The quest for the vintage and classic car is increasing as collectors see it as alternative means of investment reports ADEDOYIN JOHNSON.
Cruising in his newly acquired Thunderbird Ford 1965 on Eko Bridge a few months ago, was the filmmaker, Kunle Afolayan. Afolayan caused not a little stir. Many people who saw the classic car loved the bird-like shape and wanted to know more. Such is the grip that any classic or vintage car has on anyone who appreciates its worth.
Afolayan’s interest in vintage cars began after he shot his famous film, October 1. As a history film, the storyline requires the feature of vehicles used during the 1960s. Hence, he went in search of people who have them in their garage.
In 2015, he was in the United States when he saw Mercedes Benz 1969 it was put up for sale. He acquired it and refurbished it. “It was my first classic car”, says Afolayan. “It could cost a lot, but it depends on where you are sourcing from.”
It is not only Afolayan who appreciates classic cars; the Royals do too.
In May, the Duke and Duchess of Sussex for their wedding evening reception on Saturday, which was hosted by The Prince of Wales, travelled in a Jaguar E-Type. The newlyweds moved from Windsor Castle to Frogmore House in a silver-blue Jaguar E-Type Concept Zero. The vehicle was originally manufactured in 1968 and was converted to electric power.
The Jaguar is one of the many classic vehicles treasured by the British royal family. Queen Elizabeth, otherwise called The Queen mother has been spotted in not a few herself. Some months ago, she was spotted driving herself in a Mini Cooper.
The Jaguar E-Type is what Afolayan says he is eyeing next. “I am a lover of a Jaguar, I wanted to get a Jaguar before the Thunderbird, but the deal didn’t work. I love the one used Prince Harry and his wife on their wedding day.”
In the general sense, a vintage vehicle is, referred to as an old automobile but for car enthusiasts and collectors, it is a car from the period of 1919 to 1930. Collectors have categorisation structures for ages of vehicles that show distinctions between antique cars, vintage cars, and classic cars. The classification criteria often vary, but significant car clubs maintain the consensus from country to country. Meanwhile, cars 20 years and older typically fall into the traditional class.
Historically, the vintage era in the automotive industry was a time of transition. Vintage car kicked off in 1919 as something of a rarity, and by the end of 1930, it has become commonplace. Automobile production at the end of this period was not matched again until the 1950s. However, as industrialisation progressed, new roads emerged, and modern cars were manufactured to accommodate the new realities. The ability of a vehicle to negotiate unpaved roads was no longer a prime consideration of automotive design. Cars became much more practical, convenient and comfortable during this period. Also, car heating, in-car radio, four-wheel braking from a standard foot pedal were introduced, as was the use of hydraulically actuated brakes. Near the end of the vintage era, the system of octane rating of fuel was added, allowing comparison between fuels.
More than 50 years later, the quest for vintage and classic is increasing as the rank of classic car collectors is swelling. For the rich, collecting car is a hobby. A person can have a fascination for a particular vehicle, make or history with one so seeks a particular make or model. There are many discreet collectors, taking a peep into their private collection is a rare privilege one won’t trade for anything in the world. In 2015, the value of classic cars increased by 17 per cent increase the appetite of big-time collectors.
Classic car collection is a past time activity for Afolayan. Whenever he is bored, he surfs the internet for the latest classic on sale. “I know like six to ten websites where I can see vintage vehicles. I keep myself busy admiring when it was time to get another one, I went to the state I saw an advert, and that’s how I was able to get Thunderbird Ford 1965. I will get more I am not in competition with anybody. I want to create my fashion and style. My house also depicts my style; some people will be wondering how come all I have are woods and stones all over my house, you will always see nature in everything I do.”
Finding such a car at an affordable price is not always hard, but the cost will depend on the condition or how the collector would like it restored. Usually, the less work required on a vehicle equates to a higher price, the more work required means a cheaper initial cost, but often more in the long run, and a person’s level of restoration experience plays an important part.
“I bought the first car for N1million, explains Afolayan, and I fixed it with N1million as well. If I want to sell now, I will sell it for N15 or N10million. People see it as a luxury car, but for me, I bought it for what you will buy an average utility vehicle that is good, that is the Thunderbird Ford 1965. I will not want to reveal how much I got Thunderbird Ford 1965. I have two classics in my collection.”
