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Invest in a Classic PDF Print E-mail

Lovingly restored, at often vast expense, a classic motor car can be a valuable asset.  Or it can be a recipe for disaster if the wrong automobile is selected.  The trick is to select a vehicle that has sufficient rarity value it will almost certainly appreciate.  Far too frequently though buyers are misled into believing the car they are about to invest in is something unusual or was owned by someone of celebrity status.

Recently, a Ferrari 275 GTB previously owned by actor Clint Eastwood and film producer Dino de Laurentis went for US$481,000, considerably more than any more mundane 275 GTB.  The key here is, of course, provenance.  Without documentation to the effect, previous owners can be more or less discounted.

A 1974 Ferrari 365GT/4, previously owned by King Hussein of Jordan, on the other hand, went for a mere $152,265.  Clearly, the Eastwood/De Laurentis parentage was considered more valuable than that of a Middle East monarch.

A good way to begin looking at classics as an investment is to visit a number of motor museums to discover what is of sufficient rarity to be worth exhibiting publicly.  A Bugatti will always be a valuable asset and the largest collection of these fine motor cars can be found at the French National Automobile Museum in Mulhouse in south-east France.

Mercedes-Benz
Mercedes-Benz

The collection was assembled by the Schlumpf brothers, who plundered both their workers and the French government to fund their acquisitions.  Fritz and Hans Schlumpf were wool merchants in this part of France, but Fritz was passionate about cars.  Before the Second World War he bought a Bugatti 35B, built close by at Molsheim in Alsace, but it was not until the Sixties he began assembling this remarkable array of cars.

By 1971 the existence of the private Schlumpf collection had been established, but it took the trade unions a further six years during which there was continual tension between the unions and the industrialist owners before they discovered the true value of the cars.

In 1976, the Schlumpf group stopped all activity, throwing 2,000 workers out of a job, but it was not until March 1977 the amazing collection was discovered, by which time the brothers had fled to Switzerland.  In lieu of unpaid taxes, the French government took over the hoard of motor vehicles and formed the National Automobile Museum.

Mercedes-Benz has a long and rich history and any semi-rare Mercedes would be worth a long-term gamble.  If it has a racing pedigree, such as the 300SLR that (Sir) Stirling Moss took to victory in the 1955 Mille Miglia, so much the better. At a Bonhams’ sale at last year’s Goodwood Revival meeting, a 1929 7.1 litre Mercedes-Benz 38/250 Model SSK for a staggering £4,181,500. At a Bonhams sale in Gstaad just before Christmas, a 1958 Ferrari 250 California Spider went for $1,252,220, but these values are clearly distorted.

Racing cars do not always command high prices.  At the same Gstaad sale an ex-Alain Prost Ferrari F1 car, currently owned by team boss Sir Frank Williams, did not reach its reserve of $700,000, but this summer Michael Schumacher’s 2004 championship-winning Ferrari will be auctioned by Sotheby’s in Fiorano, Italy on May 23.  It is rare for a modern Formula One car to come on the block but such is Schumacher’s meteoric career the F2004 is likely to command a ridiculously high price.

A 1958 Ferrari 412S, driven by American racing drivers Phil Hill and Richie Ginther will also be auctioned on the same day.

When considering an investment in automobiles it is essential to look further than their perceived value.  A great deal of driving pleasure can be obtained from some of these old cars, notably older Mercedes, Aston Martin, Rolls-Royce and Alvis models.  The Alvis was undoubtedly one of the most elegant motor cars ever built.

Formed in 1921, the Alvis Car & Engineering Company produced a wide variety of cars, including some incredibly beautiful saloons.  Probably the best-known was the Alvis TE21, or Series III, 3-litre saloon which was introduced in 1963 and remained in production, with certain modifications which caused the designation to change to Series IV, or TF21, until 1967 when the last Alvis car came off the line.  Only 105 TF21 models were ever produced, giving the Alvis an undoubted rarity value.

A number of Bentleys can be termed classics and are worthy of consideration for investment purposes, notably the R- and S-Type Bentleys of the Fifties.

