How to jump-start your car collection
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Most new cars lose a third of their value as soon as you drive out of the dealership. But not all cars spend 10-15 years gradually depreciating before an inevitable date with the scrapheap in return for a nominal fee. Some are even worth more than you paid for them before you take your first drive, and others return from an initial dip to become valued at many times their original sticker price.
The right car can be a worthwhile investment, so here are some tips on what to look out for when creating your own vehicular nest egg.
Cars have been collectable since their inception over 100 years ago. Although the commodification of vehicles since the Ford Model T meant they ceased to be individual hand-built artforms, their value can behave like art. The value of an artwork often revolves around provenance, meaning the history behind it – the ability to prove that it was created by a famous artist.
For cars, this means a vehicle that was owned by or associated with someone famous or has a unique background. For example, any Jaguar XKSS is worth a fortune, but Steve McQueen’s one is now valued at $25 million.
Two of the key factors in a collector’s car are brand and rarity. Premium brands like Ferrari, Rolls Royce, Aston Martin, Bentley and Porsche can often produce collector’s items, but it’s not guaranteed. Everyday Porsche 911s from the late 1990s onwards are great cars, but only the special editions are likely to become collectable classics. The same can be said for Ferraris, with Speciale and Scuderia versions likely to appreciate where regular models don’t. On the other hand, a low volume modern vehicle such as the Pininfarina Battista – an electric hypercar capable of reaching 60mph in under 2 seconds – is likely to gain value, although it’s not for everyone’s pocket with a price of $2.2 million to begin with.
You also need to pay attention to the mileage and originality of the example. Obviously, a lower mileage means less use and therefore better condition. You might also come across the phrase “matching numbers”, which means all the major components are the ones shipped with the car from the factory, so the serial numbers match. A classic with a brand-new engine might drive better than it did, but it probably won’t be worth as much as one with its original motor. Similarly, modifications might improve handling, but are unlikely to provide appreciating value.
Starting a car collection is not something to rush into. Starting a car collection is not something to rush into. Investing in classics comes with risks and can take a significant investment. The cost of restoring cars to showroom condition can be high and you will need to also consider ongoing maintenance costs, storage expenses and insurance.
And like any buying decision, the more research you do, the more likely you are to find the right car. One of the best places to look out for potential classics is a website called The Market, which was acquired by auction house Bonhams a few months ago. This is like eBay for classic cars, but the listings have a lot more information and are professionally produced. Just like any auction, it’s best to spend plenty of time lurking to see how much vehicles generally go for before making any bids, so you know what a bargain looks like when you see one.
So-called “barn finds” can provide hidden value like buried treasure. These are vehicles that have been left to rot, either in an actual barn, in a garage, or even buried underground. These vehicles, if rare, might be worth a lot already in any state of disrepair, but usually require some financial input to restore before their value is released. But if they have been hidden for decades, they have a good chance of being original cars. One of the most famous “barn finds” was a 1925 Bugatti Type 22 Brescia, although it wasn’t found in a barn. It spent 75 years at the bottom of Lake Maggiore in Italy but once retrieved, sold for €260,500 at a Bonhams auction in 2010.
Here is a selection of collectables, both old and new, to give you a taste of what to look out for:
Even vehicles that were relatively mass produced can become lucrative classics. Perhaps the best example of a common premium car in its day that has been an appreciating classic for some years is the Jaguar E-Type. In total, over its three Series, about 72,000 Jaguar E-Types were built – hardly low volume. The first Series 1 cars cost £2,098. Now the cheapest E-Types you can buy are around £40,000 and an early Series 1 will be at least six figures – 50 times as much or more.
Porsche Cayman GT4
An example of a car that became collectable before deliveries began is the Porsche Cayman GT4 launched in 2015. Only around 500 of these came to the UK, and because of the exclusivity of ordering, if you weren’t already on that list, you’d need to buy one from somebody who was. The original list price was £64,451, and you’d pay more to buy a pre-order slot from someone who had one. Now the cheapest GT4s of this era are still pushing £70,000 and going up to £85,000 and over.
Porsche 964 Carrera RS
The Porsche 964 Carrera RS was the heir to the classic 911 RS 2.7 from 1973, which regularly sells for £250,000 or more. The 964 takes the same philosophy of losing creature comforts like power windows, rear seats, sound deadening and air conditioning to save weight (it was 135kg lighter than the Carrera 2), alongside a tuned engine with more power. You would think that taking things out would mean a lower price, but these cars still cost over £70,000 in 1992. Not long ago, you could pick one up for £20,000. Now you will pay at least £150,000, and prices continue to rise. Porsche has replicated the idea of removing weight and charging more with other models. Mint, low mileage Porsche 968 CS (Club Sport) editions are also appreciating. The Cayman R was a stripped-out Cayman S with a bit more power for more money, and its value is holding well too.
Ferrari 250 GTO
The Ferrari 250 GTO is perhaps the poster child of classic collectables and holds the record for the most expensive car ever sold at auction. A 1963 example is rumoured to have been acquired for $70 million in a private sale in 2018, and another example sold at auction earlier that year for $38 million. But the record for a public sale was chassis 3413GT, which garnered $48.4 million in August 2018. This is a car with an original price of $18,000. Obviously, you will need to be a multi-millionaire or billionaire to buy one now, but if you can, it may well prove to be a better investment than many stocks and shares.
Peugeot 205 GTI
Not all collectables need to be from premium brands. The Peugeot 205 GTI was the quintessential 1980s hot hatch – relatively cheap, stupidly quick, and highly likely to get you into trouble. The 1.6 version was launched at £6,245 in 1984, and now you can’t even find a high-mileage one for under £7,000. Low mileage examples go for over £20,000, and are likely to continue to appreciate as they become more and more rare.
Ford Escort Mark 2 RS2000
Many collectible cars obtain their value through association with racing or rallying, and the Ford Escort RS2000 is a case in point. Its heritage is from Ford’s rallying success with the first-generation Escort, memorialised in the Mexico special edition. The Mark 1 Escort RS1600 will set you back north of £70,000, with a concourse edition example likely to fetch over £100,000, more than 65 times the original price. The Mark 2 RS2000 cost £2,857 when new in 1975 and has a distinctive slanted front unlike other Escorts of the era. Now they cost at least £30,000 and will likely go up in value as fewer survive.
AVA Tara Browne AC Cobra
If you really want a priceless collector’s item, how about a car that is a one of a kind? The AVA Tara Browne AC Cobra, unveiled at the Salon Prive Concours d’Elegance in early September 2021, is a recreation of the Cobra owned by Tara Browne, heir to the Guinness fortune. He died in 1966 and his death is referred to in the Beatles song “A Day in the Life”. His Cobra’s iconic paintjob was created by Dudley Edwards of Binder, Edwards and Vaughn Design. Dudley Edwards also painted Paul McCartney’s “Magic Piano” and recreated the Tara Browne Cobra’s paint for the AVA version, which also happens to be fully electric and capable of devastating performance. It will be auctioned off towards the end of 2021, with a value that is likely to stretch into the hundreds of thousands. But such a unique vehicle, an artwork on wheels, seems sure to appreciate.
Spend for the future
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This article does not constitute personal advice and is not a personal recommendation on the specific products mentioned. If you’re not sure whether an investment of this type is right for you, please seek advice from suitable financial advisers who will be able to advise based on your personal circumstances. If you choose to invest, the value of your investment could be at risk and fall, so you could get back less than the amount you put in originally.
Investing in cars is not regulated by the Financial Conduct Authority.