How does a classic car’s past influence its future?
How much does a former owner impact the market value of a collectable car? Obviously, there is no clear-cut answer but it is something that we have discussing this month whilst appraising two historic racing cars. The cars in question were both owned by the same team who assigned one to each of their drivers. One of the drivers went on to win a F1 World Drivers’ Championship, and one didn’t. So how much more in one worth than the other?
In regards to competitive cars there are variables which are quite clear cut and it is possible to add a degree of quantitative analysis to the assessment of the car. How many races did it win, where and who drove it are good starting points but there are also the qualitative aspects; originality, condition, and historical importance.
A Bonhams sale in May 2018 was an excellent example of how two F1 cars campaigned by the same driver with different levels of success can produce wildly different valuations. Senna’s first F1 car was the 1984 Toleman-Hart TG184 in which he came second in the Monaco Grand Prix of the same year. Toleman was a constructor for four years and the Monaco result was the highlight of their racing history; Senna’s Toleman sold for £1.4m. In the same sale Senna’s 1993 car that he won the Monaco Grand Prix in 1993 and secured his record breaking sixth Monaco victory, the McLaren MP4/8a, built by a constructor who is not only inextricably linked to F1 but also relevant today, sold for £3.7m.
In road going cars paying a premium based purely on prior ownership isn’t new and there have been some interesting results recently. In October 2019 RM Sothebys sold a 1984 Daimler Double Six which was delivered new for private use by Her Majesty, Queen, Elizabeth II. It sold for £80,500, approximately five times the going rate that we would expect for the very best examples of the same car at auction.
Cars formerly belonging to the actor Steve McQueen cars have long delivered results that are out of tune with the rest of the market. Automobile Magazine reported on the links between McQueen and market values far in excess of the norm. The 1968 Mustang GT 390 that was used for the filming of Bullitt sold at auction in January 2020 for $3.74m at a time when similar cars without the link to McQueen were selling for $43,000. In 2007 a 1963 Ferrari GT/L once owned by the actor sold for $2.31m (versus a market norm at the time of $700,000) and in 2014 a 1967 Ferrari 275 GTB/4 purchased new by McQueen sold for $10.2m which was approximately double the then market rate.
There is obviously a risk relating to continued relevancy when paying a premium for a car previously used by someone in the public eye. In motorsport circles a car formerly used by the likes of Clark, Schumacher, Hunt or Senna would no doubt stand the test of time better than perhaps a pop culture personality who may have limited celebrity status. As well as a risk of relevancy there is also the added concern of future reputational damage. In 2012 the estate of a recently deceased celebrity sold two cars at auction, a Rolls-Royce Corniche for £130,000 (£60,000 – £90,000 estimate) and a BMW Isetta for £22,000 (£5,000 – £8,000 estimate). In under three months it was suggested that the Corniche was “totally worthless” after allegations emerged about the “murky” past of the former owner.
There is definitely a worthy market premium to be paid based upon the names of former owners throughout the vehicle’s history, however it would seem that careful selection of vehicles with quantitative achievements would perhaps fare better over time. The vehicles can stand on their own merit rather than purely by association. An historic F1 car that won at Monaco will always command a premium, no matter what happens to the team or the driver that was associated with the win.
So why does this all matter? In the marketplace we are still seeing a good level of interest from customers keen to secure new purchases but finding a funding partner can be challenging in the current climate. There has been a big take up of the government’s payment holiday scheme within the industry and as a result lenders are sitting on lower than anticipated cash flow. This means that they are having to be more particular selecting the cars that they fund and the customers that they work with. Therefore, premiums attached to car sales which are paid purely on the strength of former owners is one of many that is being considered during the assessment of each proposal.