High-flying investors accelerate demand for automotive superstars

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  A 2016 Randall Grubb Falconer Dodici is displayed during The Quail. Investor demand for classic cars has soared along with returns. Michael Fiala /Reuters.

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  A Bugatti Chiron is driven off the main stage during The Quail. Top-end vehicles old and new are proving a lure for alternative investors. Michael Fiala / Reuters

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  A 1971 Lamborghini Miura P400 S is displayed during The Quail. Sale prices for some classic cars are hitting record highs regularly. Michael Fiala / Reuters

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  Bugatti supercars displayed during The Quail. Michael Fiala / Reuters

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  A 1934 Packard Chassis Coachbuilt Body is displayed during The Quail. Some of the classic cars sold at the Bonhams aution at the show made many millions of dirhams. Michael Fiala / Reuters

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  A Lamborghini Centenario Roadster at The Quail. Michael Fiala / Reuters

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  The Kodi 57 Enji concept car is displayed during The Quail. Michael Fiala / Reuters

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  A 1969 Lamborghini Miura P400 at The Quail. Michael Fiala / Reuters

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  Interior of a Pagani supercar at The Quail. Michael Fiala / Reuters

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  A 1959 Porsche 356A Sunroof Coupe at The Quail. Investor demand for classic cars is rising amid volatile markets and ultra-low interest rates. Michael Fiala / Reuters

Driven by ultra-low interest rates and volatile stocks, investors are turning ever more towards alternative places to park their cash – such as a 1930 Duesenberg Model J Town Cabriolet.

And for the motor connoisseur and investor alike, there was only one place to be at the weekend: The Quail, a car enthusiasts’ gathering in Carmel, California.

Alongside a jaw-dropping concours of classic cars, supercars and hypercars, those with an eye on, and wallet for, a four-wheeled gem had the opportunity to realise their dreams.

As part of the annual festival, the auctioneer Bonhams had numerous automotive beauties under the hammer. Some of the sales prices reflect the demand for top-end vehicles of yesteryear and today: a 2014 Ferrari LaFerrari sold for Dh17,081,273; a 2014 McLaren P1 went for Dh9,687,886; while older classics fared even better with a 1931 Bugatti Type 51 Grand Prix racing two seater managing an eye-watering Dh18,541,409; pipping a 1904 Mercedes-Simplex 28-32HP five-seat rear entrance Tonneau that fetched Dh13,002,163. The Duesenberg, meanwhile, came in at a much more reasonable (to some) Dh5,812,731.

This growing interest saw classic cars among the top performers in the year to end-March, the latest Knight Frank Luxury Investment Index (KFLII) shows.

While the KFLII index rose just 5 per cent over the year, the lowest annual increase since the first quarter of 2010, returns on classic cars jumped 17 per cent.

But over a five-year period, cars returned 161 per cent, eclipsing Britain’s FTSE-100 stock index, which was up 15 per cent since the start of 2011.

Investor interest in classic cars helped the Historic Automobile Group International’s (Hagi) Top Index to rise more than 500 per cent in 10 years, encouraging many to restore a rusting chassis to its former glory.

Hagi’s Dietrich Hatlapa says lower interest rates and monetary policy easing would support demand.

“People are taking the time to find the best examples. The spread between mediocre cars and very good cars has really opened up quite significantly … and for those, record prices are still being paid.”

But with future demand tough to call, Andrew Shirley, the author of the Knight Frank Wealth Report, strikes a note of caution.

“You should still only be buying the investments of passion that you will enjoy owning and will give you pleasure even if their value goes down – there is certainly no guarantee that values will continue to rise.”

While mere mortals at the auction with half a million dirhams in loose change were catered for – a 1955 Austin-Healey 100 BN1 went for just Dh418,108 – unsurprisingly perhaps, Mr Shirley neglects to mention that for the very best examples, buyers also need pockets deeper than the Mariana Trench.

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