Vintage and classic cars can cost anywhere from a few thousand to a few million ringgit. But there are a number of factors that determine whether a car is a collectible and has investment value. Andrew Suresh, founder of Historic Motoring Ventures Sdn Bhd, offers some pointers in the second part of this series.

TO ENSURE better value for the classic car, an investor must keep abreast of local and global market trends. In Malaysia, for example, famous classic car brands include the Mercedes-Benz and Jaguar.

While brands may do well globally, some of them may not be popular locally. Suresh points out that the classic Ferrari, the world-famous sports car that hails from Italy, is in high demand in the US, but not in Malaysia.

“In the US, there is a classic car market and a classic Ferrari market because there is a huge demand for the classic Ferrari. In Malaysia, we are not as rich as the people in the US, plus there are not many Ferrari owners who want to sell their cars,” he says.

Suresh, however, does not follow market trends. He likes to collect cars from the 1970s, which he calls “affordable classics”, such as the Opel Manta, Ford Capri and Holden Torana.

“My passion is for the cars of the Seventies because I grew up during that era. I enjoy cars made in this style. It is my personal preference, not for investment. I would like to have a Jaguar E-Type or Pagoda as an investor, but I am not in the position to buy one,” he says.

Suresh once collected nine classic cars, but sold six after he started his own family. When asked how much profit he made, he says “only a few thousand ringgit” as the cars were not meant for investment. “I didn’t lose money, only time and effort,” he smiles.

Suresh says the current trend in the market is the two-door coupé and cabriolet. “The two-door coupé and cabriolet vintage and classic cars are more collectible compared with saloon and estate versions. Cars with iconic designs and technical prowess are popular with collectors.”    

Whatever the case, thorough research needs to be done before buying a classic car. Suresh’s advice is to check with experts, car clubs and forums before investing in a car. 

“Verification of engine and chassis numbers can be done via various websites, local authorities or even with the manufacturer of the make in question. Conducting research on acknowledged collector car makes and models internationally is needed before purchase,” he says. 

“Sales transactions at auction events or verifiable saleroom deals will give you an indication which cars are of collectible value. One should also subscribe to classic car print or online magazines to get pointers on cars that have potential investment value.”  

While the demand for classic cars is rising in Malaysia, Suresh thinks that most of the locals still need to be educated on them to appreciate their value. He says people should learn and understand the market. 

“If locals don’t appreciate classic cars, these cars will be purchased by overseas collectors and international auction agents. It is already happening.”

Malaysia is in a strategic position to not just grow this investment segment but also preserve its rich motoring culture, he adds. “These cars came here as early as the 1920s and 1930s. Compared with our neighbours such as Vietnam, Laos, Cambodia and the Philippines, we are positioned very nicely to be a hub for classic cars. 

“We also have beautiful roads on which to enjoy our rides, unlike countries like Singapore where you can only drive around in circles.”

At the end of the day, there is something special about buying classic cars, says Suresh. “A vintage or classic car reminds me of when things were much simpler and less complicated. I would describe it as a vehicle that takes one back in time, like a time machine!

“The purity of yesteryear’s automotive designs, sturdy build and basic engineering characteristics means that such cars are made to stand the test of time.” 

Making transactions more transparent

The transactions of collectibles are not regulated in Malaysia. They are loosely governed by the “willing seller, willing buyer” principle, which could be a disadvantage for both parties. 

Andrew Suresh, founder of Historic Motoring Ventures Sdn Bhd (HMV), wants to create a standard method of valuation to make such transactions more transparent. 

Compared with dealers, who take a collector’s car to their place to display and sell, with the price very much depending on their own valuation, Suresh has created a platform to match buyers with sellers. He then charges a 5% service fee when the transaction has been successfully completed. 

The platform includes the Asia Klasika Motor Festival and Classic Cars Private Treaty Sales Show held by his company. During these events, classic cars owned by several collectors are carefully picked for the event. HMV will then recommend a price for the car using a 100-point valuation system, which takes into account the various parts of the car, How the system values the car is made transparent to the public. 

“We also compare the recommended sales price with international car indices and the sales price of the same classic car being sold at current international auction events,” Suresh says. 

International car indices that investors can refer to include the HAGI Top Index, the Hagerty Market Index and the K500 Classic Car Index.  The companies that own these indices are based in the UK and the US. 

Classic car transactions are not regulated because they haven’t received the support of the government, banks and insurance companies, opines Suresh. Currently, there is no licence granted by the government to any authority to value the price of a classic car. Thus, banks do not give out loans for classic cars and insurance companies do not have policies to cover the loss or damage of such cars.

A classic car is a million-dollar investment that is being kept at home most of the time, with a low risk of getting damaged or being in an accident, so why don’t the insurance companies [insure it]?” asks Suresh.

With a lot of money spent on classic cars in the international market, Suresh urges the government, banks and insurance companies to be part of this market. “If they help regulate this segment, more people will invest ... This will not only preserve the local motoring heritage, but also put our country on the map by having more classic car collectors participate at international events.”

This article first appeared in Personal Wealth, a section of The Edge Malaysia, on March 9 - 15, 2015.

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