The real McCoy? The problem of fake classic cars

We delve into the murky world of replica classic cars and asks three experts what can be done to prove authenticity before collectors part with huge sums of money.

Genuine article: a real Ferrari 275 GTB, one of the models that has been the subject of attempted fakes. Courtesy RM Auctions
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According to a recent study, classic cars are now the single best luxury item to invest in. Better than jewellery. Better than art. Better, even, than gold. On average, a sought-after classic car bought 10 years ago has grown in value by 469 per cent today, according to the Knight Frank Luxury Investment Index, which monitors the capital appreciation of luxury goods.

If you have one of those sought-after classics, then this is excellent news. If you don’t, well, hard cheese. Unless … what if you were to try to pull a fast one? What if you were to smudge a few documents; embellish a few details? What if you were to build a replica classic car and try to pass it off as the real thing?

Such an undertaking isn’t a small task. But consider that there are vintage Ferraris worth upwards of US$50 million (Dh183.7m) – you start to see why less scrupulous folk might go to considerable effort to fool potential customers.

And they do. Those involved in the classic-car industry are well aware of the potential for fraud, although how widespread it is depends on whom you speak to. The auction houses, who sell classic cars on behalf of their owners, are predictably confident that they’ve got a handle on the issue. Chris Routledge is the managing partner of Coys, one of Britain’s top classic-car auction houses. He believes that fakery, while once a genuine problem, is now all but ­impossible.

“Any car nowadays of any strong value is a documented piece, a bit like a painting,” he explains. “Most cars have an eminently traceable provenance and very documented history. If someone presents me with a certain type of Ferrari, I will be able to trace that car’s history. We may have handled it in the past, or I can use, through one of the enthusiast websites, a forensic analysis of every important Ferrari that exists today. If it has had a significant accident or it’s been burnt to death, had a new chassis, that will be known. Then I or a buyer can make a judgement about exactly what they’re buying.”

Marcel Massini is one of the world’s leading experts on classic Ferraris, and acts as a consultant to private buyers and auction houses. He says attempted swindles do still occur.

“It happens regularly, because the more money involved, the more attractive it is for crooks. Keep in mind that all classic-car prices have gone up in the last 10 years, some of them really extensively, especially in the Ferrari world. This is why it is so super-important to record and make sure that the continuous history of a particular car is really well-known. As soon as you have a car that has a gap in the history, you just don’t know what happened to it.”

In this kind of situation, due diligence is called for. For Routledge, that counts as part of his job description. “I’ve got some cars at an auction in December that haven’t been in the marketplace for 35 to 40 years,” he says. “No one has seen them. The first thing buyers will say is: ‘What have you actually got there?’

“We’ve got a procedure. We’ve traced every day of those cars’ lives, and we’ve proved that they are those cars. It’s a responsibility and it’s part of our daily ritual – and so it should be.”

Massini recalls a recent case in France involving what, at first glance, appeared to be a 1967 Ferrari 275 GTB/4, advertised for sale with a particular chassis number. The number matched official records. But all was not what as it seemed.

“This particular car, in the early 70s, was in a very bad crash and completely burnt out,” he says. “The chassis no longer exists. In the 80s, someone in England used the chassis from a different Ferrari model and built a brand new GTB/4 on it, using the identity of the old car that was destroyed in 1970.”

The fraud was discovered by meticulously studying the documented history of the car, combined with a very close physical inspection, which revealed incorrect component numbers that didn’t match up with each other.

“It’s not a 275 GTB/4,” Marcel explains. “It is a 330 GT chassis that has been extensively modified, with a spare engine that had an unnumbered engine block, which was restamped to reflect the number of the original car. The body is brand new and there is a gap in the history of the car of 15 to 20 years.

“You cannot build a car like this overnight. But a genuine car would be worth $3.5m to $4m. The owner of this particular car today, which is a complete fake, offers it around the world as the real car, which is complete nonsense. Either he bought it without knowing what it was or he is trying to find a victim.”

