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Make your marque

Speculators seeking unusual ways of investing their money have poured cash into vintage wine, polished up their collections of art and antiques, played the market for collectable toys or just stuck with rare stamps.

But for those looking to change up a gear and add a little va va voom to their portfolio, a classic car could perhaps be the perfect vehicle.

Next month, at the Leisure and Alternative Investment Show 2003 in London, classic car dealers will be showing their wares to potential investors.

One of these is Aston Workshop, a car dealer which restores Aston Martins for sale on the international market. Although its main customer base is classic car enthusiasts, the firm behind the alternative investment show, Mash Events, is keen to point out the potential financial benefits to the more adventurous investor.

Marketing manager Adam Taylor says: “There can be significant financial reward if owners decide to sell on. Aston Workshop sold an Aston Martin DB5 convertible to a Dutch customer three years ago for £100,000 which was then sold for £120,000 one year later. The car is now back for sale at the Aston Workshop for £160,000.”

A handsome profit for the owner but not for the casual investor with less financial muscle.

According to the experts, however, classic cars are increasingly bought and sold at a price more amenable to shallower pockets. Christie&#39s in London, for example, recently held an auction at which an old Mini was sold for £5,000 although it should be noted, however, that a Maclaren F1 Super-car fetched £600,000 on the same day. Even so, Christie&#39s does not recommend that people, especially those on low budgets, buy cars to sell for profit.

Mark Donaldson, a specialist in Christie&#39s motor car department, says: “We do not auction cars as an investment. The problem is that there is a finite number of top-level cars, which is where the money is made. The majority of the market thrives on enthusiasts. In fact, we get a lot people who have made their money on the stockmarket and are now looking to indulge their passion.”

Donaldson says Christie&#39s shuns cars such as MGBs or E-type Jaguars because too many remain in circulation. It also does not usually auction cars with a reserve price less than £10,000 unless they are a significant model or very rare.

Nevertheless, according to those who deal privately, outside the auction houses there are more opportunities for the investor willing to put in some hard work.

Nigel Edwards, a senior sales manager with a well-known asset management company, has bought and sold more than 60 classic cars in a period spanning 35 years. He says: “The chances of making money are pretty remote if you do not know what you are doing or at least have an interest. People like that get had because they have not done the research or have simply gone for a car they like the look of. Even if it is not a bad car, they will probably still end up paying top whack.”

Edwards says money was made far more easily in the late 1980s, which was a boom time for inv-estors looking for a quick profit as City traders with debts sold their classics at far less than market value. But he says profits can still be turned as long as buyers do their research and avoid cars in need of restoration, which he says is the quickest way to lose money.

As with more traditional investments, he advises keeping the car for a long period, especially if it was bought before any restoration was done.

Other problems facing the investor include the fact that, unlike a painting or vintage wine, vehicles have parts which can seize up when out of operation for even a short period of time. Investors will often drive the car, which means they need insurance. The good news here is that classic car insurance is cheap in relation to cover for modern cars, which is a real boon for the investor looking to enjoy the car while waiting for the market to pick up. But the insurer may require the car to be stored in a garage, which can be a big exp-ense, particularly for people in London.

Plan Invest joint managing director Mike Owen says: “We get people asking about classic cars from time to time. There are obviously cars holding their value and making money although, as we always say, there are no guarantees. It has not been a bad market and, hopefully, even if you lose money, you would have got a thrill out of the car.”

Owen says investors could perhaps regard classic cars as a complement to a conventional portfolio.

If the interest – and knowledge – are there, classic cars can prove a worthy alternative to the stockmarket.


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