$5M to invest in classics for long term..

[cardigankid]

In principle he is doing the right thing as growing wealth across the globe means the sky is the limit for really collectible cars.

He needs to accept that like fine wines classic cars have to be kept in controlled environment and looked after.

Having made that point my list would include:-

1. James Hunt's Hesketh 308/1 coming up at RM Auctions at Monaco. Have a look at some other classic racing cars too.
2. Almost any Aston Martin despite what they said - old DB5 ' 6 probably OTT. Buy a 2+0 DBS Manual and a DB9.2 Volante
3. Jaguar X100 XKR 4.2-S Coupe & Convertible
4. Porsche 996 GT3 RS Red on White
5. Ferrari 575 HGTC Fiorano Pack forget the flip flop edition
6. Mercedes SLS AMG Black Edition Coupe
7. Jensen Interceptor 3
8. Bentley R Type Continental
9. Jaguar XK 150S 3.8
10. Vauxhall VX220 Turbo

Cannot. Lose.

[cardigankid]

Not sure why you would bother with the Enzo - there are so many Ferrari & Lamborghini hypercars whose only distinction is that they cost nearly £1m and they are fast for their era but quickly superseded by production cars like the latest 458 which would leave an Enzo for near dead. Its a lot of money for something not that desirable and not that special.

Really old Rollers which someone was suggesting are all very nice, but there are a lot of them around, and the market isn't that big, and is mostly made up of old buffers. Even a serious car enthusiast might struggle to tell you the difference between a Phantom II and a Phantom III. They are physically impressive but lack cachet. The only car of that era worth considering is the 4 1/2 Litre Bentley, preferably a Blower. Look at the DB5 - there were approximately 1000 built and then Goldfinger happens. The car oozes cachet, and is instantly globally recognisable.

If your friend has that amount of dolly and doesn't buy the Hesketh he is simply mental. Estimate $400-600000 I believe, and cheap at anything like that price. Forget the Enzo.

Edited by cardigankid on Wednesday 5th March 08:19

[BlackpoolRock]

Any 60's Ferrari. Although I think a 288 GTO or a McLaren F1 could be one of the best investments at the moment.

[LordFlathead]

Not to sure about the long-term 25 year-ish investment.

Will we even have petrol then?

[tobinen]

This brace is up for sale. I'd have these if I had the cash

[Paracetamol]

cardigankid said:

Not sure why you would bother with the Enzo - there are so many Ferrari & Lamborghini hypercars whose only distinction is that they cost nearly £1m and they are fast for their era but quickly superseded by production cars like the latest 458 which would leave an Enzo for near dead. Its a lot of money for something not that desirable and not that special.

The Enzo is already purchased

To argue that a newer car has better performance than an older car so its not a classic is a pretty stupid argument! I dont know of a limited edition V12 Ferrari that 'isn't special or desirable'. In my little world even a humble Mondial is special!

The very fact that an Enzo trades for more than its new price is surely a testament its desirability.

The Enzo represents the last of the normally aspirated v12 hyper car Ferraris..now look at the F50. It wasn't deemed remarkable but now its fast rising..

Some of what we are doing is to try to work out what will be desirable to someone in their 20s or 30s now who will have the funds to buy such things in their 40s..hence the Enzo.

There is no magic formula but we are seeing some fallout on values of 40s and 50s cars as we see the number of people who were interested in such cars begin to diminish...

[Paracetamol]

cardigankid said:

In principle he is doing the right thing as growing wealth across the globe means the sky is the limit for really collectible cars.

He needs to accept that like fine wines classic cars have to be kept in controlled environment and looked after.

Having made that point my list would include:-

1. James Hunt's Hesketh 308/1 coming up at RM Auctions at Monaco. Have a look at some other classic racing cars too.
2. Almost any Aston Martin despite what they said - old DB5 ' 6 probably OTT. Buy a 2+0 DBS Manual and a DB9.2 Volante
3. Jaguar X100 XKR 4.2-S Coupe & Convertible
4. Porsche 996 GT3 RS Red on White
5. Ferrari 575 HGTC Fiorano Pack forget the flip flop edition
6. Mercedes SLS AMG Black Edition Coupe
7. Jensen Interceptor 3
8. Bentley R Type Continental
9. Jaguar XK 150S 3.8
10. Vauxhall VX220 Turbo

Cannot. Lose.

