do hope that in my column last month I did not present a picture of glass half full in the classic marketplace. It appears that good cars will continue to do well, and this was perfectly demonstrated at Amelia Island last month when Bonhams, Gooding and Company, and RM Sotheby’s grossed around US$126M between the three of them — 25 per cent up on 2015! There are good buys to be had, and there is money to be made if you are seller — just do not expect to get big money for an average car any longer. The market has been hot, but collectors are now only paying top dollar for special cars and not just everyday classics. Cautious optimism therefore is the order of the day.
TV comedian Jerry Seinfeld’s 18 Porsches — 16 of which sold — did well as expected, with Gooding and Company also selling a 1961 Ferrari 250GT SWB California Spider for US$17.2M. RM Sotheby’s, meanwhile, headed the list with 87 per cent of its cars sold. As auctioneer Eli Rodriguez said, “Anyone can jump in, the water’s warm”. Bonhams sold the Bugatti T57S with Vanden Plas body we discussed last issue for US$9.375M. This was a little short of its estimate, but still a lot of money for a not particularly pretty car, even if it is a rare Bugatti.
You do not have to go all the way to the States to get a good car, though. If the Maserati Vignale Spyder that was sold at Amelia Island by Bonhams is to your taste, then Theodore Bruce Auctions in Australia has another coming up at the Motorclassica auction on October 22 in Melbourne, while, on March 14, in Sydney, Shannon’s sold a 1957 Porsche 356A Speedster for A$411K, a bargain
perhaps when compared with the US$1.54M paid for Seinfeld’s 1958 356A Carrera Speedster GS/GT.
For the present, though, all auction eyes turn to the UK, where, on April 19 and 20, at the Imperial War Museum in Duxford, H&H has a very British sale taking place. It includes a trio of Bentley Continentals and a nice selection of Aston Martins and Jaguars, including a 1961 E-type 3.8 Competition Roadster with an estimate of £700K to £900K. The cream of the crop, though, at this sale, and the car that is causing the biggest stir, is the 1954 Lagonda 3.0-litre drophead coupé with an estimate of £350K to £450K. At this price, it needs to be a special car, and that it certainly is. It was built to special order for HRH, Prince Philip, Duke of Edinburgh, as his daily-driver. Just 20 MKI Lagondas were made, and this one — in bespoke Edinburgh Green livery with original grey leather upholstery — was fitted with a power hood, floor-change gearbox, a radio telephone (with its own frequency!), and an extra vanity mirror on the passenger side for Philip’s wife, Her Majesty, the Queen. Prince Philip owned it for seven years — before switching to an Alvis TD21 DHC, which is still at the palace, apparently — and this remarkable Lagonda has been in its current (third) owner’s care since 1977. This one ticks all the boxes, and I would not be surprised if it fetched over half a million pounds at the end of the day.
So, even though, year on year, the market has been slightly down — according to the Historic Automobile Group International (HAGI) index — there are some wonderful motor cars to be bought and sold. There is plenty of reason for optimism in the marketplace in 2016. It is definitely still a glass half full.
This issue, we follow on from last month, when we mentioned classic vehicles as an organized form of passion investment — a trendy, fun investment that allocates wealth towards collectibles. We are witnessing a trend that, to a car-loving country like ours, should appeal to both existing and upcoming generations in New Zealand.
Investment vehicles have proved to be one of the most lucrative and robust investments around the world, providing the right marque and model is chosen. The best examples of pretty much any marque and model have been the real winners when it comes to an increase in value. The right marque, of course, does not need to be a Ferrari, as marque preference differs from one country to another. No doubt some of us in New Zealand love Ferraris, but we also love cars that helped us build our country — like Fords and Holdens, to mention a couple of examples — and these, too, fall into the category of investment vehicles.
Over the past five years, values for goodquality classic vehicles have proved that they are as prudent an investment as fine art, clocks, and watches. Nowadays, we are also seeing people investing in cars as a diversification from their property portfolios. Much has been made of the performance of the classic car market over the last 12 months, but the reality is that values have been growing steadily since 1998.
With the growing trend in investment vehicles, New Zealand buyers have been / are still acquiring good-quality classic vehicles as investment-only purchases, to sit in their garages for sale at a later date.
The New Zealand classic car market is becoming more sophisticated, and one of its main strengths is the passion behind it. We Kiwis love our cars, and now, with a buzzing classic car scene that includes events such as Napier’s Art Deco Festival and the Concours D’elegance show as well as myriad well-organized clubs for owners, tours, events, and world-class museums spread throughout the country, these cars are the key to a lifestyle, as well as a wonderful piece of mechanical history.
The other argument is that, with interest rates so low, an owner’s hard-earned cash isn’t making anything sitting in a bank account — so Kiwis are warming up to spending it on something that brings some enjoyment, with the added benefit that it is just as likely to produce a return as investing in the stock market.
Supply and demand
It is a good thing that today is unlike 30 years ago. Back then, many buyers financed their purchases, and, when circumstances changed, the owners needed to get out of them pretty quickly — resulting in a glut of cars on the market and values sent into freefall. It was a simple case of supply and demand. Nowadays, buyers are paying with their savings, and, unlike in the 1980s, people are buying for reasons other than the promise of a quick profit.
The market for very good cars is currently strong. The supply of exceptional cars is limited and demand is high, so the market trend is unlikely to change any time soon — if anything, it is more likely that demand will increase rather than dwindle.
Last year was another amazing and intriguing one for the classic car hobby. We saw more growth in values and even more in activity. Enthusiasm for the classic car hobby remains undiminished, and prices were on the increase in 2015 and continue to be now. The supply of some cars exploded, with the availability of a few models almost doubling. Quality vehicles
are becoming increasingly hard to find, and the difference between the best cars and the rest keeps getting wider.
Quality is becoming the real differentiator in the market, and this was a defining feature in 2015. The best cars make the best money — the rest are sticking around. Beware though — there are still plenty of average-condition-butexpensive cars out there, and the market knows it. Make sure you seek the right advice before buying.
Fortunately, the internet has made it much easier to find cars to buy, but the perennial problem of finding a good one still exists. I come across too many horror stories of buyers importing cars from overseas or even buying blindly locally online or from flea-market-type venues and auctions.
We need to be serious when talking about investment vehicles, as we’re here threading into specialized markets, and the reality is that, unless one is an absolute expert, it would be brainless to buy investment cars sight unseen. On the other side of the coin, unless one is really and truly passionate about these cars, one shouldn’t be making a business out of selling them, either.
I can’t stress enough that these are investment vehicles we’re discussing, old cars dressed up to look nice in photos. Buy the right car, and, at the very least, you will enjoy owning it; at best you can make a good return on your investment. Buying quality is key, and with quality much in demand, I see a healthy future for the classic car market in New Zealand.
Safe driving — until next month.