Yohan Poonawalla, Industrialist, Philanthropist, and an avid car collector
A red 1962 Ferrari 250 GTO was sold for a record-breaking $38 million at the annual Pebble Beach Concours d’Elegance show in August 2014. The fact that this was the highest valuation ever for a vintage car at an auction speaks volumes for the vintage car industry and the profits one can reap by investing in one of these models.
There is no denying the growing interest in vintage cars among Indians as well as members of the Indian diaspora across the globe. This can largely be attributed to the rising income levels of aspiring buyers, who might not have been able to afford these cars previously. All this, despite the fact that maintenance and sourcing of parts remains a challenge. Then there are other factors like the 2013 lifting of restrictions on the import of cars, thus paving the way for a robust vintage car market in India. Add to the mix, big car shows like the Cartier Concours d’Elegance and the 21 Gun Salute International Vintage Car Rally & Concours Show in Delhi, which have elicited considerable interest among car owners and fuelled the market.
As a diehard vintage car aficionado, people often ask me for tips on how to invest in vintage cars, and if this investment is even worth their while. My response is a vehement yes. From my experience, here are a few factors that should help you make an informed decision, before an investment.
Are you passionate enough? Passion is the driving force for anyone who wishes to enter the vintage car industry as an investor. Take the time to study the car, the mode, the origin and so on. Note that vintage cars are quite different from racing cars. It’s like comparing modern art to classic masters. Which side of the camp you lie on is, of course, a personal choice. Establish whether you are passionate and committed enough before making this investment.
Look for authenticity and rarity. Establishing the origins of a car begins with documentation and it is vital to have all records in place before purchase. Additionally, these documents must be vetted by an expert. Along with authenticity, rarity plays a big role in this long term investment — the rarer the car, the more valuable it is. Broadly comparing it to the luxury market — if Chanel makes only ten pieces of a particular bag, the prices would be higher, as the commodity is limited in nature. Keep in mind that anything that is easily replaceable will not yield as a long term investment.
Look for mileage. I am of the opinion that lower mileage cars are usually in better condition. Though this largely depends on collectors and previous owners. That said, there are vintage cars that have travelled the length of Europe and Africa, but are still in pristine condition, as they have been impeccably maintained. Therefore, mileage plays a crucial role in understanding how the previous owner has maintained the vehicle.
Get the right documentation. Collect information related to the vehicle’s previous owner, maintenance and journeys before any purchase. This will give you an insight into how original the car really is.
A pro tip from me — always get the car assessed by an expert before signing any documents.
Research is never enough. While the last few years have seen a rise of investment in vintage cars, one must keep in mind that it is a time consuming and costly process. Often, parts of a car have to be sourced from its country of origin. For instance, parts of a vintage Rolls-Royce or Bentley, are most likely to be found in England, and almost never in India. Also, spare no expense at hiring a specialist mechanic who is inherently skilled and knowledgeable about vintage cars, so you know that your investment is in good hands.