At the recent Silverstone Classic auction a LHD 1958 Jaguar XK150S Roadster sold for £201,250, comfortably exceeding the estimate of £175k-£195k. The XK150 is a desirable car, and the S with its triple carburettors, straight port head, three-part clutch and light-weight flywheel is the one to have, but a very good example sold for £78,400 at Brooklands in May 2012. So, what does an extra £122,850 (enough to buy a clean Ferrari Dino in today’s market) buy you and is it worth it?
I first saw this car in mid-July and contacted the auction house, vaguely assuming a mistake had been made with the estimate. They assured me that there was no mistake and the car had covered a mere 580 miles from new. That’s an average of 10.5 miles a year. This particular car also had an interesting provenance, originally supplied through Jaguar Cars New York, it was entered into a speed trial on the famous Bonneville salt flats by its enthusiastic owner. Getting to the start line of this competition accounts for 500 miles, or 86%, of its life. Unfortunately, the run didn’t go to plan and the speed trial ended prematurely in a barrel roll.
So, £201k buys you a crashed car. And it wasn’t even crashed by Jim Clark…
The interesting part of the story is what happens next. The wreck was bought by an independent buyer who decided to dry store the vehicle for 40 years, resisting the temptation to sell as the classic car market rose, particularly in the late 80’s. It proved to be a brave but shrewd move and the car was sold to a professional restorer in the UK in 2000.
After a complete restoration, which crucially preserved many original parts, the car was offered for auction, which brings us to last weekend. If you follow our Twitter feed (@MarketEng) you will know that classic cars are the only asset to match gold in the past 20 years, so increasingly classics are looking like a decent investment – particularly if you can find the right car. Classic cars have a further advantage over gold in that they are often a purchase of the heart as much as the head. Gold does not rise in value if it was once owned by the Queen, but a Lotus Cortina raced by Jim Clark can sell for four or five times more than a comparable car without provenance. This discrepancy creates inefficiencies in the market, which is good for buyers and sellers alike. It creates a market where knowledge and understanding can triumph over pure purchasing power.
We should celebrate when a car smashes its estimate as it shows the market can be volatile, and a volatile market is good for those who understand the motivators. Unfortunately, if a car’s value is linked to its mileage it does make every subsequent mile rather expensive. One for the collector rather than the enthusiast, but that’s another discussion.
If you would like to discuss any of the themes in this post please do get in touch or reach me on Twitter: @CJFosterUK.
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