Some great cars on this list..i think the SLS will be very desirable in years to come...

[Mr. Magoo]

Some of what we are doing is to try to work out what will be desirable to someone in their 20s or 30s now who will have the funds to buy such things in their 40s..hence the Enzo.

There is no magic formula but we are seeing some fallout on values of 40s and 50s cars as we see the number of people who were interested in such cars begin to diminish...
[/quote]

But there is a formula, its called compound interest. Your Enzo was what 650K USD new in 2003? I suspect it was about 1.2mio USD now. That's 6% compound in 10 years. Not a lot when you consider the servicing bills will reduce that interest to about 4%.

If you now extrapolate forward when the current 20 yrs olds are 40 you would hope that it continues its asset growth at the same rate of the last 10 yrs. Therefore it will be worth 4 mio+ USD in 2034. Again that's gross and not inclusive of storage, maintenance and the impact usage has on residuals. This also does not factor in any dip in exotic car values in a 30 year period.

[cardigankid]

Paracetamol said:

cardigankid said:

Not sure why you would bother with the Enzo - there are so many Ferrari & Lamborghini hypercars whose only distinction is that they cost nearly £1m and they are fast for their era but quickly superseded by production cars like the latest 458 which would leave an Enzo for near dead. Its a lot of money for something not that desirable and not that special.

The Enzo is already purchased

To argue that a newer car has better performance than an older car so its not a classic is a pretty stupid argument! I dont know of a limited edition V12 Ferrari that 'isn't special or desirable'. In my little world even a humble Mondial is special!

The very fact that an Enzo trades for more than its new price is surely a testament its desirability.

The Enzo represents the last of the normally aspirated v12 hyper car Ferraris..now look at the F50. It wasn't deemed remarkable but now its fast rising..

Some of what we are doing is to try to work out what will be desirable to someone in their 20s or 30s now who will have the funds to buy such things in their 40s..hence the Enzo.

There is no magic formula but we are seeing some fallout on values of 40s and 50s cars as we see the number of people who were interested in such cars begin to diminish...

In twenty years time nobody will even know what an Enzo was, nor care if it comes to that. That is the point, brother. IT IS NOT A CLASSIC ANYTHING. You would be far better with a 365 BB. The Enzo is just an expensive Ferrari for people with more money than sense, nothing more. Bit like the FXX. So if our investor, if he exists, has bought one he has been misinformed and ill advised. If the Hesketh sells for $750k it is a million times a better investment than an Enzo.

[Paracetamol]

Mr. Magoo said:

Some of what we are doing is to try to work out what will be desirable to someone in their 20s or 30s now who will have the funds to buy such things in their 40s..hence the Enzo.

There is no magic formula but we are seeing some fallout on values of 40s and 50s cars as we see the number of people who were interested in such cars begin to diminish...

But there is a formula, its called compound interest. Your Enzo was what 650K USD new in 2003? I suspect it was about 1.2mio USD now. That's 6% compound in 10 years. Not a lot when you consider the servicing bills will reduce that interest to about 4%.

If you now extrapolate forward when the current 20 yrs olds are 40 you would hope that it continues its asset growth at the same rate of the last 10 yrs. Therefore it will be worth 4 mio+ USD in 2034. Again that's gross and not inclusive of storage, maintenance and the impact usage has on residuals. This also does not factor in any dip in exotic car values in a 30 year period.

Ah...so myopic Mr Magoo...you have to understand that the Enzo represents a small amount of the overall wealth of people who generally own them. They have much more than 650k invested in cash and other assets. Cars are usually a depreciating asset class and bought with disposable income, so when one goes up you cannot compare it to holding cash- for a car to not depreciate means its doing what 99.999% of new cars don't do- lose money.