For most collectors, car collection is a rewarding investment. Most serious collectors hunt for a rare or exotic car. In June 2018, the holy grail of collector cars was officially driven into RM Sotheby’s Monterey auction on 24–25 August 2018 in Monterey. One of just 36 built, the 1962 Ferrari 250 GTO has proved itself an extreme competitor, claiming overall victory or 1st in class in nearly 300 races worldwide. It was estimated to have brought more than $48.4 million at auction; this GTO is the most valuable automobile ever offered for public sale.
The market for Ferrari 250 GTOs has continued to grow. It has been selling for high figures. In June 2018, German race car driver Christian Glaesel sold his 1963 Ferrari 250 GTO, chassis 4153, for about $70 million to $80 million in a private sale to WeatherTech floor mats founder David MacNeil. Also, four years ago, a Ferrari with chassis 3851 sold for $38.1 million at auction. It was the most expensive car to be auctioned at the time. Another private sale by American collector Paul Pappalardo in 2013 estimates his 250 GTO was sold for $52 million.
Ferrari expert and historian, Marcel Massini told CNBC in an interview that in the next two to three years, he expects a similar car to Ferrari 250 GTO chassis 4153 will sell for over $100 million. Some of the recent owners of 250 GTO are designer Ralph Lauren, Jon Shirley of Microsoft, Pink Floyd drummer Nick Mason, and Peter Sachs, grandson of Goldman Sachs founder Samuel Sachs. Other owners include hedge fund founders Tony and Lulu Wang, Rob Walton of Wal-Mart, and British businessman Sir Anthony Bamford.
“Collecting as an investment requires expertise beyond being an enthusiast who is collecting,” says Steve Okoronkwo, a car dealer. The standard of quality is far sophisticated, and you must consider a need for investment protection such as storage and maintenance. If you are a short-term investment collector, it is advisable to find a vehicle that has the market value that is expected to rise in the near foreseeable future. However, a long-term investment collector won’t be bothered to be with any short-term value, and he won’t seek a car that he can sell in a short-term, rather he will cosier the long-term value. He expects the value rise for some years. For that to happen, the car must have certain essential values. These are common to other investors or collectors of both short and long-term.”
Okoronkwo further explains that cars that were made in small numbers or limited editions are usually of a higher value although they can be more challenging to maintain.
“Certain year and model cars whose parts are no longer available may be difficult to maintain. Some of them are not common, so if you decide to change any component, you will be destroying their original condition. Other models were produced in large quantities may not be so, and their prices may not be inflated.”
Okoronkwo argues that market trend is an integral part of the price of a vintage car. “An almost original and in perfect shape model that was abundantly produced can be purchased for a higher price. A collector as an investor would have to know the potential market and have a belief that the future market will bring a return on investment,” he explains.
With the two cars in his collection currently worth millions of naira, Afolayan observes he doesn’t know the market rate in pricing his vehicles. “Vintage doesn’t depreciate if you take care of them. Owners of vintage cars take care of them like babies. Often, it is difficult to tie value, and those cars are stronger and heavier than the new cars. You don’t want to measure the impact when it hits the newly made cars because they were made with iron; the shocks are stronger.”
Besides, Afolayan says the first things he considers when acquiring a classic are the year and the state. “I always want to know if I can refurbish it. I want to know if it has been tampered with; some parts can’t change you don’t want to put Mercedes Benz engine in a Jaguar, for instance. I want to ensure all those things are still there. If you I am going to make any changes it will be a cosmetic change, there will be some holograms, a logo that depicts a brand and I don’t want that missing.”
However, for most collectors, determining the value of a vintage or classic car can be difficult, as many different factors can potentially influence the price. The age, condition, rarity, modifications, vehicle history and mileage can all affect a car’s value.
Fashion designer, Mudiagha Clement Enajemo, otherwise known as MUDI acquired a 1971 Peugeot 504 four years ago in France. He painted it a signature lemon green colour which makes it stand out of the crowd. He says classic cars put the owner in a class of his own. All the cars I have are unique. I love something that is unique. The Peugeot I got was the first to be produced. I enjoy driving it. The lemon green brought out the style and its uniqueness. If I had painted it white, it would have been like any other car. You must have style and a taste that will make people say, wow.”
Afolayan couldn’t help but agree with MUDI on the class, style, and taste that come with owning a classic car. “It puts you in a class of your own, says Afolayan. For anyone to want to acquire, for me, it means you remember where you are coming from you don’t just dwell in the present you also involved in the past, present, and future. I respect any collector; it’s not just a car for me; I collect electronics, art pieces. Many people will look at a vintage car, and they will appreciate it. It is surprising because I thought that children wouldn’t value it, but they do. I use my classics twice, or once a week it’s not regular. They are more of a weekend car, and I like to drive it myself.”