How two similar car models can differ significantly in price

Your key takeaways

• Collectible cars with a high investment potential are typically in very good to mint condition, have a traceable provenance and come with full documentation
• Professional restorations can add significant value to a car, however, they are often expensive and should be considered carefully
• The condition of collectible cars can be assessed using a standardized five-tier system: Grade 1 means mint condition and grade 5 describes a defective car that is not roadworthy
• Depending on condition, provenance, documentation, color combination and special features, prices for a model can vary extremely

In a previous blog article, we explained that the most interesting collectible cars combine the characteristics of rarity, prestigious brand name and historical significance. However, even rare and exotic classics can be unsuitable investments if certain conditions are not met. For example, if a 1967 Lamborghini Miura comes up for auction with technical defects or a lack of documentation, it is likely that a fair number of risk-averse collectors would steer clear of the wounded bull.

The greatest collectibles are not only limited editions with a rich history behind them. Collectibles with high investment potential are usually in very good to mint condition, have a traceable provenance and come with full documentation. These points should be in the buyer's mind as they lay the foundation for future appreciation. At Silverpine, we are well aware that these are the factors that determine the value of an asset, and we take them into account on a regular basis.

Of course, condition, originality and authenticity are also factors that influence the price at which we source cars. Our stunning dark green 1969 Mercedes-Benz 280 SL Pagoda has just over 100 kilometers on the odometer after a full restoration. We offered the car for €163,000 on our app while a few other 1969 Pagodas with low mileage were for sale at prices between €80,000 and €250,000. What are the reasons for such wide variations?

‍Classic Data classifies collectible cars using a five-tier system
‍Car enthusiasts know that restoration can be an good way of restoring any classic car to its former (or new) glory. Depending on the skills of the restorer and the resources available, a car can look as fresh as it did when it left the factory many decades ago. While a professional restoration can add significant value to an asset, the question of whether or not to restore a battered classic needs to be considered carefully: the 1967 Lamborghini Miura mentioned above may have great substance, but a full restoration of this type of car can easily cost more than its purchase price.

German classic car market specialists Classic Data have developed a standardized approach to assessing the overall condition of any vehicle using a five-point grading system. It is reasonable to assume that a Pagoda offered for €100,000 would be on the lower end of the scale compared to its quarter of a million-euro twin. But is mint condition really everything? Is a restoration enough to justify such a price difference? Here are the five grades of condition according to Classic Data:

‍Grade 1: The car is in immaculate condition, free from defects, damage and wear and tear. The car is as good as new or better (yes, you read that right, modern technology and the availability of different materials allow a car to look and drive better today than when it left the factory). This is a perfectly restored top of the range car. Very rare.

‍Grade 2: The car is in good condition and free of defects, but shows slight signs of wear and tear. These are either unrestored cars in good original condition, or professionally restored vehicles. This is a technically and visually flawless car with slight signs of wear.

‍Grade 3: The car is used but has no major technical or cosmetic defects. The classic car is fully roadworthy and has minor defects and signs of wear and tear, mainly reflecting its mileage. The car may have traces of rust, but does not require immediate repair.

‍Grade 4: The car is in very worn condition and only partially roadworthy. This type of car will require extensive restoration to be roadworthy. The vehicle may have light to moderate rust perforation and may have been involved in an accident.

‍Grade 5: The car has significant defects and is not roadworthy. Similar to Grade 4 vehicles, this type will require extensive restoration to be road legal. The car may not be complete and could be used to supply parts to other projects.

Obviously, the general condition of a classic car has a huge influence on its price and, as a rule of thumb, the higher the position on the grading system, the higher the value of the car. Our 280 SL Pagode has been given an exclusive Grade 1 restoration and has a very good value for money, with a compound annual growth rate (CAGR) of almost 17% over the last ten years.

However, there are several other factors to consider. The following points can make the difference between a solid classic and a blue-chip collectible car (the importance of nice condition has already been explained and will not be repeated here):

‍Originality. Let us return to the example of the 1967 Lamborghini Miura. A professionally restored Miura can be an attractive investment, as long as no one has painted the car in a strange color or amateurishly tuned the engine. Keep in mind: the most promising collectibles capture the charm of a bygone era and appear to have just rolled off the production line.

‍Authenticity. The value of a collectible car, even if it is in great condition, can be considerably reduced if it is of dubious origin or has a dubious past. Who would buy a Ferrari Testarossa that was involved in a series of accidents or was financed with drug money? Classic cars with a complete history documented by papers, photographs or even shiny awards are generally worth more than similar models with a patchy record.

‍Colour combination. Ferrari has red, Bugatti has blue and Jaguar has green. A traditional color combination that is perceived as appealing in the eyes of the collector community can have a positive influence on price determination. While tastes may differ, a red Ferrari with a black interior is likely to attract more interest than a purple one with white seats.

‍The perfect collectible is …
‍The contents of this article give an insight into how two similar car models can differ significantly in price. Depending on the car, the question of whether the restoration grade is 2 or 1 can mean a difference in price of thousands or even millions of Euros. If a well-documented classic car in mint condition comes with rare options such as a special engine, hardtop or lightweight wheels, its value can increase even further.

Is there such a thing as the perfect collectible car? While this is a difficult question to answer, the last two blog posts have attempted to define the characteristics a car should have to be classified as an amazing blue-chip collectible. The car is very rare and its historical significance is reflected in its technological innovations and many racing successes. It bears the name of a prestigious brand, is original and in pristine condition and comes with comprehensive documentation to prove its authenticity. The car furthermore has a historic color combination and interesting optional extras.

0ne of only two 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupés changed hands. Designed by chief engineer Rudolf Uhlenhaut, this silver classic hyper car is considered one of the cornerstones of automotive history. It was sold to a private collector for a cool €135,000,000.