At South Downs Secure we’ll often find ourselves storing ‘Investment Cars’. Buying cars that will guarantee an increase in value is an extraordinarily difficult thing to do. Some owners are successful, and others might be disappointed in their financial gains. Nevertheless, they will still have a lot of fun!
In this week’s blog, I decided to write a piece about investment cars. Firstly, I want to clarify with a disclaimer that nothing written in this post constitutes investment advice. These are just my thoughts having spent time around cars for my entire life.
It was my late grandfather that ignited my love of cars. There was always a classic car or two in varying stages of restoration at his private workshop. As an aside, he may also be responsible for my desire for perfection, my grandfather’s workshop was always immaculate. I remember looking on with amazement at the perfect display of mechanical parts all neatly laid out on the bench labelled and positioned logically ready for assembly. In my late teens I found myself studying as an avionics aircraft engineer with the Royal Air Force. This further fuelled my passion for supercars and hypercars, in fact, anything designed to go fast. As manager of South Downs Secure, I’m in my element. It’s here that I can combine my passion for classic and supercars with my intrinsic pursuit of perfection.
Investment cars and how the market has changed in the last decade.
It has mainly been enthusiasts and a few savvy investors that drove the market before 2010. However, after the financial crash classic car prices started to increase beyond any expectations. By 2015 prices peaked with many new buyers getting involved purely for financial gain. This may have contributed to bursting the so-called bubble. The market has calmed down of late and moved to a more stable position. Once again, driven by true collectors and specialists. After the classic car rush what has become evident is that the unique and exclusive cars are still worth investing in, but only the experienced are seeking them out.
The last twelve months have been interesting, with Brexit concerns causing many investors to sit tight and ride the storm. This has made the market less buoyant, particularly with anything valued over £100k. In the current climate, these investment cars might take a little longer to sell. Don’t be too concerned though, U.S. and Hong Kong buyers are still very active taking advantage of a buyers market. In comparison, the lower end of the market £10k – £25k is strong with attentions focused on the Japanese market. Another area of the market showing signs of resurgence is good quality pre-war vehicles.
Investment cars that have made the most significant gains over the years.
Here, it would be easy to mention the Dino or the 250GT. But more interestingly we have seen some incredible gains on iconic 80’s and 90’s cars notably Cosworth and RS badged Fords. A worthy mention would also go to some of the same era Japanese cars such as the Nissan R34 GTR and the Toyota AE86.
There are always a few surprises in the mix…
The classic car investment market is at best unpredictable. I’m continually caught off guard with news of a recent auction sale far exceeding the guide price for a car completely off the radar. I guess this is what makes buying and enjoying these incredible machines so appealing as you just never know if you’ve bought the next big thing.
What’s hot and what’s not right now?
Again, I want to reiterate my disclaimer that nothing written in this post constitutes investment advice! Classic Japanese sports cars are on the rise. With unmolested quality examples becoming harder and harder to find this market is only set to rocket. Others worth keeping an eye on are E30 BMW M3’s and even the 325i. My personal favourite would be the normally aspirated V12’s with manual transmission such as the new Aston Martin Vantage V600.
Investment cars (and what I’d buy if I had a big wad of cash!)
I often get asked which car I would buy as a good investment, and it’s a tough question to answer as there are so many variables to consider. I’d need to think about whether I wanted a vintage car, a current classic, a supercar or a future classic. There are always personal and emotional considerations too.
For the sake of this article, I’ve managed to narrow it down to two cars based on a modest budget of £20k – £40K that I would enjoy and (in my humble opinion) would make a savvy investment. The first on my list would be the Audi RS6 C6. Only 1500 units were produced as a saloon, and with a 5.0L bi-turbo V10, you get supercar performance, incredible handling and a daily driver even in winter with Audi’s Quattro system. My second choice would be the Nissan 370Z Black Edition. The 3.7L V6 produced around 340 BHP and only 370 units were built. There are several alternative editions to the 370Z such as the Nurburgring Edition and the GT, but I think the limited run of the Black edition and the manual transmission option will make this a rare beast of the future.
Think beyond buying ‘the car’.
Once you’ve done your research and made your choice, it’s time to enjoy the car. But you will need to think about how best to store your investment. Most classic cars will fall victim to corrosion; the U.K. is a utopia for rust.
In my experience, one of the most misunderstood terms of recent years is ‘dry storage’. When you put your car into dry storage, you are essentially just keeping the rain off the car. Any storage without professional dehumidification & climate control may appear dry, but with average humidity in the UK of 80-90% (RH) your car might as well be parked outside in the rain.
To maintain the value of your car and avoid costly future repairs always use a professional humidity controlled storage facility. It may cost you a few extra pounds a week, but you will be maintaining the value of your investment and avoiding costly repairs bills in the future. Additionally, someone else takes care of the laborious side of owning your car, leaving you to enjoy it at its best.
My top tips if you’re looking for investment cars.
Invest mainly with your heart, but with a thoughtful consideration towards potential profits. Cars are made to be driven and enjoyed. So, buy a car that makes you happy. Don’t worry too much about what the market is buying or what’s selling for high profits. This route will only lead to disappointment. It really is all about you.
As a side note and buying tip be very wary of prior full restoration claims that don’t have extensive documentation and photos to back it up. Any reputable restoration workshop is proud to offer a substantial portfolio displaying the work they have painstakingly carried out over the last 12 months. All too often I have seen cars bought from an auction that claims to have been ‘fully restored’ only to start looking closely at the car and find a host of horrors or poorly executed repairs. Always do your research and if you’re not sure of its worth, take up the services of someone who can be sure.
Please Note: This article does not constitute financial or investment advice and merely represents the opinions of the author.