For a car to be deemed fraudulent, it doesn’t have to be such a labour-intensive project of deception. It may be a completely genuine Ferrari, with matching parts numbers. But a low-mileage classic Ferrari is worth more than a high-mileage one – when you get into the rare cars, the differences can be huge.

“There are people out there faking warranty booklets just to say they only had 2,000 miles on the car, when in fact they had 20,000 miles,” says Massini. “They’re using reprinted warranty books and recreating the stamps, signatures and dates of services. I recently inspected a 288 GTO, which was described as having 2,000 miles. Fortunately, my customer didn’t buy the car, because I flew around the world and it really turned out to be a 20,000-mile car.

“I’m not saying that the car was not a particularly good machine, but it makes a huge price difference; in this particular case, almost a million dollars.”

One of the chief weapons in combating fraud has been the internet. Records used to determine a car’s identity have existed for decades with manufacturers, owners’ clubs and enthusiasts, but the digital revolution has allowed these to be unified and more easily accessible.

“The communication of knowledge between experts worldwide, combined with the rise in values and the massive increase in interest in historic cars globally, has meant a whole new culture has descended on the old car world in the last 15 years that didn’t exist before,” says ­Routledge.

The problem is not just confined to cars. Classic motorcycle values are also on the up, and the same problems can occur. Ben Walker is the department director of collector motorcycles at the auction house Bonhams.

“The thing about motorcycles is that machines do get damaged and engines and frames get swapped or replaced,” he explains. “There are bikes that are built up from parts – someone will have a frame and an engine and put them together. It could be a genuine frame with a genuine engine – with correct and original factory stamps that haven’t been ground off and restamped – but the engine is not original to the frame. So it’s a compromised bike and people adjust their price when ­bidding.”

Fraud occurs when people try to make out that these “bitsa” bikes are actually original, with parts numbers that match those that came out of the factory.

“What can be problematic is if someone restamps an engine or frame to make it a matching numbers machine,” Walker explains. “There is of course an increase in value if it is a matching numbers motorcycle, sometimes by 30 to 40 per cent.”

As with cars, Walker believes modern technology means frauds committed today are rarer than in the past, although dodgy dealings from long ago can still affect purchases today.

“If we go back 20 years, the systems were different,” he says. “It was much more of a problem and there are examples that are a legacy of that still popping up. Those are the bikes that we try to catch.

“Out of the 700 to 800 bikes that we sell in the UK that make it to auction, we’re offered another 100 to 150 bikes a year that we don’t accept for whatever reason. We might not be happy with the history of the machine. But that’s probably fewer than 10 bikes a year.”

Routledge is confident that the current system of checks and balances, combined with the scrutiny that accompanies high values, makes it almost impossible for significant fraud to occur today.
“There are instances where someone might be economical with the truth, but rarely do you get circumstances, in 2014, where people outright try to pull the wool over your eyes,” he says. “They cannot get away with it – there’s too much due diligence on these motor cars, both historically and forensically in terms of companies like ourselves or Bonhams, who will know what these cars are all about.”

But Massini isn’t so sure. “There is never enough effort undertaken to catch people doing this,” he says. “The problem is that there are really very few experts that are educated enough and experienced enough, with all the right connections. It’s very difficult to get proper ­documentation.

“The auction houses cannot necessarily do the due diligence, because it’s not really their job. They have to rely on the description in most cases.”

The number-one message from all three experts is that buyers should do their homework.

“What’s becoming far more prevalent now is the buyer wanting to have full history and documentation,” says Walker. “If a vehicle only has partial history, it is not as desirable as a machine that has full history from when it left the factory. You can clearly see the increase in value and interest for that type of ­machine.”

“When these cars were worth $500, they could be anything you wanted them to be, and nobody cared,” says Routledge. “But when they’re worth $5 million, a whole new set of preferences kick in.”

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