State 4 Garage Gold - Should we have known then?
12/30/2016
At auctions, but also at private sales, the interest of the press and observers is usually focused on well-preserved or restored classic cars, the prices of which have continued to rise in recent years, sometimes with double-digit growth rates.
However, prices for restoration objects have also risen in line with the valuations of drivable or concours-ready cars. So let's take a look at the so-called Condition 4 vehicles, i.e. cars in "used condition". According to market observer Classic Data, these are only partially roadworthy; immediate work is required for successful road registration; slight to medium rust penetration is visible/present; the vehicle is complete in its individual assemblies but not necessarily undamaged.
A condition 4 vehicle may well have been parked for several years. You may remember the RM/Sotheby's auction in Milan about a month ago? The majority of the cars there were condition 4 or 5 vehicles. It was similar with the cars that Osenat auctioned from the Gombert collection on November 10, 2016.
We have analyzed the market price trends for state 4 vehicles and compiled their valuations in 1986 (converted to EUR), 2002 and 2016.
| Vehicle type | 1986 EUR | 2002 EUR | 2016 EUR | 1986-2002 | 2002-2016 | 1986-2016 |
|---|---|---|---|---|---|---|
| Alfa Romeo Giulia 1600 SS | 4708 | 9900 | 35100 | 2.1 | 3.55 | 7.46 |
| Alfa Romeo 1300 Junior Zagato (69-72) | 3122 | 6500 | 12700 | 2.08 | 1.95 | 4.07 |
| BMW Isetta 250 (56-62) | 819 | 2300 | 5800 | 2.81 | 2.52 | 7.08 |
| BMW 503 Convertible (56-59) | 19959 | 24700 | 100000 | 1.24 | 4.05 | 5.01 |
| BMW 2002 Turbo (73-75) | 1996 | 6300 | 27500 | 3.16 | 4.37 | 13.78 |
| BMW 3.0 CSL (71-72) | 7523 | 6800 | 80000 | 0.9 | 11.76 | 10.63 |
| BMW 1600 GT (67-68) | 2712 | 4700 | 24300 | 1.73 | 5.17 | 8.96 |
| De Tomaso Pantera (72-74) | 7676 | 10800 | 25000 | 1.41 | 2.31 | 3.26 |
| Fiat Dino 2400 Spider (69-72) | 8649 | 11000 | 57000 | 1.27 | 5.18 | 6.59 |
| Ford Escort RS 2000 (73-74) | 1279 | 2600 | 9500 | 2.03 | 3.65 | 7.43 |
| Ford Capri 2600 RS (70-73) | 2917 | 3700 | 12500 | 1.27 | 3.38 | 4.29 |
| Iso Grifo 7 Litri (68-70) | 12282 | 23200 | 210000 | 1.89 | 9.05 | 17.1 |
| Jaguar E-Type Series 1 Convertible 3.8 Litre (61-64) | 11822 | 19500 | 87500 | 1.65 | 4.49 | 7.4 |
| Maserati 3500 GTI (57-65) | 8700 | 13700 | 123000 | 1.57 | 8.98 | 14.14 |
| Maserati Ghibli (67-73) | 11259 | 19200 | 100000 | 1.71 | 5.21 | 8.88 |
| Mercedes-Benz 280 SE 3.5 Cabriolet (69-71) | 14432 | 26000 | 128000 | 1.8 | 4.92 | 8.87 |
| Mercedes-Benz 300 SL Roadster (57-63) | 38894 | 141000 | 610000 | 3.63 | 4.33 | 15.68 |
| FMR Tg 500 (58-61) | 4452 | 12000 | 70000 | 2.7 | 5.83 | 15.72 |
| Porsche 356 1500 Speedster (54-55) | 12026 | 26000 | 150000 | 2.16 | 5.77 | 12.47 |
| Porsche 911 S (72-73) | 2968 | 7900 | 71500 | 2.66 | 9.05 | 24.09 |
| Renault-Alpine A110 1600 S (70-73) | 5732 | 11300 | 28800 | 1.97 | 2.55 | 5.02 |
| VW Beetle Pretzel Export (52-53) | 1535 | 4200 | 12000 | 2.74 | 2.86 | 7.82 |
In the period from 1986 to 2016 (i.e. over 30 years), the Porsche 911 S in condition 4 rose the most in value; the restoration object is an incredible 24.09 times more expensive today than it was then. Even compared to 2002, it costs 9.05 times more today, but is still beaten by the BMW 3.0 CSL, which has become 11.8 times more expensive since 2002.
