Geared for life

Finweek English Edition - - INSIDE -

On the face of it, the idea of a car as an in­vest­ment or ap­pre­ci­at­ing as­set just seems plain fool­hardy. The av­er­age c a r de­pre­ci­ates at a round 25%/year. New su­per­cars de­pre­ci­ate at around 10%/year. A few, de­pend­ing on type and num­bers pro­duced, start ap­pre­ci­at­ing al­most at the out­set. Th­ese how­ever, are not cars the av­er­age man in the street can af­ford. True in­vest­ment cars that ap­pre­ci­ate in value are clas­sic, vin­tage and veteran cars* and those that are scarce due to their age or pro­duc­tion num­bers. For the lucky few, it is of­ten not about price; it’s more about pas­sion and nos­tal­gia. It also has quite a lot to do with im­age. For most of us, with lit­tle cash to spare, it’s about re­turn on in­vest­ment.

Iron­i­cally, dur­ing an era of global re­ces­sion, the val­ues of clas­sic cars have risen and in some cat­e­gories, out­per­formed the re­li­able gold mar­ket. The HAGI in­dex, which mea­sures the per­for­mance of col­lectable clas­sic cars, out­per­formed gold last year by 4%. The as­set class even out­per­formed the broader S& P500 with an an­nual growth rate of around 12% com­pared to gold’s 2% growth rate over a 30-year pe­riod. Some­thing to think about, es­pe­cially if you have some spare change ly­ing around. The catch here though is that the HAGI tracks his­tor­i­cally ex­cep­tional cars and su­per­cars (See Fin­week’s cover story on su­per­cars dated 13 De­cem­ber). So, un­less you are War­ren Buf­fett (who fa­mously turned down a clas­sic car col­lec­tion to his later re­gret) or his ilk who are more con­cerned with pas­sion than with price, you are un­likely to be able to af­ford the ma­jor­ity of the cars cur­rently mea­sured on the HAGI.

But here’s the thing: Forty years on, some of the cars man­u­fac­tured in the Sev­en­ties are now be­com­ing prized col­lectibles. And be­cause they are not yet as rare as those man­u­fac­tured ear­lier, the costs of pur­chas­ing them are still rel­a­tively af­ford­able. A mod­ern clas­sic* is an ex­cel­lent start­ing point for would-be col­lec­tors or in­vestors, and a 40-year old car could end up be­ing an ap­pre­ci­at­ing rather than a de­pre­ci­at­ing as­set.

In 1972 less than R2 000 could buy you a “Peo­ple’s car”, the

VW Bee­tle. The Bee­tle was the most pro­duced (21.5m) and longestrun­ning sin­gle-de­sign ve­hi­cle world­wide. To­day that same ’72 ve­hi­cle – de­pend­ing on con­di­tion and en­gine – could cost be­tween R15 000 and R29 000. Given that many of t hese Bee­tles have been, or st i l l are,

daily- use cars, that’s a solid re­turn on in­vest­ment. The Ford Es­cort 1600 Sport falls in a sim­i­lar cat­e­gory as a daily-use car. The 1600 Sport was part of a fam­ily of Fords made fa­mous by “Su­per­van” Sarel van der Merwe who drove to five of his record 11 wins as SA Rally Driver Cham­pion in the BDA Es­cort. The 1600 Sport in the late Sev­en­ties cost a mere R4 700. Now that same car could net up to R80 000.

The Six­ties and Sev­en­ties pro­duced some truly iconic and even cultish cars, some of which are still seen on the roads to­day.. The ul­ti­mate hip­pie van, the VW Kombi, af­fec­tion­ately named the “Volk­sie Bus” in South Africa, was a world­wide sym­bol of this era. In 1956, be­ing the first year of pro­duc­tion in SA, a Kombi cost R1 348. Some of th­ese early pro­duc­tion ve­hi­cles can com­mand prices of up to R250 000 with a mid-Sev­en­ties Kombi fetch­ing prices of around R75 000. The twodoor

Kar­mann Ghia, based largely on Bee­tle me­chan­ics, was Volk­swa­gen’s an­swer to the two-seater sports car, and to­day an older Six­ties model has a value of around R100 000.

Among the young guns, the car of choice was the Alfa. Top of the list was the GTV or GT Ju­nior, a small two-door coupe with a rare – for that era – five-speed gear­box. Alfa

Alfa GT Ju­nior

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.