The principles of collecting
I will close this article with a list of the principles of car collecting that drive the market.

The first is rarity versus value. I hear again and again from people who say they have one of only three of a particular model left in existence. The view is that this makes the car valuable, but it is not true. There are grand marques and grand models that are highly desirable and they are keenly sought after, and this drives value.

Next is the idea of cars as investments. The 1980s showed that, like all commodities that are traded, what goes up does come down. The fact that world record prices have been achieved for Ferraris in recent years does not hide the fact that overall, prices have dropped recently. The sense of nostalgia among the baby boomers sent the price of muscle cars through the roof briefly a decade ago.

It is a matter of riding the roller coaster. In the late 1980s, professionals were establishing retirement funds to buy classic cars. They helped drive the price up, and it crashed down on them.

It is when low production volumes coincide with desirability and demand that prices rise. Added to that, a car can truly break all the accepted rules and value ranges if it is truly beautiful.

Provenance is more important every year, especially at the top end. It is now possible to recreate a $5 million car from parts for less than $1 million. It is being done.

Cars with continuous history fetch higher prices. Motorsport history is always a plus. A car with race history is worth more than one without.

The old rules also still apply. Originality rules over cars restored with replica parts. Often newer restorations are better than older restorations when car restoration was less sophisticated and inferior materials were used

Cars that can be used are generally more valuable than similar cars that do not qualify for prestigious events. A London to Brighton, Le Mans or Mille Miglia car always finds a buyer at a good price.

Show-winning cars attract a price premium if the show was recent, not so much if it was 20 years ago.

Sometimes cars that were owned by famous people command higher prices but not always. Elton John sold his cars at auction for double the going prices, but it would be hard to attract a big premium for a car once owned by an Australian prime minister.

So what is the best collector car to buy? I think that it is the same advice the art auctioneers tell their clients. There is no simple answer. I say to buy the car you like no matter how humble it is and to buy it to use it.

Don't buy it for capital appreciation unless you study the ebb and flow of the market and understand the generational demographics of the old car market. And even then, your average returns could be better than the stock market or the property market, but only if you buy wisely.