The economics of classic car investing?

neilbardsley · Post by **neilbardsley** » Thu Apr 26, 2012 1:16 pm

http://www.telegraph.co.uk/finance/pers ... tment.html

Interesting but not much depth in this article. I partly bought my 356 as an alternative to my stock pension. Which have gone sideways for the 16 years I have been working (dotCom and credit bubbles). Anybody have a more informative article or opinions? I certainly agree with the flight to quality arguement but these cars as investments do have a high cost of carry and no real transparent market where prices can be seen if you didn't love the car you probably wouldn't invest?

hot66 · Post by **hot66** » Thu Apr 26, 2012 2:10 pm

isn't it the rule that if everyone's talking about it .. that means its time to get out

or , like most of us , we're just here for the cars, value has little bearing on enjoyment or expenditure

neilbardsley · Post by **neilbardsley** » Thu Apr 26, 2012 2:13 pm

hot66 wrote:isn't it the rule that if everyone's talking about it .. that means its time to get out

You are not wrong!

DanG · Post by **DanG** » Thu Apr 26, 2012 7:12 pm

My view is simple; you can't take your ISA out for a drive on a sunny day, and car prices seem to be significantly less volatile than markets in this brave new world...

Darren65 · Post by **Darren65** » Thu Apr 26, 2012 8:41 pm

Everything is just one big circle anyway - the 'investment' angle is something I only use when justifying to my wife how much I'm spending

Jasper · Post by **Jasper** » Fri Apr 27, 2012 9:12 am

This is a topic very close to my heart

I sold a share portifolio in 2006, made money and put it into classic cars. I bought in the USA
because of the quality of car (weather) and value $ 1.50 =€1.00,$2.00 + =£1.00. At that time
in CA, there was abundance of " motivated sellers" and top quality original Porsches and Mercedes Pagodas. To make it economical you had to buy 4 cars ( not a problem as there are 4 car nuts in my immediate family), not that easy to get 4 v good cars in a short period of time.

Regarding the investment aspect, I would say buy what you like, buy the very best you can afford.
One will enjoy a very good specimen, and in 5 yrs it will have kept pace + with inflation. The enjoyment factor is huge, sharing knowledge, seeing ones " rolling art " , alternative hedge, a spread of asset classes in one's portifolio. Like property not always easy to liquidate, as its an indulgence !

But for pure investment one has to buy the " right cars " think with ur head not heart. Limited edition RS models , and IMO one may not be inclined to drive them as they are too valuable, which defeats
the purpose. Also one needs proper storage.

In summary, one can't drive a painting, or a share portifolio, buy the best, enjoy and its a bonus if
it rises considerably in value, look what happened in the 80's, Daytona's etc £1million and now ?
Classic car investment is very volatile ! Enjoy I have this debate regularly with my wife a GT3 investment and fun

I can argue both sides on this debate, if you can recover the initial
cost anything else is a bonus. Now what about increasing the alternate assets to balance my portifilio ! If I could get at my pension

964 RS ,GT3 RS, 968 CS, SLS, 8C, 4C,R8, thinking can be the best part, hence I take CCW or C&SC to the loo, and can be gone a long time ... if I had £20k to spend what would i buy

neilbardsley · Post by **neilbardsley** » Fri Apr 27, 2012 10:53 am

Jasper wrote:964 RS ,GT3 RS, 968 CS, SLS, 8C, 4C,R8, thinking can be the best part, hence I take CCW or C&SC to the loo, and can be gone a long time ... if I had £20k to spend what would i buy

Apologies I don't know some of these cars/acronyms! SLS, 8C, 4C R8 (Audi?) CCW or C&SC?

left4dead · Post by **left4dead** » Fri Apr 27, 2012 11:09 am

neilbardsley wrote:
Jasper wrote:964 RS ,GT3 RS, 968 CS, SLS, 8C, 4C,R8, thinking can be the best part, hence I take CCW or C&SC to the loo, and can be gone a long time ... if I had £20k to spend what would i buy
Apologies I don't know some of these cars/acronyms! SLS, 8C, 4C R8 (Audi?) CCW or C&SC?

