Driven: Peak Performance

Whether for the love of motoring or the love of money, the virtues of buying a specialist car are manifold. Barnaby Dracup finds out what’s hot and what’s not in the supercar market.

The freedom of the open road in the car of their desires is surely every motoring enthusiast’s dream, whether driven by the beautiful, distinctive lines of a classic car or the speed and power of a hi-tech modern performance car.

Mac Mair is company director at Sterling Performance Cars, a family-owned business renowned in the trade for supplying high-spec modern vehicles to discerning customers. He told CALIBRE the appeal of owning a supercar was that it made a statement. He added: “It’s a bit like buying a high-end watch or designer clothes, the clients that we deal with want to go out and make a statement. For them it’s a sign of success and that normally involves having the complete package; the house, the watch and a car to match.”

Some of the world’s finest motoring connoisseurs look to Tom Hartley, owner of the world-famous Hartley estate in Derbyshire, a 40-acre site purpose built for the showing and selling of supercars. He also believes buyers of classic cars and supercars want to mark their success and a life of hard work. He said: “It’s a reward to themselves as a symbol of their success, they’ve worked hard and it’s a way of showing what they’ve achieved.”

Buying a supercar can be financially as well as personally rewarding, with many makes, marques and models historically bringing returns on investment over time.

Mr Hartley added: “While our clients, especially for the supercars, are not always investment-inclined, with cars such as La Ferrari, the McLaren P1 and Bugatti being very strong performers in the marketplace at the moment, they will bear in mind the investment potential – especially considering the outlay they will be making.”

For Mr Mair, finding the right supercar is the key to making it a good investment opportunity. He added: “The clever investors look for the harder-to-find examples and the general rule of thumb is the rarer the piece, the better the capital appreciation.

“We supply cars from £100,000 up to £2million and it is the stock we get in the £150,000 to £200,000 price bracket that is the most popular among these savvy investors. There’s often not even any need to advertise it.

“Lamborghini, Rolls-Royce and Porsche models are doing very well at the moment. Standouts are the Ferrari 812, which is a new model out this year – we’ve just supplied one to a customer. The predecessor to that was the F12, which is also a highly sought-after model. We’re also seeing a lot of interest in the big end stuff, cars over £1m, so you’re talking about cars such as the La Ferrari and other vehicles of this calibre.”

At the other end of the spectrum to ultra-modern performance cars sits Paul Michaels of Hexagon Classics, which has been dealing in classic cars and their maintenance for nearly 50 years. Mr Michaels believes the appeal of owning a classic car lies not just in its investment potential.

He told us: “I think the underlying appeal is touch and feel – with modern cars there is none. You can often think to yourself, ‘who’s driving this car? Me or a computer?’ Opinions aside, if you look at the last ten years, classic cars have been a brilliant investment, but ask me about the next ten years and I would have to say they’ll never increase at the same rate again.

“Cars tripled and quadrupled in value – you’ve got certain Ferraris that today are valued at £10m that ten years ago were £2m. I can’t see any way in the world that a £10m car will be worth £40m in another ten years’ time.”

Mr Hartley agreed: “Over the last ten years the returns have been colossal. Since 2008, in the classic car market especially, prices have quadrupled, or even increased tenfold sometimes. A Ferrari 275 back in 2008 would have been worth somewhere in the region of £700,000, the same car now would be worth around £3m.

“There have not been the same kinds of increases in supercars at any stage. That said, if you take the McLaren P1, which was worth £1m when it came out in 2014 and is now worth £1.8m, there have been some good increases but not in the same region as the classic cars.”

So, have cars as an investment already reached their fullest potential? Maybe so, but as tangible assets they still represent a safer investment than many other portfolio options out there.

As Mr Michaels explained: “You’ve got to compare cars with other investments – shares in a company that might go bankrupt can end up worth nothing but physical assets, such as cars, diamonds or a decent watch, will always have some intrinsic value. They will never be worth nothing.”

Similarly, Mr Mair believes the typical customer is not just looking to invest, but has a real passion for the assets themselves. He said: “They’re all generally car enthusiasts and successful businessmen by nature, so when it comes to buying one of our cars there’s always both elements.

“Investments aside, there’s also the fact they have worked hard for their money and are now looking for a big boy’s toy that will not only offer them pleasure and enjoyment but that might, someday, give them a decent return.”

Mr Michaels echoed this opinion: “It’s a mix of both. There are a few people who have seen the increase in the value of cars and have seen it as an opportunity to make money collecting, storing or helping to buy these types of assets. However, I would say that’s only about a quarter of the customers I personally deal with – the majority of people buy these cars to use, not as an everyday car, but as a pleasure product.”

Private bank Coutts reported that the value of some classic cars rose a massive 257% per cent between 2005 and 2013, with prices slowing in recent years. In 2016, cars such as the Porsche 993 increased in value by 10 to 15% and the Aston Martin V8 Vantage by 20%. But, what have the returns been like of late?

Mr Michaels said: “In the current 2017 market I would say you are looking at growth of between five and ten per cent on what I would call a ‘normal classic car’. Of course, you have to buy sensibly and pick the right models. One also has to be careful to not buy something with too many miles or patchy ownership and maintenance history.

“You need a car that’s backed up with the right, authentic paper work, those are the cars that are going to be the ones for the future – make sure you get the lowest possible mileage, the best possible history and the correct provenance.”

While there may be hard and fast rules to abide by when considering buying a classic or performance car, there are none such when it comes to the type of person who might invest.

“We deal with an incredible range of people in our business,” said Mr Mair. “Many might have multiple cars, perhaps ranging from a small collector with four or five in his collection to a chap who has a secluded hangar somewhere with 200 to 300 vehicles, all the way to one of the foreign royal families we deal with who have literally thousands of vehicles.”

“Our average customer is not a multiple owner, although we have plenty out there. However, you can define it almost by price – up to the £100,000 bracket it tends to be people who buy one car only. Once you are into the half-million, million pound bracket, the buyers will be the ones who generally have more than one.

“We’ve got one client with around 20 cars, another with eight or so. We’re storing some cars for a chap who’s building a new 20-car garage in his country house – he collects cars worth anything between £300,000 and a million pounds.”

With this level of vehicle ownership come many considerations, not only in terms of the potential increase in investment value and asset storage and maintenance, but also tax.

Mr Michaels explained: “You’ve got to be careful when it comes to any buying and selling of your cars. If you ‘trade’, that is buy a car one week and sell it the next, you will get hit with a tax bill. If you are sensible, in that you buy a car, keep it three years, sell it and make a profit then reinvest in another, you will have no problems whatsoever.

“I believe the rules and regs say it’s about two cars per year, but not every year. So, if for some reason you needed money because your daughter was ill for example, then they’d turn a blind eye – but if she was ill every year for ten years, then you’d probably be in trouble.”