Classic cars have excelled as an investment asset class, with the value of the Historic Automobile Group International index rising by 16% in 2014. Yet it is more ‘modern’ vehicles that are able to grow in value and are attracting investors’ attention. Managing director, Chris Knowles spoke to the editor of Investment Week about which classic cars are best to invest in.
The full article can also be viewed here.
The classic car market is now worth more than £6bn in the UK, employing thousands across the country as demand increases. This growing market falls in line with the fact that more motorists are turning to classic cars as their vehicle of choice.
Owning a modern car can be frustrating, as its value depreciates rapidly within the first 12 months of ownership. Comparatively, a classic car is more likely to retain its value – it may actually increase if restored and maintained to a high standard. For some, the decision is driven by nostalgia, while for others it may be the desire to stand out from the crowd.
The Knight Frank Luxury Investment index recently noted that classic cars have beaten everything from art, watches, gold and coins over the past one, five, and 10 years (see chart, below).
The group noted that the value of the Historic Automobile Group International index has risen by an astounding 487% over the past 10 years and grew by 16% in 2014.
These strong returns have pricked the ears of many eager investors looking to benefit, but which classics are leading the way?
Choosing which classic car to invest in can prove costly – particularly as the market is becoming increasingly lucrative. Big name Ferraris and Lamborghinis are likely to set you back a hefty sum. Last year, for example, a 1962 Ferrari 250 GTO sold for $34.65m at auction – making it the most expensive car in history.
Owning such a pricey vehicle takes the fun out of classic car ownership, as there is no way you can take this million dollar supercar for a quick spin without instantly depreciating its value.
Yet classic car investment need not be so costly, as current market trends point favourably in the direction of more affordable ‘modern classics’.
Cars from the 1970s to the 1990s are beginning to make up ground on their predecessors, with classic Aston Martins, Ferraris and Porsches inevitably holding their own. If you are looking for a solid, long-term investment, however, one marque stands out among the sea of its competitors: Jaguar (see table, below).
When thinking of a classic Jaguar, we arguably think of the iconic E-Type, which continues to set investors back a large sum, without much of a return on investment. Its somewhat lesser known, younger siblings – the XJ-based models of the 1970s-1990s – are making a well-deserved resurgence, as their value begins to increase in line with growing demand.
The stand out investment of the moment would have to be the Jaguar XJS, which recently celebrated its 40th anniversary. Throughout its life, the XJS was a car that confounded critics, but won over enthusiasts and succeeded in returning its investment to the company.
Considered by many as an unworthy successor to the E-Type, it proved its worth by achieving a longer production run and outselling its predecessor by 43,000 cars. In recent times, the XJS has arguably become more desirable than ever, and even at 40, its price continues to soar.
Taking into account data collected from Classic Car Buyer, many XJS models in A1 condition have increased in value by up to five times since 2013, as seen below, and the XJS continues to be named as one of the hottest modern classics to invest in right now.
It is firstly important to consider that sellers – in particular garages and dealers – will have gone to some trouble to make the car look pristine on the outside. A perfect-looking car is often in much worse condition than one with visible rust, which has not yet been ‘tarted-up’.
As with all cars made of steel, the most important area to consider is rust, both the less visible painted areas and, more importantly, the hard-to-see underside and hidden cavities. The most expensive part of a restoration is usually the stripped re-spray. If you are careful in selecting a low-rust car, you could save around £10,000.
City cars are often in worse condition, as they are usually only used for shorter journeys. A seemingly low mileage vehicle may have completed a lot of shorter journeys, which can lead to worn out brakes, door hinges, leather and carpets.
If you need help sourcing a classic car or Jaguar XJS, or would like expert engineering advice, feel free to give us a call on 01635 30030. We have many years of experience restoring classic cars back to ‘better than new’ quality.
You want to ensure your recently purchased classic car lives up to your high expectations. In order to get it up to scratch, you might be considering customisation or restoration work. You may be sceptical, however, as some in the classic car community frown upon such customisation, branding it sacrilegious to a car’s original philosophy.
So, should customisation be considered as part of a restoration plan at all? Or should you bite the bullet and accept the car for what it is, even if it doesn’t meet your requirements? This post examines whether customisation should be embraced or avoided altogether.
There’s always the risk when carrying out a customisation project that the work may not befit the quality of the original vehicle. Shoddy workmanship will depreciate value, and may even cause some major engineering problems in the long term.
A new trend, coined ‘restomodding’, draws from the advancements in automobile technology to enhance the performance, comfort and safety of the classic car. At KWE, we refer to this as ‘re-engineering’. We use modern parts and materials to bring longer life, safety and performance to classic cars. The result is a classic that can be used for daily driving, a holiday adventure or transcontinental blast in comfortable excitement.
This doesn’t mean that all ‘restomods’ fulfil the brief, as many would argue that they have been tastelessly restored, leaving some classic motoring enthusiasts wincing. If you’re not looking for a Pimp My Ride-style abomination, it’s probably best to seek expert advice.
