I

New Zealand Classic Car - - INTERNATIONAL MARKET REPORT - Photos:

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.

Clas­sic in­vest­ment

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.

Royal con­nec­tion

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.

In­vest­ment po­ten­tial

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.

Right choice

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.

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