Incidentally, the statistically determined valuations from Classic Data do not exaggerate. A Jaguar E-Type Series 1 is currently listed as a 3.8-liter in condition 4 at EUR 87,500; at RM/Sotheby's in Milan in November 2016, EUR 100,800 to 156,800 was paid.
The Maserati 3500 GT/GTI is also interesting as a school example. In 1986, EUR 8700 was paid for a non-drivable condition 4 example, in 2002 it was EUR 13,700, now it is EUR 123,000, i.e. 14 times more than in 1986 or 9 times more than in 2002. Too long-term a view? Well, in 2014 it was still EUR 39,000, so even if you had put an almost condemned Maserati wreck in your underground garage two years ago, the value today would be almost four times as high as it was then.
It would have been a pity if you had bought the portfolio shown in the table above in 1986. They would have paid EUR 185,462 for the 21 undriveable cars. Today, together they would be worth almost
two million euros, almost eleven times the investment. If we had only got involved in 2002, we would have had to pay EUR 393,300 and would have quintupled this sum.
Of course, we could have multiplied our money even more if we had bought the top five in the above list together in 1986, because that would have only cost us EUR 67,296, but would have brought us almost 1.1 million today, sixteen times as much.
But who would have thought in 1986 and even in 2002 that such wrecks would increase in value by more than the cost of the space in which they are stored? After all, you also have to consider the costs. The garage rent for the 21 cars would have cost around EUR 300,000 over 30 years, even if they had been stored cheaply. And then there would have been the capital costs, which would have amounted to a further EUR 223,000 at a low assumed rate of 4%. Of course, the investment would still have been worthwhile, but how could anyone have predicted the price boom in the new millennium, which is when things really took off?
So now we are wiser and could do better this time.
But which cars in condition 4 would we buy today? You probably won't find a Lamborghini P400 S in such a miserable condition today, the only recent example being the P400 S that Osenat sold in condition 5 (or worse) for EUR 150,000. In Milan, too, a lot was paid for classic cars, and often considerably more than one would expect based on the Classic Data values.
So let's turn our attention to the later classics that would still be affordable today. According to Classic Data, an Audi Coupé Quattro S2 (Type 89), for example, would be available today in condition 4 for EUR 3900, an Ur-Quattro for EUR 10,800, a BMW Z1 already costs EUR 25,700, while a Citroën Méhari would be available for just EUR 3500. A condition 4 Datsun 240 Z would cost EUR 5300, a Ferrari Mondial 3.2 (85-89) EUR 17,800, a Ferrari 400 GT (76-79) would lighten our bank account by EUR 25,300 and a Lamborghini Urraco P300 by EUR 36,100. Buying a condition 4 MItsubishi Lancer Turbo of the first generation would be considerably cheaper at EUR 3000, a Peugeot 205 GTI 1.6 (84-88) would be available for EUR 1500, a Porsche 944 S2 for around EUR 7000. A VW Golf GTI Mk1 would be available in condition 4 for EUR 3500, a Renault 5 Alpine Turbo for EUR 4000, a Renault Alpine A310 V6 for EUR 6000. These are all just examples, but they show how difficult it would be to choose the right one. Because one thing is clear, you couldn't drive these cars if you simply put them in a garage. And if they were restored straight away, there would probably be no money to be made from the investment. You won't know whether you've chosen the right ones until five, ten or twenty years down the line, by which time they'll be costing you money in the form of garage rent and interest on the capital.
What would be your tip?
