Trying to execute a three-point turn on a narrow London street with a lorry in front of you and a queue of traffic forming behind can be a sweaty situation at best of times, but when you’re behind the wheel of a 430 brake horse power Ferrari Testarossa that used to belong to Sir Elton John, it is even worse.
The rare 512 TR has only 2,100 miles on the clock and is expected to top £110,000 when it is sold by auction house Coys on Tuesday.
If, that is, I can manage to get it around the block and back to the auction hall in west London in one piece.
In Ferrari’s famous Rosso Corsa red, the 512 TR is a beautiful looking machine from an era when supercars where designed for their looks, not their performance in an aerodynamic wind tunnel. Its current owner Philip Oram, a property developer from Bournemouth and long-time Ferrari owner, seems incredibly relaxed about me taking it for a spin. “Just mind the kerbs,” he says calmly as I strap myself into its beige leather interior. It feels as good as new, but Oram, who bought it last year, has never driven it. That’s not unusual: the value of classic cars is soaring in the UK and beyond, partly because they are highly-prized objects, but also because they are a great way to beat the taxman.
However, adding miles to clock is the easiest way to slash their value. “Ferraris are the only car I’ve never lost money on,” Oram says. “The hope is I can walk away money back and perhaps a little more to play the game again at the auction on Tuesday.”
Sir Elton’s former “prancing horse” is just the tip of an incredible boom in sales of classic cars which have seen returns outstrip most other types of investments in the last decade.
Chris Routledge, managing director of Coys, said: “Old cars have been a hedge against the recession and interest is growing significantly quickly around the world. Prices have rocketed and in some cases, such as the Mercedes-Benz 300SL Roadster, the average global auction price since 2000 has increased by 300 per cent.
“Similarly, the Aston Martin DB4’s average global auction price before the recession was £135,000, but after the recession it went up to £207,000.”
A recent wealth report by property firm Knight Frank found that classic car prices have soared 395 per cent in 10 years. The FTSE 100 has risen around 94 per cent over that time. And the bonus for collectors is that unlike shares and most traditional assets, classics don’t attract Capital Gains Tax.
The savings are considerable. Tax is charged on any profits on assets above £10,600 in a year. Selling a £100,000 asset – or share portfolio – would normally therefore mean CGT of almost £25,000. It’s not surprising then that this particular 1991 Ferrari has spent most the past 10 years or so in a heated garage and under protective dustcovers.
Sir Elton John obviously wasn’t worried about dust though; he was responsible for 1,800 of the miles on the clock and reportedly drove it regularly after it was given to him as a gift by his record label.