Whereas modern cars are increasingly approaching something akin to technical perfection, becoming more and more alike in the process, the market for classic cars, those beauties of yesteryear, is booming. It seems that we long for a time when individual models could still be distinguished from one another, when each car had its own personality and playing Top Trumps still made sense. Okay, so that Model 180 Mercedes-Benz from our youth might have had its quirks, the Renault 4 was prone to rusting and the 911 Carrera 2.7 was more expensive to maintain than originally planned. But don’t we all love them even more today than we did back then? The fact that this longing can be monetized has not escaped anyone’s notice. The classic car market is populated, on the one hand, by enthusiasts and collectors who occasionally go all out with their Jaguar Mk II at Goodwood. On the other hand, there are the investors who – like all members of their guild – are primarily looking for the monetary advantage. For them, the most beautiful cars are vacuum-packed for preservation.
The classic car market is populated, on the one hand, by enthusiasts and collectors who occasionally go all out with their Jaguar Mk II at Goodwood. On the other hand, there are the investors who – like all members of their guild – are primarily looking for the monetary advantage.
One man who knows more about the market and about the past and the future of classic cars than anyone else is Simon Kidston. Kidston runs a thriving consulting firm for collectors of automotive rarities that he founded in Geneva fifteen years ago. Along with six employees, he advises clients to buy, sell or hold. Kidston’s website, kidston.com, features a couple of Lamborghini Miuras, an Aston Martin or two, several Gullwings, a 1973 Porsche 911 2.7 RS Touring and a 1954 Ferrari 500 Mondial Berlinetta, just to name a few. Only recently, he sold a street-legal 1999 Mercedes-Benz CLK GTR.
So it’s safe to assume that the man knows his way around the upscale used car market quite well. Reason enough for us to ask where the journey is headed and what we should look out for.
Mr. Kidston, how is the market for collector cars at the moment?
Simon Kidston: The classic car market peaked in approximately 2015, though it is fair to say that it has softened since then. We publish an index, much like the stock market index, called the K500. The “500” refers to the five hundred models that we identify as the most influential – not necessarily the most expensive, but the ones with the most impact. That goes from a GTO to a Golf GTI, both of which are influential in their own way.
And where does the index stand now?
The index is off by about ten percent compared to its peak at the moment. Typical cars like a Gullwing, a Ferrari GTB or a Porsche Carrera RS have all softened in value since 2017. Of course, there are exceptions: a Porsche 996 GT1 is significantly up since 2017, for example, or a McLaren F1. American pre-war cars, like a Buick or a Packard with relatively mundane saloon or, as the Americans would say, sedan coachwork, are not particularly in favor or fashionable right now. On the other hand, the person buying such a car is certainly buying something with intrinsic value, particularly if they buy something which is at the top of the range. But these are not the sort of cars that investors would buy and speculators gravitate towards. They tend to be bought by older people who buy them to do events and less as an investment. The Covid crisis this year has dramatically held back auctions, which tend to take place in conjunction with events.
Where and how are classic cars bought and sold anyway?
The deal-making flow has moved very much online or to private brokerage or indeed to sales between collectors. That has helped companies like ours, because we have seen a dramatic increase in the number of very high-value cars that we’re being asked to sell. Online, people would sell cars up to a maximum of three or four million dollars, but not beyond that. So cars in the ten to fifty million dollar bracket are being quietly sold under the radar rather than in public venues.
"We have seen a dramatic increase in the number of very high-value cars that we’re being asked to sell. Online, people would sell cars up to a maximum of three or four million dollars, but not beyond that. So cars in the ten to fifty million dollar bracket are being quietly sold under the radar rather than in public venues."
Can you put some hard numbers on that? How many cars are actually being sold?
That is impossible to say, because there is no record or central database of these sorts of transactions. But I would say that at the top end of the market four cars this year have transacted globally between fifty and a hundred million dollars. And I believe that there will be at least one or possibly two more transactions at that level before the end of the year. Some of those transactions are prompted by Brexit, because people who are based in Europe and who are buying English-registered cars want to get those cars imported into Europe before the end of the year, so they do not have to pay import taxes. Nobody really knows how the trade negotiations will affect the market. But it certainly looks as if Britain will become something like the Switzerland of the classic car market, an island in a much wider economic area.
It seems like the market is being controlled by professional investors with no interest in the actual car, but just in the value increase.
I think that is true. We all, myself included, regret the fact that cars are not enjoyed in the same way that they once were. I always love these stories of Ferrari GTOs that are used to drop off the kids at school or for a road trip across the country. Or how some people would enter their Gullwing in a race. They race replicas these days, but that is a whole other story. But the consequence of cars being bought by investors is that values have continued to increase. The positive to that is that the cars now receive the maintenance and care they deserve.
"If that person says, “Yes, I would love to drive down there and meet them and hear their stories,” then they are the right type of person."
The flip side is that some of these investors, not all, but some of them are not what I would call “car people”. To me, a good test of whether somebody is a real car person or not is if you tell them that the mechanic, the elderly mechanic that used to look after their GTO or whatever it might be, is now in a retirement home and does not have long to live. And he would love to meet the new owner of the car that they used to look after and tell them stories about it. If that person says, “Yes, I would love to drive down there and meet them and hear their stories,” then they are the right type of person. If they say, “Well, maybe another time,” then they are a different breed. But the reality is that if I have an enthusiast who will pay a hundred but an investor will pay one-twenty, it will be difficult to find someone who is willing to sell the car for less to the person who will use it more.
About Simon Kidston: Simon Home Kidston was born in 1967, the son of Commander Home Kidston, a pilot and motor racing driver. His uncle Glen Kidston was also an aviator and a member of the famous “Bentley Boys”. Kidston started his career in the car auction department at the Coys of Kensington auction house. He is a co-founder of the Brooks Europe auction house, which later became Bonhams Europe, and started his own company in Geneva in 2006. His clients include Ralph Lauren and designer Marc Newson. Since 2021 he is also a columnist for ramp.