Image Celebrated musician Jools Holland owns a 1958 S1, but it is probable that an earlier version would be more valuable. Care should be taken to establish whether the model selected is a genuine Bentley, particularly with the R-Type which was often featured with a variety of bodies from vastly different coachbuilders such as H.J. Mulliner, Park Ward or James Young.  While most were reputable, the body manufacturer should have Bentley approval to endow the car with any real value.  That is not to say that some unique examples would not reach a high price: Prince Bernhard of the Netherlands actually designed the body of his four-seater, drop-head R-Type himself.

The R-Type was produced from 1952 until 1955, with later models having optional automatic transmission.  Also in 1952 a fastback R-Type Continental coupé was produced with a sleek body by H.J. Mulliner.

Image  A total of 208 R-Types were built, the majority with the Mulliner body, but a few were produced with bodies by Abbott or Park Ward.  In April 1955, the R-Type was superseded by the S-Type, based on the Rolls-Royce Silver Cloud.  Rolls-Royce and Bentley models thereafter became virtually identical apart from the radiator grille and emblems.  Bodies for the S-Type Bentley were again by Mulliner (the coupé) or Park Ward (coupé and convertible).  In 1963 the S3 was introduced, distinguishable by its twin-headlamps.  The last of the series was produced in November 1965.

The downside of ownership of an R- or S-Type in Hong Kong is that there are few specialised workshops that could cater for such a valued asset and the franchised distributor, Chinese-controlled Dah Chong Hong, would have little expertise with a car of that era.

Rolls-Royce classics can be a good investment, but high maintenance costs can be a deterrent.  Furthermore, if previous owners have not used authorised Rolls-Royce repairers, giving the vehicle a full service history, the value of the car is dramatically reduced.

Models from the Thirties and Forties are particularly good investments but are expensive to purchase now and may not offer a good return.  Avoid later Rolls-Royce, particularly those made after 1965 which featured unitary construction (instead of a separate chassis) and are not considered to possess any rarity value.

To decide which marque or model to invest in it is necessary to discover whether they were produced in volume or limited editions.  Clearly, the lower the production run, the more likelihood of the vehicle becoming a classic.  In addition, establish whether the car in question was held in high esteem during its production life.  Some models, such as the Alfa Romeo 1750 GTV of the Seventies, were considered classics during their working life.  Similarly, the Lancia Fulvia HF, while a brute to drive with its high-torque engine powering the front wheels, causing dramatic torque-steer, particularly in the wet, was without doubt a classic of its era.

Image While racing cars can be a good investment, they obviously cannot be driven on a regular basis, thereby depriving the owner of a certain amount of pleasure and enjoyment.  The Le Mans-winning Group C Porsche (pictured) is to be auctioned by Christie’s in Paris with the hammer price estimated to be between 800,000 and 1.2 million euros.  

At the same sale, a 1964 Lancia Flavia, driven in competition by René Trautmann, is expected realise between 50,000 and 70,000 euros.

While auction houses hold regular sales of classic or distinguished motor cars, prices ca inevitably become inflated and it is often preferable to visit a specialist dealer in the chosen marque.  These can be discovered through the pages of various magazines, such as Britain’s Motor Sport or Classic Cars, or the Florida-based Car Collector magazine.  Most of these publications have their own websites which will give an idea of prices or availability of certain cars.  Other magazines worth taking a look at include Australian Classic Car and New Zealand Classic Car, the latter featuring some real bargains, all in excellent condition.  Bear in mind, however, that duty would have to be paid on the car if entering Hong Kong but this can be negotiated with the Customs and Excise Department and if the vehicle is of a certain age, would amount to very little.

 Bentley Blue Train
Bentley Blue Train
The most important thing to remember when investing in a classic automobile is that it should be purchased with driving enjoyment in mind.  These rarities should not be mothballed; they should be on the receiving end of a Sunday outing at least once a month.  The pleasure is in their driving characteristics as well as their visual features.

And the truth of it is, unless an investor is extremely lucky, the return on a classic motor car is going to be extremely low.

Mercedes-Benz
Mercedes-Benz
 

 
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© 2018 Jeff Heselwood. All rights reserved.
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