Christian Figenschou
Old cars are generally more of an emotional investment than a financial one, but the rand’s recent slide has widened the scope for speculation in classic cars as commodities.
Sought-after collector’s cars have always lagged in value in South Africa compared to overseas markets, and the crumbling of the rand has opened up this gap. As a result, there has been an increase in the number of classic cars being shipped out of the country for sale abroad, both by speculators and by owners seeking maximum realisation of their assets.
According to Brian Tyler of Heritage Cars in Randburg, thinking of classic cars as tradeable commodities makes a lot of sense. “They are easy to export and, as an international commodity, they are easy to price.”
He adds that classics which have spent their lives in South Africa are usually rust-free, if they’ve been kept inland, which adds considerably to their value in damper northern hemisphere markets.
According to Tyler there are no prohibitions on exporting cars from South Africa, and one can ship a car to the United Kingdom for less than R10 000. There are no bureaucratic formalities involved, except where the value exceeds R50 000 and exchange control regulations come into play.
On landing in Europe or the UK, there are no duties to be paid except value- added tax, and the only formality involves being able to prove that the car is not stolen. Tyler says that, under normal circumstances, there are probably 300 classic cars leaving the country each year.
With the latest round of currency depreciation, he says, this has increased tremendously. So much so that British classic car dealers are not content to wait for South African cars to come to them – several of them are in the country buying up stocks.
But this one-way traffic has caused concern in some quarters. There are those who say the trade should be controlled as classic cars represent part of the national cultural heritage.
Tyler ascribes this attitude to sour grapes on the part of those who don’t stand to benefit from selling their cars overseas: “If the economic situation forces someone to sell a classic car, you can’t hold it against them for trying to maximise their assets. If an E-Type Jaguar gets shipped from South Africa back to the United Kingdom, where it was originally built, whose national heritage is it part of?”
One thing is certain, as more classic cars leave the country, those that stay behind will become more valuable as their scarcity increases and will begin to command internationally comparable prices.
But it is not only old cars that offer speculative opportunities in the current economic climate. New models like BMW’s Z3 also offer good potential profits to exporters.
BMW South Africa has been making clever use of export credits in terms of the motor industry development programme to sell selected imported models at keen prices locally. Overseas, the Z3 competes in price with models like the Mercedes-Benz SLK; in South Africa the Z3 sells for more than R100 000 less than the SLK.
While other right-hand drive markets are experiencing long waiting lists for delivery of new Z3s, in South Africa there is already something of a glut of good, low-mileage used models on showroom floors.
Of course, buying old cars is fraught with dangers like botched repairs, accident damage and hidden rust. But top-quality classics that have been properly preserved or restored can fetch top dollar on international markets, particularly in the window period before local prices start to react to the latest currency depreciation.
Christian Figenschou writes the CyberDrive column for the eM&G at
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