 "Vintage Cars")
Mumbai-based industrialist Harit Trivedi bought his first vintage car in 1979 for Rs 7,000. Today the car’s estimated value is about Rs 15 lakh. His second car, purchased for about Rs 10,000, costs about Rs 25 lakh today. Does that make a vintage or a classic car a good investment?
Not really, says Trivedi, if you take into account the maintenance cost. “At the end of the day it is a mechanical thing and if it breaks down there is nothing you can do about it. It is a risk. For collectors, the joy is the thought that we have preserved some history. The increase in the value is only a byproduct of spending money on a vintage car,” Trivedi says.
Just the restoration of a vintage car can run into Rs 10-20 lakh, says Kooverji Gamadia, whose family owns vintage cars. This can push up the price of the car to Rs 1 crore plus, which can make it difficult to find a buyer. But re-sale of lower-end cars that cost Rs 15-50 lakh is easier.
Patrick Rollet, president, Federation Internationale Des Vehicules Anciens (FIVA), agrees that there is generally no money to be made in vintage cars because they are expensive to maintain. The restoration cost is sometimes the price of a good car.
“According to the Historic Automobile Group International (HAGI) Index, the overall average increase in price for vintage and classic cars was 40 per cent in 2014,” Rollet says. Similar data for India is not available. Rollet is in India as part of Osianama’s Vintage & Classic Automobile Club Event, held in Mumbai.
In India, there are an estimated 7,000 vintage and classic cars and the number of owners is less than 100. A vintage car is one built before 1940 and a classic is one built before 1960. The Ambassador, which has been discontinued, will one day become a classic.
A big problem in the maintenance of vintage cars is the decline in the number of skilled workers and garages. Spare parts are also expensive and hard to find. Collectors source spare parts from chor bazaars, scrap dealers, other collectors, during their foreign trips to the US or UK, and increasingly now on eBay. Many even get spare parts that are not available custom made. All this adds to the maintenance cost.
Insurance is another problem, again as a result of the difficulty in valuation. Since insurance companies are wary of insuring these cars, most collectors only take third-party insurance, which is mandatory.
Just like all collector items, vintage and classic cars are based on themes. For instance, some collectors prefer only American cars, while others prefer British. Some have a liking for convertibles, while others prefer cars where the body is not factory fitted. Yet others may prefer cars previously owned by maharajas. A car owned by a maharaja is more valuable because of the heritage associated with it. “While it could have been considered a good investment till a year ago, after India allowed import of vintage cars in 2013, the supply has gone up. There has been a halt in the rising prices. But import is also expensive because all duties put together can work to around 200 per cent of the car's value,” Trivedi says.
