In 2004 I bought a flat in London for £140k. It was a nice little one bed place, with a bit of passageway, laughingly referred to as a garden on the not-so-posh side of Clapham in London. Today ground floor flats on my old street are going to £500k. A staggering return one might think, which equates to profit of £360k or over 250%. However, if I’d bought a Ferrari in 2004, or more specifically a Ferrari 275 GTS, it would be worth just under £1.2m. Unfortunately I needed somewhere to live at the time and I do not think the bank would have loaned me that much money to get a supercar.
Yet the point remains; if you invest in the right car, your returns may be far greater than property, even in London. In fact, classic cars have been one of the best performing investments in the past decade with the Historic Automobile Group Index tracking returns of 465% during this time period. Now that trumps the banks 1.5%!
Yet, before you look covetously at your Grandma’s Fiesta, it still won’t be worth millions in 10 years’ time as it all depends on which car you choose. There is an almost undeterminable point at which cars stop going down in price and begin to rise again. Catching them at that moment is a skill based on considerable knowledge.
Companies like H R Owen, who is London’s premier supercars sales group, only deal in cars from companies like Ferrari and Bugatti, but they also have specialists who help their clients to buy “investment cars”. As returns from the financial institutions flat-line, more and more people are not borrowing money to buy these cars, they are moving their money out of one asset into another.
Buyers are looking for low production volume, low-mileage examples with meticulous service records. Celebrity connections or historical events also add to the value, especially in the case of racing cars. Fangio’s Mercedes-Benz W196 (the one he drove in his last F1 Championship) sold at auction for £17.5m in 2013.
A £10,000 Classic Opportunity.
You do not have to buy a Ferrari to end up in the money, there are other, far cheaper alternatives which might prove to be good investments, and you can have a bit of fun with them too. So, what should you get if you had £10,000, want to double your money in 8 years? We assume you already have a garage as cars kept outside do not perform as well.
A Rolls Royce Silver Shadow II
This stunning vehicle from the mid-1970s comes from a time when Rolls Royce could claim to be completely British. You can pick one up for about £10-12k, and the experts believe it will be worth at least £20k in 5 years’ time. Things to look out for, bubbling paint around the door handles.
An MX5 Mk1 with a hard top.
The idea that this is, or could be a classic actually makes me feel very old, however, to be fair to this whizzy little roadster, it was a classic from the day it was launched in 1989. You can pick up a Mark 1 with a hard top for under £7,000. Hang on to it and keep it carefully and you will find it could be worth double in 5-6 years’ time.
BMW 635 csi
The car the 1980’s Yuppie aspired to after they’d upgraded from their Golf GTIs. At the time they were deemed sleek, stunning and they could really shift. Today you can pick on up for as little as £3,000 but don’t! Spend that bit more and get a good one, with an excellent service history for around £10,000. These cars are on the cusp of increasing in value, with some magazines and auction houses already deeming them to be investment cars.
For just a little bit more…
For 20,000 the list becomes more focused on the elite marques.
Ferrari Mondial 3.0L V8
This mid-engine 3.0L V8, sports car with Ferrari performance but useable practicality of four seats, hang about, who buys a Ferrari with practicality in mind? Yet these “entry level” Ferraris of the 1980s are looking set to move ever upwards.
Aston Martin DB7s
The DB7 is my least favourite from this iconic car manufacturer because it is not as dynamic and edgie. However Aston Martin has been given Hollywood “Britishness” due to its association with the James Bond film franchise. The DB7 is a rather ordinary looking supercar. Yes it goes like stink, yes, it has DB on the front but it still isn’t the understated sex symbol of the earlier iterations. However, you can get one for under £20,000 and if you hang onto it for a while it will rise again.
Of course, we cannot guarantee that these cars will double in value over the next 5-10 years, but the signs are looking good. All investments can go up as well as down so if you are looking for a “punt” in which you can have a bit of fun, then some of these have to potential to be the answer to your dreams.Another Bond-mobile, although in reality you can’t drive them underwater! For this to turn into a money maker you will have to hang on to it for a bit longer than 5 years, but it is another beauty which will give you a lot of fun and has potential.