £150,000 to a well-known Formula 1 driver. He’s also very excited about ‘hot hatches’ and saloons from the 1980s. A Peugeot 205 GTi 1.9 sold for £30,000 this year; five years ago you could pick one up for £2,000. Sierra Cosworths are particularly valuable: one went for £100,000 recently, its rarity boosted by the fact that so many others have been stolen or written off. Wheeler recommends going through old car magazines from the Eighties and Nineties and looking for small-volume cars that were critically lauded at the time.
It’s vital that you look after your treasured machine properly. A garage is essential, and that makes owning a classic car in London expensive. Wheeler recommends budgeting a couple of grand a year for maintenance; more for exotica such as Maseratis or Aston Martins. ‘There are lots of specialists out there but there’s a lot to be said for getting hands dirty and getting to know your car.’ Or you could pay a company such as Bicester Heritage to store and service your car for you for £155 a month.
If even this is too much hassle, Alex Prindiville
might have the answer. He has just launched an asset-backed ‘mini-bond’. The assets are cars; not just classics but super-rare moderns such as the Porsche 918, Mclaren F1 and LaFerrari. It promises to pay out 7.5 per cent per annum. The dividend comes from sourcing, buying and selling the cars through Prindiville’s contacts. Larger investors can drive some of the bond fund’s assets at track days. Of course the concept is based around the expectation that the cars will hold their value, which is far from certain. But Quentin Willson is confident about the long-term health of the market, which he believes ‘is showing real signs of maturity and long-term strength’.
But for most of us, the joys and pitfalls of classic car ownership are as important as the investment value, if not more so. Richard Harrison even relishes ‘the uncertainty about whether you’ll complete a journey’. I can’t recall my father being so philosophical when the Aston left us stranded by the side of the road. He would never have held on for 38 years until the car was worth half a million quid. You have to have the right temperament to own a classic car; so perhaps, in the end, we had a lucky escape.