SMART SPEND

Cars don’t nec­es­sar­ily need to be money pits – choose the right clas­sic at the right time, and you too might turn a profit, ad­vises Kevin Hack­ett

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In­vest­ing in clas­sic cars

Even­tu­ally ev­ery bub­ble bursts, no mat­ter how long it’s been around, or how beau­ti­ful it might ap­pear. One day – and who knows when – like a Monty Python par­rot, it will cease to be.

Over the past few years, we have seen var­i­ous types of in­vest­ment port­fo­lios rise and fall. Not that long ago, the “dot­com bub­ble” burst, in­stantly turn­ing mul­ti­mil­lion­aires into pau­pers. We’ve seen the prices of oil and gold in­crease and then de­crease in dra­matic fash­ion, and we’ve watched peo­ple get rich and then poor a er amass­ing mas­sive prop­erty col­lec­tions.

One thing, how­ever, that has proved to be a fairly steady path to con­sis­tent profit over the past cou­ple of decades, is clas­sic cars. Ad­mit­tedly, even this seg­ment of the mar­ket has had its fair share of ups and downs in the past, par­tic­u­larly in the late 1980s, when ex­otic cars were viewed as the ul­ti­mate sym­bols of suc­cess in a cap­i­tal­ist world gone mad, and prices rock­eted.

What had pre­vi­ously been a mar­ket kept afloat by en­thu­si­asts was wrecked by spec­u­la­tors who only cared about the bot­tom line. “I saw [Fer­rari] Di­nos that had been ‘re­stored’ us­ing sec­tions of Pepsi cans,” says Nick Cartwright, a United King­dom-based spe­cial­ist in clas­sic Fer­raris. “One had its chas­sis tubes stuffed with old news­pa­pers and was painted up to look nice, but, in re­al­ity, it was rot­ten to the core.

“Many of these cars were bought as wrecks by un­scrupu­lous in­vestors, made to look pretty, and sold for vast prof­its to peo­ple who should have known bet­ter. To put them right again, own­ers ei­ther spent stag­ger­ing sums of money, or they just counted their losses and sold them for a frac­tion of what they’d bought them for.”

Those were crazy times and, in the early 1990s, the clas­sic car mar­ket went through a much-needed “cor­rec­tion”. It took an­other 20 years to get to the point where it’s at now, but the mar­ket cer­tainly seems dif­fer­ent – val­ues are ex­pe­ri­enc­ing a stead­ier rise, af­fected more by enthusiast col­lec­tors than those out to make a quick buck. Over the past cou­ple of years, the mar­ket has con­tin­ued to grow at a rate of be­tween eight and 10 per cent, and the past decade has seen a swell of ap­prox­i­mately 180 per cent in the val­ues of some clas­sic cars.

There are many dif­fer­ent fac­tors that af­fect any car’s value, but, when it comes to “mod­ern clas­sics” built from the 1970s on­wards, there is un­doubt­edly a nos­tal­gic bent in­volved. Car en­thu­si­asts who are now in their 40s and 50s, for in­stance, are o en in po­si­tions of fi­nan­cial se­cu­rity – the kids have grown up and le home, the mort­gage might have been paid off, and there may be a healthy dis­pos­able in­come to spend on that car you used to have on your bed­room wall.

In­evitably, some mod­els that had, up un­til quite re­cently, only ever been viewed by the mar­ket as “used cars”, have ex­pe­ri­enced spikes in in­ter­est and de­mand, with the best ex­am­ples now fetch­ing big money. We’re

see­ing dras­tic up­ward shi s in the val­ues of mod­els such as Fer­rari’s 308 and 328 (a 150 per cent rise over the past six years alone) and Porsche’s early 911 Turbo (an­other 150 per cent). Even hot hatches such as Peu­geot’s genre-defin­ing 205 GTI and the early Golf GTIs are mak­ing pre­vi­ously unimag­in­able sums at auc­tion. Never un­der­es­ti­mate the power of be­ing able to re­live your youth.

So if you’re in the UAE and fancy a dab­ble, what’s the best first step? How do you spend smart when it comes to buy­ing a ve­hi­cle that might be more than half a cen­tury old?