KWE Cars prides itself on its ability to restore classic Jaguars back to ‘better than new’ quality. With many years’ engineering experience, we are firm believers in restoring with your needs in mind – and we make sure we complete all work to the highest standard.
When it comes to customisation, we believe that it comes part and parcel with classic car ownership; it’s all about making sure the car suits your way of life. We focus on improving performance and making the vehicle more practical and comfortable for modern life – all without ruining that classic car magic that enthusiasts crave.
Through carefully tailored and bespoke solutions, our interior and exterior customisations allow for an enhanced driving experience. Leaving no stone unturned, we can restore all aspects of your classic car, from new leather seats and alloy wheels to reconditioning the engine.
We’ve worked on some interesting cars over the years, taking into account our customers’ varied requirements. We believe this stands testament to our ‘can do’ attitude and expertise.
We recently finished the restoration of a 1988 V12 convertible XJS, complete with a special request from its owner. The client likes to take his dog, a black Labrador named Pops, out with him when he drives his XJS, so needed somewhere flat in the back for him to sit. We removed the convertible luggage box in the cabin and replaced it with a flat floor. Pops now sits in full wool-trimmed luxury!
Other bespoke customisations include personalised leather seats and alloy wheels, state-of-the-art sound systems, and a wine rack in the boot for James May and Oz Clarke’s BBC series.
KWE customers can design and commission their own alloy wheels, select that perfect shade for the paintwork, customise leather interiors, and so on – we do all this with the highest degree of skill, ensuring that the finished result befits your high expectations.
Driving a classic car should be a privilege, and a carefully planned restoration can enhance this experience further. A quality, high finish customisation will embrace and sympathise with the craftsmanship of the era, building upon this to further enhance the pleasure that comes from owning a classic car.
If you’d like to see what we could do for your classic Jaguar, please visit the restoration services page on our website or get in touch. Call us on 01635 30030, ‘like’ us on Facebook and follow us on Twitter.
Many of our Jaguar XJS customers seek our advice on classic car insurance, and no wonder – it’s a rather different requirement from normal car insurance.
It’s important you consult a reputable broker who specialises in classic car insurance, in order to get the best possible cover for your classic car. We would recommend researching the following insurance companies, but there are, of course, other reputable brokers available:
We would highly recommend going for ‘Replacement Value’ insurance cover, in case of unexpected damage, such as a collision or accident as you drive your freshly-restored classic away from KWE! This helps to overcome issues relating to the ‘book’ value that insurers sometimes offer, which might be a tenth of what you’ve just spent.
The above insurers provide specialist advice, and really know their stuff when it comes to classic cars. While they might offer only a limited mileage policy (typically 6,000 miles per year), they should be fine with insuring the car for a more accurate replacement value. KWE can confirm the value of the works done for Insurers. In the end it is about establishing what it would cost to replace the car with one in similar condition. We take the view that substantial improvements such as an engine rebuild or bare-metal respray, or full suspension renewal would count at their cost value on top of the car’s intrinsic but non-restored market value. Items such as servicing, repairs and rust protection would not add to the replacement value.
So do inform the broker about the following if applicable:
The sort of things that would be excluded from your policy are as follows:
We recently completed work on a 1983 Jaguar XJ12 Series 3 Saloon. Prior to its full-scale makeover, this classic had been sitting in the sidelines at KWE for several years, awaiting a client to commission its restoration.
Last year, one of our existing customers enlisted our expertise to restore the model back to its former glory. The customer – a true XJ enthusiast – is already the proud owner of a KWE-restored 1991 XJS, featured on James May and Oz Clark’s BBC series, Oz and James’s Big Wine Adventure.
The body has been completely stripped and repainted in gloss black, with ‘biscuit’ Connolly hide throughout, full interior makeover, and new KWE suspension, making this classic a real head-turner.
To view the full extent of our work, and for a look inside our workshop, visit our build gallery.
A big thank you to everyone who visited our workshop this weekend for our open day, celebrating 40 years (in 2015) of the Jaguar XJS. The event was a great success, and we hope you enjoyed it as much as we did.
We were delighted to welcome customers old and new to our showroom to join in the birthday celebrations, many bringing along their prized XJS cars.
Here are a few news highlights from the classic car industry from the last couple of months…
Classic insurers say owners have unwittingly kept their cars’ agreed values at the same levels for years, despite recent price surges, particularly for 1970s and ’80s models.
According to Wikipedia, a Grand Tourer can be defined as: “a performance and luxury automobile capable of high speed or spirited long-distance driving. The most common format is a two-door coupé with either a two-seat or a 2+2 arrangement”.
The term derives from the Italian ‘gran turismo’, and is a tribute to the tradition of the grand tour, which sees GTs of various marques and models embarking on long-distance, high-speed journeys in both style and comfort.