Autos

Classic Car Buyers, Beware of Fakes


In the 1930s, British sports car maker MG manufactured exactly 33 of its vaunted K3 open-top race cars. But if you want to buy one today, there are more than 100 to choose from. No, the defunct manufacturer didn’t restart production. The tripling of the K3 fleet is part of the booming trade in fake antique autos as soaring prices for classic cars spur sophisticated counterfeits. “In the 1990s, I would find one faked car every five years,” says Norbert Schroeder, who verifies classic cars at TUV Rheinland, a Cologne (Germany)-based technical testing company. “Now I find up to five fakes a year.”

Fueling the jump in the number of bogus rides is heated demand from well-heeled collectors. Auction values for vintage cars have risen more than sevenfold over the past decade, according to Historica Selecta, a consulting company that specializes in vintage autos. In 2011, British auction house Bonhams sold a 1955 Aston Martin DB2/4 for £230,000 ($380,000). That was more than four times the price the same car sold for—in unchanged condition—in 2003, says James Knight, director of the auction house’s motoring department.

Bonhams, which says sales of classic cars now exceed $1 billion annually, in July 2013 sold a 1954 Mercedes-Benz F1 race car for a world record price of £19.6 million. And at a Dec. 1 auction it sold dozens of pricey vintage autos, including a 1964 Porsche 904 GTS racing coupe for £1.15 million, a 1959 Aston Martin DB4GT Sports Saloon for £1.57 million, and a 1956 Jaguar D-Type “Shortnose” for £2.58 million. “People with a lot of money prefer to have a classic car in the garage than money in the bank,” says Adolfo Orsi, president of Historica Selecta.

That’s one reason criminals are going to unprecedented lengths to grab a piece of the action. Sophisticated forgers have been known to buy old screws and washers and leave reproduced frames out in fields to weather. “When there is a lot of money, there are fakes,” Orsi explains. “In today’s world, it is possible to replicate everything.”

Bernhard Kaluza, vice president of international antique auto club Fédération Internationale des Véhicules Anciens (FIVA), says counterfeiters even bought an old movie theater in France to get the worn antique leather from the seats. “The people faking cars are not a few lone wolves,” says TUV’s Schroeder, who’s traveled as far as California to authenticate cars, evaluating welded joints and chemically testing the metal to determine its age. “It’s organized crime, because it’s expensive to build such cars and you need a good infrastructure to do it.”

Christian Jenny, retired chief information officer of Zurich Insurance Group, spent five years proving his rare 1952 Jaguar C-Type racer was authentic after another car came on the market claiming the same identification number. The owner of 13 vintage Jaguars consulted many experts, including Norman Dewis, chief test engineer for the British luxury brand for more than 30 years. With the car valued at about $2.5 million, a lot was at stake. “It might be a problem if you tried to sell the car years later,” Jenny says. Verifying it was “a precautionary measure.”

Authenticaton can require sleuthing. Simon Kidston, a classic-car consultant in Geneva, was once offered an Alfa Romeo Giulia TZ racer from the 1960s by a seller who claimed to have discovered it in a scrap yard in Italy. After consulting numerous sources, Kidston eventually discovered a photo of a car with the same identification number that was involved in a fiery crash at the annual Sebring 12-hour endurance race in 1964. The driver barely escaped. “It was clear there could be nothing left of the original car,” says Kidston, who rejected the offer.

Many frauds are more subtle, like taking an authentic vintage Porsche 911 and turning it into a high-performance racing version, which could quadruple the car’s value. Other scammers take authentic parts and build a vehicle around them, making the line between refurbished and forged murky. “There are plenty of adapted cars,” says Bonhams’s Knight. “Fake has another meaning: It’s trying to deceive.”

The extent of classic-car fraud is difficult to track because few victims come forward. Still, to prevent the threat of counterfeits from discrediting the whole market, FIVA has proposed issuing a standardized verification document for each antique car, Kaluza says, to improve transparency and help keep buyers from getting duped. “The whole problem of faked classic cars is being treated warily” because people in the market “don’t want to ruin the good mood,” Schroeder says. “I want to speak out on this before the whole thing blows up.”

The bottom line: Selling vintage cars has become a $1 billion-a-year business. Counterfeiters have taken notice.

Mangasarian is a reporter for Bloomberg News in Berlin.
Winters is a reporter for Bloomberg News in Zurich.

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