Gen­er­ally, the rarer the car, the more it will be worth, es­pe­cially if it’s an early ex­am­ple of a model that could be con­sid­ered a game changer. Val­ues of orig­i­nal Range Rovers and Audi Qu­at­tros are go­ing through the roof as the mo­tor­ing world comes to recog­nise their im­por­tance to the land­scape. Sig­nif­i­cant an­niver­saries also af­fect val­ues – ev­i­denced when Jaguar’s ma­ligned XJ220 turned 20 years old in 2012. Only 275 were ever made and, within months of the mo­tor­ing me­dia turn­ing a spot­light on this Jag’s his­tory, val­ues had in­creased by some 50 per cent – and they’ve kept on climb­ing over the past five years.

Orig­i­nal­ity is also key. One of 64 road-go­ing McLaren F1s has just sur­faced in Ja­pan, com­pletely un­used, with its in­te­rior still wrapped in pro­tec­tive paper, squir­relled away for 20 years a er its pa­tient owner paid ap­prox­i­mately Dh3.5 mil­lion for it. In­dus­try ex­perts are spec­u­lat­ing that, when it sells, it will go for more than Dh95 mil­lion. “With­out a doubt, this is one of the most im­por­tant road cars ever to be of­fered for sale,” says Tom Hartley Jr in Lon­don, who is sell­ing it on be­half of the anony­mous Ja­panese busi­ness­man, “and if pre­served, is highly likely to be the most valu­able road car in the world in years to come.”

You needn’t spend vast sums, though, to make a de­cent re­turn on a car. For sale in Dubai at the time of writ­ing is a 1992 Porsche 928 GTS – the most de­sir­able vari­ant of a model that has seen a sig­nif­i­cant resur­gence over the past cou­ple of years. It’s cov­ered 115,000km from new, and the ask­ing price is Dh80,000. To buy an equiv­a­lent ex­am­ple in Europe you’d need to spend nearly Dh260,000.

Air-cooled Porsche 911s are al­most al­ways a safe in­vest­ment – and the rarer they are, the bet­ter. Cur­rently there is a 1994 964-gen­er­a­tion Turbo avail­able in Dubai that’s show­ing 54,000km, for Dh920,000. Else­where, that car would be go­ing for about Dh1.1 mil­lion, and val­ues will only in­crease over time. There’s a Lam­borgh­ini Di­ablo VT Road­ster ad­ver­tised for Dh799,000, while in Ger­many, an iden­ti­cal car is listed at Dh1.2 mil­lion – the dis­par­i­ties be­tween coun­tries are o en even greater.

The laws of sup­ply and de­mand ap­ply here as much as any­where else in the world, so in a coun­try where there are more used Fer­raris on sale than Volvos, prices will nat­u­rally be more keen than they are in re­gions where these su­per­cars are in shorter sup­ply. The same can be said in re­verse: buy a car in Europe or in the United States, where there’s no short­age of mod­els like old Tri­umphs and Austin Healeys, then ship it over here, where they’re o en worth much more due to their scarcity.

As­syl Yacine, head of Dubai’s lead­ing clas­sic car deal­er­ship To­mini Clas­sics, has seen the mar­ket here shi ing over the past few years, with in­creas­ing ap­pre­ci­a­tion for older, col­lectible mod­els. “Peo­ple are start­ing to wake up to the ap­peal of Euro­pean clas­sics,” he says. “Amer­i­can and Ja­panese clas­sics have al­ways been in de­mand here, un­der­stand­ably, as those were the brands avail­able in the early days of this coun­try. But now, as more and more ex­pats are turn­ing to clas­sic cars as in­vest­ments rather than prop­erty, art and the like, prices for cer­tain mod­els are fall­ing into line with other coun­tries.”

It’s a mar­ket like any other– you need to be shrewd, fully clued-up and ready to spend when some­thing worth buy­ing ap­pears for sale. The clas­sic car bub­ble could burst at any mo­ment, ob­vi­ously, but there’s no sign of it do­ing so any­time soon. In the mean­time, es­pe­cially now that the tem­per­ate win­ter months are upon us, per­haps it’s time to take the plunge and put some money into some­thing you’ll ac­tu­ally en­joy while know­ing that, when the time comes to sell it, you’ll make a tidy re­turn. How many other in­vest­ments can you con­fi­dently say that about?

ZOOM­ING AHEAD Far le , val­ues of air-cooled Porsche 911s con­tinue to rise. Le , just 64 McLaren F1s were built for road use, and they are highly sought a er. Above, the Jaguar XJ220, once the world’s fastest pro­duc­tion car, turned 20 in 2012

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