January 18, 2023

In Four Wheels Veritas?

The issues pertaining to provenance and authenticity of luxury goods extend beyond fine art, watches and jewellery.

In Four Wheels Veritas?

The issues pertaining to provenance and authenticity of luxury goods extend beyond fine art, watches and jewellery. Classic cars feature prominently as an alternative investment and a good ‘buy’ can yield astronomically high dividends. According to the Knight Frank Luxury Investment Index, the 10-year return of investment in this class of assets is estimated at 289% beating art, jewellery and watches.

Conversely, painful issues arise if the beautiful collectible is subject to adverse authenticity issues which may dramatically depreciate its value or worse still, is considered a mere replica of much lesser value than if it were considered authentic. Mistakes can be costly. Authenticity of classic cars is an intimidatingly complex topic and often controversial. The level of technical complexity can be daunting. Moreover, automobiles are meant to be driven; they may crash or burn and get restored and driven again and therefore in their lifetime they inadvertently undergo an enormous amount of modifications.

Classic cars can either be road ready – capable of being driven down beautiful country lanes; or race ready – made to be blasted around the likes of Silverstone circuit or Steve McQueen’s favourite, Le Mans. Naturally, the latter category is more likely to require more extensive repairs, engine rebuilds or other major works in its lifetime. But what exactly do investor- collectors acquire in such passion investments? Stripped down to its key components, a classic car has a chassis (base frame of the car), the bodywork (superstructure), the gearbox and the engine. Depending on the marque, generally each of these parts would have its own unique factory stamped identification number; a VIN plaque would typically be attached to the part of the body and it contains the vehicle identification number registered in the car’s birth certificate such as Kardex or a Wagenpass. The chassis will have a number stamped on it and no two cars would have been originally manufactured with the same chassis number. Additionally, the engine and gearbox have their own type and serial factory stampings.

Whether road- or race-ready, each category of classic cars may present different issues pertaining to authenticity. In an ideal scenario a comprehensive and well documented provenance with no gaps (usually contained in what is known as the car’s history file) will verify the car’s authenticity. In reality however, it is rare to find a classic car with a flawless provenance - paperwork disappears, cars get locked in barns for decades, previous owners or their heirs are either no longer alive or simply not interested. Examples of doctored stamped numbers, ‘flamboyant’ restoration practices and other dubious actions are aplenty.

Take for example a classic race car from the 1970s which burns down completely. The owner still holds all original paperwork for the car, without any provenance gaps. Let’s say one piece of the frame with identification number survives. What if this car had been rebuilt to original specification and marketed for sale? In the first place, it would then be up to the potential buyer to investigate the car’s provenance and physically inspect the car. It can be extremely difficult to determine that the car is not the originally manufactured car (i.e. by the marque factory). Is this car considered authentic nonetheless? Expert opinion is split. Some say that as long as the car’s history is continuous, it will conclusively be the original, despite being a complete rebuild.

Let’s return now to the remaining piece of the chassis. What if it had not been incorporated into the rebuilt car, but was discovered years later by another restorer who decided to rebuild the whole car with that original piece then market it as the same model and chassis number and then sold it as that. As the buyer of this car, do you then have an original car? Let’s not forget, we now have two supposedly identical cars in the market. One owner will have a complete rebuild with all paperwork and the other owner will have a car with no papers, but the original piece of the chassis. In other scenarios, a car might have all its stampings correspond to the ones in the paperwork, but they may have been faked, or doctored. A diligent buyer has the option of conducting technical forensics such as metallurgy date testing (to verify the authenticity of the chassis) or magnetic resonance testing (to scan and compare VIN numbers and check whether they correspond with factory stamping). But to what lengths should one go before it becomes a hair-splitting exercise?

Photo credit: Raphael Dauvergne