When the private bank that counts the Queen amongst its customers makes an announcement about how various investments have performed over the last few years, the financial world listens with interest. And when that same bank cites classic cars as the finest investment of all, plenty more of us take notice.
That was the case last week when Coutts announced to the world that, between the start of 2005 and the middle of last year, so-called ‘passion assets’ dramatically outperformed global stock markets. And if you’re wondering what a ‘passion asset’ is, they include classic cars, classic watches and jewellery.
According to a report in The Telegraph, classic cars were the best-performing alternative investment, returning a 257 per cent increase during the seven-and-a-half-year period in question, while the value of classic watches and jewellery surged by 176 and 146 per cent respectively. These were the star performers in Coutts’ new Objects of Desire Index, which compares the investment achievements of 15 different asset classes – including stamps and coins, collectable musical instruments and ‘trophy’ property.
This news from Coutts follows on from a report last year, which suggested that classic cars were outperforming gold in terms of investment potential. But Coutts has also made the point that buying a classic car isn’t just about its investment potential. Mohammad Kamal Syed, head of strategic solutions at the bank, was quoted as saying: “For many people, profit is furthest from their mind”, adding that collecting fine art or classic cars gave owners an opportunity to “bond with like-minded people in an elite network”.
If belonging to an elite network sounds a million miles away from you being a member of a local classic car club, you’d be right. Coutts, after all, is a bank that offers its services only to individuals with at least £1m in investable assets. However, as most Torque Monkey’s will be aware, the more affordable end of the classic car market has also seen an escalation in values over the last seven or eight years, with scores of once keenly-priced classics and sports cars now being beyond the reach of many of us.
WATCH OUT FOR FAKES
As classic vehicle values rise, so the market attracts unscrupulous fakers, desperate to make a healthy – and highly illegal – profit via their fraudulent activity. And nowhere is this more prevalent than at the upper end of the classic car price range, with no shortage of standard Porsche 911s, for example, being transformed into RS lookalikes. But it’s a certain MG from the ‘Thirties that has become the most ‘copied’ car of all, according to a Bloomberg Businessweek article published two weeks ago:
“In the ‘Thirties, British sports car maker MG manufactured exactly 33 of its vaunted K3 open-top race cars”, reported Businessweek. “But if you want to buy one today, there are more than 100 to choose from. No, the defunct manufacturer didn’t restart production. The tripling of the K3 fleet is part of the booming trade in fake antique autos as soaring prices for classic cars spur sophisticated counterfeits.”
The same article quoted Historica Selecta, a consulting company that specialises in classic vehicles, which claims that heated demand from wealthy investors created a seven-fold increase in classic car auction values over the last decade. And that means big profits for the world’s best fakers, explained Adolfo Orsi, president of Historica Selecta:
“People with a lot of money prefer to have a classic car in the garage than money in the bank. That’s one reason criminals are going to unprecedented lengths to grab a piece of the action. Sophisticated forgers have been known to buy old screws and washers and leave reproduced frames out in fields to weather. When there is a lot of money, there are fakes. In today’s world, it is possible to replicate everything.”
Even at the slightly more affordable end of the market, there have been long-standing issues with fakes, as many potential buyers of Cortina 1600Es, Mini Coopers and RS- and Mexico-spec Escorts have found to their peril over the years. But according to Karl Fasulo, proprietor of KGF Classic Cars there’s plenty that the buyer can do to ensure the authenticity of any car they’re interested in:
“We’ve never had any bad experiences with fakes ourselves”, Karl told CCB. “But we always carry out every relevant check before buying stock – including thoroughly investigating the car’s history and paperwork, verifying it with the relevant club or register, talking with industry experts on that particular model and making sure the car is exactly what the vendor claims it to be.”
Karl makes the point that buying from a professional dealer who has already carried out this research and investigation is the simplest way of acquiring any rare or historically interesting car, not least because there’s more legal back-up in the event of a discrepancy. But during the years he’s been trading, he’s yet to be offered a fake classic: “There are some very high quality replicas out there, which is fine – just as long as the Cobra or Mexico lookalike being advertised is described honestly as a replica.”
WHAT DO YOU THINK?
Have you been offered a fake classic, or seen one advertised that isn’t what its vendor claims it to be? Whatever your experiences, leave a comment below.