Vin­tage cars: A wise in­vest­ment?

All you need to know about in­vest­ing in a vin­tage beauty, told to us by an ex­pert

Business Traveller (India) - - OPINION - YO­HAN POONAWALLA, INDUSTRALIST, PHILANTROPIST AND AVID VIN­TAGE CAR COL­LEC­TOR

Ared 1962 Fer­rari 250 GTO was sold for a record break­ing $38 mil­lion at the an­nual Peb­ble Beach Con­cours d’El­e­gance show in Au­gust 2014. The fact that this was the high­est val­u­a­tion ever for a vin­tage car at an auc­tion speaks vol­umes for the vin­tage car in­dus­try and the prof­its one can reap by in­vest­ing in one of these mod­els.

There is no deny­ing the grow­ing in­ter­est in vin­tage cars among In­di­ans as well as mem­bers of the In­dian di­as­pora across the globe. This can largely be at­trib­uted to the ris­ing in­come lev­els of as­pir­ing buy­ers, who might not have been able to af­ford these cars pre­vi­ously. All this, de­spite the fact that main­te­nance and sourc­ing of parts re­mains a chal­lenge. Then there are other fac­tors like the 2013 lift­ing of re­stric­tions on the im­port of cars, thus paving the way for a ro­bust vin­tage car mar­ket in In­dia. Add to the mix, big car shows like the Cartier Con­cours d’El­e­gance and the 21 Gun Salute In­ter­na­tional Vin­tage Car Rally & Con­cours Show in Delhi, which have elicited con­sid­er­able in­ter­est among car own­ers and fu­elled the mar­ket.

As a diehard vin­tage car afi­cionado, peo­ple of­ten ask me for tips on how to invest in vin­tage cars, and if this in­vest­ment is even worth their while. My re­sponse is a ve­he­ment yes. From my ex­pe­ri­ence, here are a few fac­tors that should help you make an in­formed de­ci­sion, be­fore an in­vest­ment.

Are you pas­sion­ate enough? Pas­sion is the driv­ing force for anyone who wishes to en­ter the vin­tage car in­dus­try as an in­vestor. Take the time to study the car, the mode, the ori­gin and so on. Note that vin­tage cars are quite dif­fer­ent from rac­ing cars. It’s like com­par­ing mod­ern art to clas­sic masters. Which side of the camp you lie on is, of course, a per­sonal choice. Es­tab­lish whether you are pas­sion­ate and com­mit­ted enough be­fore mak­ing this in­vest­ment.

Look for au­then­tic­ity and rar­ity. Es­tab­lish­ing the ori­gins of a car be­gins with doc­u­men­ta­tion and it is vi­tal to have all records in place be­fore pur­chase. Ad­di­tion­ally, these doc­u­ments must be vet­ted by an ex­pert. Along with au­then­tic­ity, rar­ity plays a big role in this long term in­vest­ment — the rarer the car, the more valu­able it is. Broadly com­par­ing it to the lux­ury mar­ket — if Chanel makes only ten pieces of a par­tic­u­lar bag, the prices would be higher, as the com­mod­ity is lim­ited in na­ture. Keep in mind that any­thing that is eas­ily re­place­able will not yield as a long term in­vest­ment.

Look for mileage. I am of the opin­ion that lower mileage cars are usu­ally in bet­ter con­di­tion. Though this largely de­pends on col­lec­tors and pre­vi­ous own­ers. That said, there are vin­tage cars that have trav­elled the length of Europe and Africa, but are still in pris­tine con­di­tion, as they have been im­pec­ca­bly main­tained. There­fore, mileage plays a cru­cial role in un­der­stand­ing how the pre­vi­ous owner has main­tained the ve­hi­cle.

Get the right doc­u­men­ta­tion. Col­lect in­for­ma­tion re­lated to the ve­hi­cle’s pre­vi­ous owner, main­te­nance and jour­neys be­fore any pur­chase. This will give you an in­sight into how orig­i­nal the car re­ally is.

A pro tip from me — al­ways get the car as­sessed by an ex­pert be­fore sign­ing any doc­u­ments.

Re­search is never enough. While the last few years have seen a rise of in­vest­ment in vin­tage cars, one must keep in mind that it is a time con­sum­ing and costly process. Of­ten, parts of a car have to be sourced from its country of ori­gin. For in­stance, parts of a vin­tage Rolls-Royce or Bent­ley, are most likely to be found in Eng­land, and al­most never in In­dia. Also, spare no ex­pense at hir­ing a spe­cial­ist me­chanic who is in­her­ently skilled and knowl­edgable about vin­tage cars, so you know that your in­vest­ment is in good hands.

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