What makes classic cars the perfect investment?
Philip Kantor, head of European motor cars at Bonhams, offers an insight into the collector's motor car market
The past ten years has seen steady appreciation in classic cars and, since the 2007-08 global financial crisis, activity in this arena has become more prominent than ever – its strength underpinned by traditional markets in Europe and the USA.
And there are certainly benefits to investing your money in a tangible asset like a motor car. Currency values are constantly changing, so if you have a car that appeals to a truly international audience, you can sell to the strongest market – meaning you are not fixed on a specific currency.
I have been following the collectors' motor car market since the late 1970s and have seen various peaks and troughs, but we don't want people to treat motor cars like stocks and shares. It is – and should be – a hobby for like-minded enthusiasts and those nostalgic of days gone by.
A car's increase in value is regarded as a by-product, albeit a beneficial one, of the passion for the product. Collectors want stability, and with stability comes confidence to buy and sell
Obviously collectors do consider re-sale potential, but a car's increase in value is regarded as a by-product, albeit a beneficial one, of the passion for the product. Collectors want stability and with stability comes confidence to sell and to buy – which is the situation we find ourselves in. Certain periods, types and marques have shown good growth. For example, we've witnessed cars that provide 'entry tickets' to the best historic events grow in demand, and therefore value. This ranges from veterans on the London to Brighton Run to endurance racers at Le Mans Classic. As for blue-chip motor cars, it's like the fine art market – there's always top money for the best. We saw it at Goodwood Festival of Speed in 2013 when Bonhams set the world record for the highest price of a car sold at auction, with the 1954 ex-Fangio Mercedes-Benz W196 going for £19.6m.
In addition, famous marques, particularly when they are still 'alive', such as Ferrari and Aston Martin, have been, and remain, strong. But a great car – at whatever level – is always marked against the following: the market's perception of marque and model, condition, originality and provenance. If you have a motor car that can boast good scores on the above four aspects, it is a saleable commodity in any climate.
Hoping to improve on 2013's success, Bonhams sold the rare 1954 ex-works Ferrari 375-Plus at the following year's Goodwood Festival. Conceived at the Maranello factory as its ultimate competition weapon for 1954, the car was one of five produced – another was a road-going cabriolet for Belgium's King Leopold II. The car up for auction was driven by the likes of Umberto Maglioli and José Froilán González at events such as the 24 Heures du Mans, the Mille Miglia and Silverstone Classic. It was the fastest sports racing car of its time and is complete with an established provenance, continuous history and undisputed identity. It ticks all the boxes for the perfect collectors' car.
But regardless of what any specialist says, the best cars to invest in are the ones that appeal to the individual. Open or closed; veteran or post-war; French, German, British or American – there is most definitely a classic car to suit all tastes.Enjoy them, and if you end up with a profit at the end of the day then that's the bonus.
For more information, see: bonhams.com