Mercedes SLS, Alfa Romeo 8C & 4C, Audi R8, Classic Car Weekly, Classic & Sports Car.

sjm · Post by **sjm** » Fri Apr 27, 2012 4:51 pm

Jasper wrote:If I could get at my pension 964 RS ,GT3 RS, 968 CS, SLS, 8C, 4C,R8, thinking can be the best part, hence I take CCW or C&SC to the loo, and can be gone a long time ... if I had £20k to spend what would i buy

Jasper, we must NEVER meet, especially not in a pub! That list is extremely close to my own dream list/ pension list (although you can keep the R8!) Funnily enough at the moment I'm trying to find a car to get me through the next couple of years, want something unusual, pref 'classic' and depreciation-proof - this is a stop-gap toy until hopefully I can get what I really want in 2 or 3 years (hence why it needs to be depreciation proof!) I'm obsessed with panzerwagon SLs at the moment....

scalino65 · Post by **scalino65** » Fri Apr 27, 2012 7:04 pm

I don't personally buy into the investment side of its but that's by the by. My question is, if you do hold these as a monetary investment, what would be your indicator that it's time to cash out? If its simply 'when/if I need the money' then I'd say that's not really an investment for a return as your not actually playing the market but rather circumstance.
My own view is its a nice bit of weight to the man Maths argument. Very interested to hear others thoughts.

DanG · Post by **DanG** » Fri Apr 27, 2012 7:14 pm

£20k today... Hmmm.

A couple of 1974 G series 911's maybe. Matching numbers etc etc

Citroen 2cv's too.

At work we look at all of this as an inverted bell curve. Modern metal still has a long way to fall on the LHS whereas older cars are at the bottom or on the RHS going up.

Clever bit is buying at the bottom.

Some of us (at work) would argue that's a lot easier than fund or sector picking these days....

scalino65 · Post by **scalino65** » Fri Apr 27, 2012 7:25 pm

DanG wrote:£20k today... Hmmm.

A couple of 1974 G series 911's maybe. Matching numbers etc etc

Citroen 2cv's too.

At work we look at all of this as an inverted bell curve. Modern metal still has a long way to fall on the LHS whereas older cars are at the bottom or on the RHS going up.

Clever bit is buying at the bottom.

Some of us (at work) would argue that's a lot easier than fund or sector picking these days....

Interesting. Sounds like you've done some analysis. So, what would be your indicator to sell? Or doesn't it work like that? For example if I was holding a stock, I'd consider selling if divis were poor or on bad news flow,etc. the 'sell' indicators for old cars are, i guess, demand slowing, cars sticking around, interest rates rising, some other sector starting to look good,etc. anything more scientific?

DanG · Post by **DanG** » Fri Apr 27, 2012 7:32 pm

Sell indicators on cars I have no idea about to be honest.

I guess the end of petrol, a barn find of 1000 perfect 911s, huge tax hikes on pre 1972 cars, emissions testing MOTs etc would get prices moving down suddenly. Or maybe a significant recession.

I would venture that classics are a buy and hold strategy as opposed to a tactical position.

scalino65 · Post by **scalino65** » Fri Apr 27, 2012 7:39 pm

Hi dan. Thanks for your reply. I guess it all comes down to 'who the hell knows, take your chances!'
I used to work at a hedge fund and was recently kicking around the idea with the brightest guy I know there about a pooled investment with the ability for punters to book cars out a bit like a car club.
Might work, might not, but would be a laugh...which brings me back to the 'man maths' again!
So in summary, who knows?
Cheers
Will

Jasper · Post by **Jasper** » Fri Apr 27, 2012 8:04 pm

sjm wrote:
Jasper wrote:If I could get at my pension 964 RS ,GT3 RS, 968 CS, SLS, 8C, 4C,R8, thinking can be the best part, hence I take CCW or C&SC to the loo, and can be gone a long time ... if I had £20k to spend what would i buy
Jasper, we must NEVER meet, especially not in a pub! That list is extremely close to my own dream list/ pension list (although you can keep the R8!) Funnily enough at the moment I'm trying to find a car to get me through the next couple of years, want something unusual, pref 'classic' and depreciation-proof - this is a stop-gap toy until hopefully I can get what I really want in 2 or 3 years (hence why it needs to be depreciation proof!) I'm obsessed with panzerwagon SLs at the moment....

I fully agree regarding the SL panzerwagons, but I like the R129 started in 1990 very colour sensitive
can be bought in the autumn from a MB club member starting at £5k + , how about a 32 911 bullet proof and rising in value

and lovely to drive ....or a Honda NSX ?

DDK - Die Deutschen Klassiker