A Guide for Car Collectors (Part 2)

Urdorf, September 4, 2020   Collecting is first and foremost a passion affair. In part 1 of this small handbook for car collectors (see my article dated August 19, 2020), the main topic was mainly the acquisition of cars to establish a collection.

In part 2, we look in the major aspects of holding a collection. To start with, let us look at the documentation or cataloguing a car collection. Each car should be well documented.

Documentation

The essential components to be included in a documentation of a collection car are as follows:

1. Type of car: what kind of manufacturer is it? which model? which series? 
2. Chassis Number: this is the single most important identification key of a car. Following the chassis number, the other key components of the car like the engine must be identified by number and fit to the original components at the first delivery (so called “matching numbers”)
3. Description: a detailed visual description of the exterior colour, the interior colour. This field should also include detailed descriptions of the materials.
4. Description of the engine: as the engine is the heart of many collection cars, there should be a fairly detailed account on the engine.
5. Dimensions/Weight: lengths, wheel base, etc.  should be included wither in inches or centimetres
6. Provenance: The ownership history of the car should also be included. The provenance is critical information about any car in the secondary market and affects its value. As an example, if Mika H?kkinen is selling his McLaren P1, Senna and Speedtail, these three McLaren cars will trade with a “H?kkinen premium”. All known previous owners should be listed. 
7. Condition: the general condition of the car should always be noted along. In Europe, there is an established rating with class 1, 2 and 3. Such ratings should be completed with basic terms to describe the condition. 
8. Location: This field refers to the actual physical location and current registration. This may of significance for any cross-border transactions due to tax, custom duties and VAT charges.
9. Restoration History: all documentation and notes pertaining to the car’s restoration history should be included in the car file. This include condition reports, restoration invoices and related images/photos.
10. Concours History: in case the car has been exposed at concours and classic car fairs, this should be also recorded in the car file.

Insurance

Insurance coverage is governed by the wording of the insurance policy. It explains what types of losses are covered and what is excluded. Collectors should keep in mind that an insurance policy is a negotiable instrument and that the annual policy renewal will offer another opportunity to make chances. 

Most collectors do not deal with the insurance company directly but rather with a broker. When establishing a relationship, the fee of the broker should be discussed and there should be full transparency. 

Most often, collectors seek an “all risk” policy, that is a policy that covers all accidental physical loss or damage (e.g. fire, accidental damage, water, disappearance, etc.) unless specifically excluded. Often exclusions include catastrophic events (9/11, earthquakes, etc). 

If the car is not registered, the insurance coverage should be analysed in more detail. In particular, it should be analysed if the car is covered regardless of the location or only within the property of the owner. Furthermore, it should be confirmed that the policy indicates “worldwide” coverage in particular if the owner intends to participate in rallies in more exotic countries.

Shipping/Transportation

When purchasing, restoring or moving a collector’s car to another location for any reason, one of the first issues to consider is shipping. Thousands of cars are moved around on trucks every day. However, if the car is of some value, it is recommended to not only chose a specialized shipping company to ensure a damage-free transportation. For any cross-border transport, import and customs fees may apply, with the amount due and methods of tax collection varying from jurisdiction to jurisdiction. On top, in some countries a Value-Added Tax (VAT) will be due. It is highly recommended to work with specialists which understands the situation on taxes and customs, but are also experienced in executing the relevant paper work. In particular, cars leaving the US for entry into Europe, or transferring from EU-Countries into non-EU countries can be tricky.

In choosing a shipping company, one may have a look if there is a subcontracting clause. Even when entrusting a valuable car into the hands of a reputable shipping company, a collector cannot always assume that it will stay there and not passed on to a subcontractor. Another very important point is storage by the shipping company. Does the shipping company share a dock with other companies? How is the facility protected?

A company which is very specialized in this area is the Swiss-based Classic Automobile Relocation Logistics Ltd. In Th?rishaus near Bern.

Storage

Not all collectors have enough space to keep their cars at home. Often, they put their cars into the hands of specialized car storage facilities, sometimes also called car lounges or car hotels. Collectors should choose their storage facility with care, walking through any potential warehouse space and investigating the following issues:

1. What kind of security the storage facility has? Who has access to what area?
2. Who works at the facility? Do they have dedicated staff?
3. Are adequate fire-protection systems in place?
4. How are temperature and humidity controlled?
5. What are the neighbouring buildings used for?

Do the staff ensure adequate privacy and confidentiality? The collection business thrives on information - who owns what? – and this information must not be divulged to third parties.

Furthermore, it is of great added value if the storage facility is also offering technical services, in particular since often the cars are not driven frequently. Ideally, the storage service provider can also do technical maintenance of the cars, check-ups and washing/cleaning and can handle tyre services. 

Within our group, Pichler GFG in Feutersoey/Gstaad is highly specialized on storage services for collector cars. For many years, Pichler has been offering more than 250 storage places close to the well-known resort in the Swiss alps.

Some car storage facilities are combining the storage services with an event and/or with a gastronomical business. In such cases, the storage turns into a “museum” or “exhibition”.  Depending on the intentions of the collector, this may be fine. However, privacy and confidentiality are almost impossible to retain.

Some final thoughts on Collecting Cars…

To finish this second part of the small collector’s handbook, I would like to repeat some of my personal recommendations of part 1:

1.    Decide where you’re going to store your collection. Collectors must find a place to store their vehicles. Whether it’s a warehouse or specialized facility, make sure it’s as close as possible to where you live.

2.    Choose themes to guide what you buy. Like savvy art and furniture buyers, smart car aficionados focus on styles, periods, or individuals to help shape their collections. 

3.    Head to trade shows, reunions and classic car races. Rallies and races should always be a part of your car-collecting experience. 

4.    Keep an eye out for memorabilia. Many of our clients gravitate to cars created by visionary designers, and they spend a lot of time researching obscure brands and engineers. In the process, they’ve accumulated a library of catalogues and books—showcased in a den in their home—as well as posters, models, and other vintage marketing materials, which they display in their garage

5.    Cultivate a network of like-minded collectors. You can’t go to every auction and see every car in person, so it helps if you have a few friends whose opinions and taste you trust.

6.    Decide how much work you want to do. Depending on your interest, maintenance and repair work can be either a necessary chore or the source of great pleasure. Understanding where you fall in the spectrum should inform what kind of cars you buy. 

7.    Get behind the wheel and drive. One of the worst things you can do to an old car is let it just sit around. On weekends take one out in the morning and then another in the afternoon. It’s good for the cars and fun for you.