The Insiders Market Report: As Good as Gold?
With annual inflation closing in at 9% and financial markets stalling I have been half considering liquidising my own portfolio and instead adding to my garage collection. I’ve been giving some thought to what I would add and making a criteria list. It would be a race rather than a road car, usable across several racing series, and a model that has good parts availability.
I sold my MGB FIA race car 18 months ago which I used in the popular Equipe Classic Racing GTS series, which fitted the bill perfectly. Prices of such cars that hold value and can be used on track by enthusiastic amateurs have been slowly creeping up in recent years, buoyed by the growing interest in amateur competition and the increasing cost of changing up to a faster car. Not so long ago, to commission a new build of such a car by a marque specialist would have cost somewhere around £40,000, but in today’s market, the figure is now closer to £60,000. This increase in pricing has fed through to the used market.
As an entry point to historic motorsport, cars such as the MGB or TR4 are relatively accessible and so it would make sense that an increase in sector interest would have a direct correlation to an increase in prices. At the other end of the spectrum, we are seeing stability, if not out and out runaway results.
Anecdotally, I have always felt that cars such as the Bentley Blower are good stores of value and despite the high entry price the supply v demand equilibrium has always been in balance, meaning that the few cars that come to the market often meet willing buyers. Last year provided a single data point for the rarefied and international Blower Bentley market.
Chassis MS 3928 sold at Pebble Beach in 2008 for $1.76m (Gooding & Co, lot 114), and last year, also with Gooding & Co (lot 153) it was listed again with a guide price of $3m-$4m. This time it failed to sell but achieved a high bid of $2.6m which represents a compounding annual return of 3.05% since the purchase in 2008. The missed estimate could suggest that my faith, and that of the auction house, in the Blower Bentley market was perhaps overestimated, but if it had been purchased purely as a value store, it delivered.
The obvious downside to using vehicles as a value store is the inherent holding costs. Unlike financial instruments cars need to be stored, maintained, transported, and insured, which creates a commitment of both time and money just to keep them in a solid state. There is also the issue of parts availability which even within MGB circles is beginning to become an issue for key items such as engine blocks. And, as shown by the Gooding & Co example, they are not certain liquid assets.
I’ve recently found myself drawn to the unusual – the MGB engined Elva Courier for one and cars from the ‘70s that until recently were firmly in the ‘unloved’ category. Ford Capri, Triumph Dolomite, and Rover SD1 were monikers which were of no interest to the majority of amateur racers ten years ago (they weren’t really of interest to anybody in all honesty) and I have watched from the sidelines as races such as the Gerry Marshall and Tony Dron Trophy series have grown in popularity. With it, the prices of suitable cars with which to enter these races also began to increase and this has led me to the point of view that the values of race cars are inherently linked to the usability and access to racing that they offer.
When I started competing in the Equipe Classic Racing series I was one of a mere 14 competitors, now I’m one of 240. I hope that the enthusiasm for the pasttime remains, and with it the buoyancy of the underlying vehicle market, as it is positive news not only for the owners of such cars but also for the industries that rely upon them. In hindsight, I probably shouldn’t have sold my MGB 18 months ago, but it does at least allow me to practice what I preach and buy something for the right reasons – to enjoy, compete and cherish.
There may even be a trophy in there somewhere.