Classic Car investment fund is launched

The main national classic car magazines celebrated the end of 2009 with a sigh of relief: within a very real recession, the classic car market had held its own, unlike other dark times in the vintage automotive industry.

A trend was spotted: as long as cars were of immaculate condition and a certain rarity, there was always a buyer for them willing to pay a decent - and sometimes even indecent - amount of money.

The same pattern applied to 2010 trends; within the twelve months, a few classic cars made the spotlights: from the 1936 Bugatti 57SC (sold by private treaty in May 2010 for a very credible, if unconfirmed, $30m) to the 1950 DB2 Aston Martins sold between £513k and £550k at auctions in the UK.

The sheer fact that valuable cars over £500k are being traded at auctions – a notorious hotbed for people seeking a deal and hoping to pay less than the car is worth – is proof of the fact that classic cars are being seen as an investment worth testing even through bidding.

What of restoration, though? Whilst spotless examples of vintage engineering triumph may fetch astronomical prices, less than perfect models will achieve considerably less. There is scope for some sensible investment here: if the difference between a ‘time capsule’ Ferrari 365 Daytona (going for £300k) and another, less immaculate one (average price, £175k) is anything around £150k, surely it makes sense to invest in the latter and spend a more sensible amount of money to bring it up to the former’s splendour.

That, combined with the fact that immortal brands such as Rolls-Royce and Derby Bentley never ‘go out of fashion’, makes appointing specialist Fiennes Restoration as the champion of one’s vintage 20/25 hp or Bentley Vanden Plas a wise choice.

Restoring and maintaining cars of high intrinsic value is the best investment of all, if done sensitively and professionally. History, even for restoration, is a key word.

Over the years, a small number of investment funds have emerged, all working around the principle that there are vintage cars whose value is destined to increase, and willing to ‘invest’ in them for a return. As with everything, it is a question of wise choices. The 2009 and 2010 trends show that only the vintage metal rich in history and heritage withstands the blows of financial storms.

Recently, the media have featured news of the latest investment fund, created by a family-run business based in Zurich. The Classic Car Fund, as it is called, was launched on February 1 and has the backing of experts from Sotheby’s and Christie’s. Nick Mason, of Pink Floyd fame, has been asked to advise the board.

For more information, click on the link to the Financial News, (part of Dow Jones):