Following Smith & Williamson’s first year as a sponsor of Goodwood Revival, we interviewed Bonham’s Chairman of the motoring department, James Knight, to help us understand why classic cars are increasingly popular as a hobby and investment.
What is interest like in the classic car market today?
This is the question I am most asked. I have been in the collectors’ motor car market since 1984 and have seen various ‘booms and busts’, the most notable one of the late 1980s/early 1990s. There are many aspects that contribute towards a drastic fluctuation in value, but the old economic equation of supply/demand is at its core.
Ultimately, we want those coming into the market to have an emotional attachment to the subject and not treat motor cars like stocks and shares, because I don’t want them behaving like stocks and shares. It is, and should be, a hobby for like minded enthusiasts, who congregate to share experiences and pass on vehicles to new owners with the confidence that the car will be loved and well-used. I recognise collectors do consider re-sale potential, but increase in value should be regarded as a benefit of the hobby.
How is the auction market for classic cars in the UK, Europe and the rest of the world?
Over the past 10 years, appreciation of the market has been consistent and steady, despite world economic turmoil. Globally, the collectors’ auction market is in good health and continues to perform well, with top prices still being achieved for the rarest and most important examples. This is primarily underpinned by traditional markets (Europe/USA), however collectors from Russia, China and the Middle East are beginning to explore opportunities more enthusiastically, bringing with them new tastes and trends.
Which type of car might perform best at auction today?
Certain periods, types and marques have shown good growth. For example, we have witnessed very early cars, the ‘veterans’, become more valuable; sports racing cars of the 1950s also; and famous marques such as Ferrari and Aston Martin have performed strongly.
Collectors, whatever their budget, are focussing on the best example they can buy for their money. So, a great Austin-Healey will make a surprisingly good price and a compromised Ferrari will attract limited interest.
Which sales have been the most spectacular recently, and why?
High profile venues such as Monaco, Pebble Beach and Goodwood are always a success. They attract the biggest collectors, who come to enjoy the world’s most important and glamorous motor sport events and to buy and sell the most significant classic cars. Our Quail Lodge Sale at Pebble Beach saw a McLaren F1 achieve US$15,620,000, a marque record and one of the most valuable cars sold at auction recently.
What makes a car an interesting long-term investment?
A great car, at whatever level, should have as many ticks against the following criteria as possible:
- Strong market’s perception of marque and model
If you are interested in re-sale value, a car that can boast good scores on the above four aspects, will usually attract interest in any climate.
If you were to start collecting, which model should you choose?
The one that appeals to you. We are, and should remain individuals with differing tastes. Open or closed; two or four seats; Veteran, Vintage, Post-Vintage or post-War; automatic or manual; French, German, British, American or Italian manufacturer. The combinations are almost endless. It would be a boring world if we all fancied the same car!
James Knight is an executive board director of Bonhams and chairman of the firm’s motoring department. He has specialised in the subject since 1984.
Alongside Smith & Williamson, Bonhams is a sponsor of Goodwood Revival 2018.
For more information on Bonhams auctions, please contact James Knight, 020 7468 5801, firstname.lastname@example.org
Investment does involve risk. The value of investments can go down as well as up. The investor may not receive back in total the original amount invested.