Is it really worth investing in classic cars?
According to the firm, cars (particularly classics) remain a popular investment channel for Saffers who want to grow their wealth.
New World Wealth notes that over the last 10 years, classic cars have gained momentum in terms of investment popularity. “Classic cars are a growing segment in the country,” NWW said. “This is because they form part of the category of luxury items that hold their value reasonably well over time.”
Other prominent examples of collectables that perform as well as classic car investments include fine art, fine wine and old stamps.
“Collectables do not include yachts, private jets and new cars, as these items are unlikely to hold their value,” the firm added. According to NWW, wealthy automotive enthusiasts in SA often partake in local classic car auctions in Johannesburg, Cape Town and Knysna.
Leon Strümpher, portfolio manager at Sanlam Private Wealth, explained that there have been numerous record-breaking auction sales to attest to classic car investment potential.
In 2017, Bonhams in the UK sold a 1995 McLaren F1 for $15.6 million, while a 1959 Ferrari 250GT California Spider LWB fetched $18 million at a RM Sotheby’s auction. The year’s biggest seller, though, was a 1956 Aston Martin DBR1, raced by Sir Stirling Moss, which attracted $22.5 million.
Local coachbuilder and classic car restoration expert, Dean van der Walt, says there are many rare metal classics in South Africa that can fetch good prices on auction, but the quality of these cars needs to be top-notch if buyers are to part with top dollar.
Van der Walt runs a specialist workshop in Johannesburg where he strips apart classics and restores them back to former glory, in some instances making them even more pristine than when they left the factory.
“Some of the cars that come into the shop can easily fetch R3 to R4 million, but that’s if they’re in good nick. We work on cars for customers that cost a few million on auction, and it’s shocking to see how some of the repairs are done on these classics,” he notes.
One of the cars in van der Walt’s workshop that’s in desperate need of love and attention is a 1950s Jaguar XK120. The car was bought by a vintage car connoisseur in South Africa and he had sent it for some body repairs at a panel shop. But, what looked like a fairly decent restoration on the surface was actually a hack job once van der Walt pulled the paint off the car.
“It was laden with filler and welds. We had to cut out entire sections of the front of the car and remake panels by hand. The process is intense, and time-consuming, but when done right, the customer appreciates the work that goes in because the car can fetch more money when sold again. They understand that when it comes to these classics, there’s no room for shoddy repair work or botched restorations,” he adds.
Van der Walt recommends getting up close and personal with any classic car you’re interested in; look under the mats, in the engine bays, and under the car for any signs of a makeshift repair.
“If you know someone that knows about metalwork, or who can tell a botched paint job from a really good one, take them with you when shopping for a classic as this can prevent you from buying a car that’s going to need further restorative work,” he says.
If you have a classic car that needs attention to its body you can get in touch with Van der Walt via social media. Search for English Wheel Fab and you’ll stumble on his pages where he lists all the cars he’s worked on in the past as well as current builds-in-progress.
Your future classic might be waiting for you at the next classic-car auction and, who knows, if you buy the right car it might be the best investment you ever make.