The great race to buy veteran cars

By Stewart Skilbeck

When the classic car market gets headlines, they're usually to do with magical names such as Jaguar, Aston Martin, Ferrari and Lamborghini. But there is a hidden corner of the motoring world that is equally worthy of exploration - both for investing and for pleasure.

It is now some 120 years since Karl Benz drove those first faltering miles in a primitive three-wheeled, single-cylinder engined, 0.75hp vehicle that was to become known as a motor car'. It had a top speed of 8mph, but not only was that rarely achieved, but breaking required considerable skill. Significant advances were made in the design of the motor car between 1885 and 1900, and in Great Britain, 1896 was a landmark year: the act requiring a car to be preceded by a pedestrian carrying a red flag and restricting the top speed to 4mph was abolished. The abolition of this act is celebrated today each November by some 500 or so veteran cars, all built before 1905, driving from London to Brighton.

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This commemoration run first took place in 1927 and spawned a whole new hobby - collecting eligible motor cars. In 1930, at the end of the fourth Commemoration Run, the Veteran Car Club of Great Britain was founded - the aim being to preserve the earliest examples of motoring history, ephemera and artefacts, and to make these accessible to the public. In those early days, cars eligible (to be known as veteran' and to go on the London Brighton Veteran Car Run) were defined as those manufactured before 1905. Unlike the term classic cars', which nobody has yet satisfactorily defined, the term veteran car' has remained precisely defined.

Back in the 1930s, getting your hands on a Brighton-eligible car wasn't hard: they could be bought for as little as £25, with the most popular being the French-built De Dion Boutons. In the 1950s, however, the market started to move. A 1900 Benz would have cost you £250 (a significant figure then, but the same would cost you £80,000-£100,000 today) and the Montagu Motor Museum at Beaulieu (now the National Motor Museum) was founded. The value of the cars then reached a plateau in the 1970s, simply keeping pace with inflation for some years as the first generation of collectors died out.

Now, however, they are back in fashion. All veteran cars are now considered antique' - being at least 100 years old - and values have risen fast. Powerful four-cylinder cars capable of carrying four passengers to Brighton in reasonable time will command prices in the order of £250,000, with top marques such as Mercedes and Panhard-Levassor achieving more. Exceedingly rare eligible cars of 50hp or more are capable of exceeding £1m, as they are highly prized by the world's leading collectors. On the plus side, there is still some room in the market for those who are not super-rich: a 1902 De Dion Bouton was sold at auction in 1997 for £23,000 and seven years on a similar model fetched £38,000 at Bonhams.

So are veteran cars worth investing in today? The answer is that the general outlook is encouraging. The market is truly international and fuelled by high-quality events organised for such vehicles. A resurgence of interest has been sparked by a long-overdue revamp of the London to Brighton Veteran Car Run, for example, and over the last five years or so values have increased by approximately 25%. With new money continuing to come into this corner of the market, it seems probable that this upward trend in values will continue - don't forget that however high demand may go, the supply can never rise to meet it.

If you buy, you'll have to get used to driving a vehicle with primitive brakes and fragile mechanical components. But you should also have great fun and find the satisfaction of a complete journey is worth all the effort. You also get a few nice incentives. Not only do you get free road fund licences and attractive low-costspecialist insurance schemes, but there is also no capital gains tax to pay on any vehicles that take passengers: Gordon Brown can't get his hands on your profits.

The Veteran Car Club of Great Britain, based at Ashwell in Hertfordshire (01462-742818, www.vccofgb.co.uk), will always be happy to welcome and advise potential new owners or investors. Veteran cars also regularly come to the market with the major auction houses, whose specialists will likewise be on hand to advise. But beware, owning a veteran car is considered a disease, and an owner generally becomes a collector, so make sure you've got room for at least two in your garage.

Stewart Skilbeck is a director of Bonhams Motor Car Department (01757-638894), a member of the Veteran Car Club of Great Britain, the Society of Automotive Historians and an addicted veteran car owner.