Future investment or future headache?
May 2007

Future investment or future headache?

Last year I was invited by Florida based car collector and authority Miles C Collier to speak, along with other far more illustrious motoring buffs, at his biennial Connoisseurship Symposium, which gathers together at Miles’ museum in Naples thirty or so of the world’s most influential car collectors, most of them American. I won’t mention their names but you’d recognize many of them.

I was flattered to be asked by Miles to present a segment entitled ‘Supercars - Future Investment or Future Headache?’ and to this end various manufacturers/ importers supplied cars for the group to examine and comment upon, including iconic models from the 1980s such as the Porsche 959 and Ferrari F40, the ill-fated Jaguar XJ220 and Bugatti EB110, recent rivals the Ferrari Enzo and Porsche Carrera GT, and, still for many the ‘Daddy’ of supercars, the collection’s freshly acquired McLaren F.1. Flown in from Europe and taking pride of place, however, stood the car which is currently on every enthusiast’s lips: the Bugatti Veyron.

porsche 959  ferrari-f40_monza
Left: Porsche's groundbreaking 959, a high tech laboratory on wheels.
Right:
Ferrari F40, doing what it does best.

If you’re interested in the conclusions we reached, Keith Martin summed up many of the views in his Sports Car Marketmagazine. In short, supercars have historically been rich men’s toys, and most toys sink to the bottom of the toy box once their owners lose interest and something new comes along. The toy makers have been partly to blame as well, selling cars which were sometimes so poorly thrown together that a season’s fun was the best an owner could expect. The large wall sign which hung next to Lamborghini’s assembly line in the 1960s reminded workers: “The next test driver will be the buyer” but the finished product sometimes begged the question as to whether the factory had actually employed any test drivers of their own. And Lamborghini were not alone in those early days.

the jaguar xj220  bugatti eb110
Left: The Jaguar XJ220 was a victim of supercar speculation and the early '90s recession.
Right:
Looking a little dated now...the ill-fated Bugatti EB110 of the early 1990s.

So it’s not surprising that with very few exceptions, supercars have not been great investments unless you were lucky enough to receive your F40 at the end of 1989 and clever/greedy/lucky enough to exchange it immediately for a cheque three times as large as the one you’d just given Ferrari. The notion of leaving to your offspring a limited production supercar which you bought new in 2007 is noble but probably not a brilliant financial master plan when you take into account the real cost of ownership (don’t expect it to be ‘as new’ after 20 years on blocks with no maintenance) and that’s assuming your very ozone-unfriendly supercar will be road legal in 2025 anyway!

But “Life’s short so drive fast” as they say, so let’s accept that buying a supercar won’t be on Warren Buffett’s list of  top tips and take the supercar for what it is: expensive fun. The Collier Symposium group was fairly unanimous on which cars it considered great, or at least liked. Everyone agreed the space age Porsche 959 pushed most of the right buttons, with technical prowess, racing pedigree, limited numbers and ground breaking performance. Its direct 1980s antithesis, the ‘bad boy’ F40, which used comparatively simple technology to deliver race car sensations and performance, matched by aggressive looks and competition success, remains an iconic supercar and is slowly climbing in value despite FIAT-like production numbers. Everyone liked it. The XJ220 and EB110 both seem to attract a small but loyal group of followers but their standing in the overall marketplace is reflected by their public sales results, which are generally disappointing. The Ferrari Enzo, whilst it’s still fresh and few were built, has held up well in the marketplace and used examples, as long as the mileage is low, command close to the list price when they were new: not bad for a four year old model. The wonderful sounding Porsche Carrera GT with its howling V10 engine, however, has not enjoyed the same speculative frenzy and prices continue to slide, with a quick internet search revealing over 40 cars for sale.

ferrari enzo  porsche carrera gt
Left: Just turned four and still fresh, the Ferrari Enzo.
Right:
Stuttgart's challenge to Maranello, the V10 Porsche Carrera GT.

And the 241mph F.1 McLaren? The list price equated to around $1 million when new, which seemed stratospheric, and the timing couldn’t have been much unluckier, just as the economy hit rock bottom and the collectors car market followed. And yet, I don’t remember a time when anyone had anything bad to say about the F.1. Yes, their values dipped- I remember auctioning a 400km from new example in 1998 for just $550,000- but collectors almost universally consider this the supercar of the past quarter century. It’s hard not to, really, with limited build numbers (some 110 including race cars), great competition history (it doesn’t get much better than victory at Le Mans), good, understated looks (which have aged well), reasonable practicality (room for golf clubs, wife and girlfriend will be many owners’ idea of heaven), and most importantly of all, that other worldly performance: no other car came close until the Veyron. Over a decade after its launch, the best examples of the F.1 are hitting close to $2 million in private sales, with almost double that paid recently for one of the five ‘LM’ versions built. Had potential buyers foreseen that back in 1992/3, McLaren would probably have signed up rather more of them.

Which brings us to the Veyron. We’re all read the numbers: €1 million plus tax (actually €1.1 since 15th April 2006) to own one, a 407 km/h top speed, and of course those magical 1001 bhp. A nice touch, that: anything that comes in packages of 1001, rather like Arabian Nights, must surely be exotic.

So if there is a moral to this story, it’s probably that modern supercars are still one of the most enjoyable ways of losing a small fortune, but if you’ve worked hard to afford one, it’s a waste of time trying to rationalize such a purchase. Just please drive it: you’re missing the point if you become an armchair owner more concerned with owning the lowest mileage example than actually getting to know it first hand.

mclaren f1  bugatti veyron
Left: Still 'The Daddy', the 241mph McLaren F1.
Right: 21st Century Panzer Force- the Bugatti Veyron.

At the end of the Collier Symposium, Bugatti’s genial PR man Julius Kruta (a genuine ‘car guy’ and longstanding Bugatti enthusiast) approached me and asked if I’d like to try out the Veyron ‘when next in Molsheim’. Not an invitation I receive every day, and so a few months later I found myself driving my very obsolete black Miura north towards the French/Swiss border, thinking this would be a good way of seeing how much progress supercar manufacturers have made in the four decades since Lamborghini introduced the first one. The answer, of course, is quite a lot.

If I haven’t bored you stiff already (and if I have I apologise), our next newsletter will tell you all about a day with a Veyron, no minders and the empty roads of the Alsace.