Add to this, your assumed 4% does not take into account inflation either. Historically you would have received an average of around 3% pa from 2003 to 2014. Inflation would be 2pc pa and so your real rate was 1% pa on your 630k.

Further the investment in the Enzo is within a portfolio of cars- some of which are 'classic' classic whilst others are a long term punt.- and within the overall assets held, the cars themselves are diversified asset class.

We are seeing the rich get ever richer and to an extent that is beyond our understanding- its happened before (look at the wealth of the super rich Americans at the turn of the last century). This time round these guys have alot more choice of things to choose from and Ferraris are number 2 on their list after houses- hence the boom we are seeing.

Edited by Paracetamol on Saturday 8th March 01:18

[thegreenhell]

cardigankid said:

In twenty years time nobody will even know what an Enzo was, nor care if it comes to that. That is the point, brother. IT IS NOT A CLASSIC ANYTHING. You would be far better with a 365 BB. The Enzo is just an expensive Ferrari for people with more money than sense, nothing more. Bit like the FXX. So if our investor, if he exists, has bought one he has been misinformed and ill advised. If the Hesketh sells for $750k it is a million times a better investment than an Enzo.

I'll be utterly amazed if the Hesketh makes anywhere near that amount. Old F1 cars have a tiny market compared to road cars, mainly as there are so few opportunities to use them. If it makes good money now, and in this current crazy market who knows, then it will only prove to be good investment if the new owner can offload it some time in the future for an even more ridiculous price. Until then, it will only have proved to have been a good investment for its current owner, who will no doubt have bought it for relative peanuts before this current bubble, and before the recent Rush movie brought Hunt's name back into the public consciousness.

[lamboman100]

Paracetamol said:

So a close friend who recently made alot of money by selling his business has asked me to work with him in putting together a collection of cars- he has no interest in quick flips and likes cars but isnt a mega car guy (he may not even see the cars let alone drive them!)- so very niche cars that he hasnt heard of or seen will not be of interest. All cars have to be sports cars. Acquisitons so far

1) Ferrari Enzo- Why?

-Last of normally aspirated hypercars (pre Hybrid drivetrains)
-Amazing dynamics and performance
-relative ease of ownership (!)
-Only made in small numbers
-Brutal looks

2) Mercedes Gullwing- Why?

-Awsome looks
-Relatively rare
-The best car from the best car company in the world

3) Lambo Miura

-Drop dead gorgeous looks
-Awesome perfomance in its time
-Did I say looks

4)A 60s Ferrari of some form

5)BMW Z8- awsome looks, clasic in the making

6)Alfa 8C- awsome looks, alfa is about to make a come back


The 1st three have been purchased. This leaves $1.5M to spend on 4-6. Whould you agree with my approach

Cars as an investment are rather overrated (rollercoaster prices or high maintenance costs). Often just vanity purchases.

Farmland and wind turbines, or shares, are a more favourable bet (diminishing supply or instant liquidity).

If it must be cars, it will be worth going to visit some of the specialist storage companies. Chat with them for a few hours.

I met one last month who suggested the Porsche Carrera GT will triple in value in the next decade to a million quid. Rare, fast, reliable'ish, pretty, perceived gamechanger etc. Whether it pans out to a cool mill', who knows. But they will at least have an insider's feel for what cars are being stored and taken off the market right now.

[Paracetamol]

lamboman100 said:

Cars as an investment are rather overrated (rollercoaster prices or high maintenance costs). Often just vanity purchases.

Farmland and wind turbines, or shares, are a more favourable bet (diminishing supply or instant liquidity).

If it must be cars, it will be worth going to visit some of the specialist storage companies. Chat with them for a few hours.

I met one last month who suggested the Porsche Carrera GT will triple in value in the next decade to a million quid. Rare, fast, reliable'ish, pretty, perceived gamechanger etc. Whether it pans out to a cool mill', who knows. But they will at least have an insider's feel for what cars are being stored and taken off the market right now.

Thanks- there is alot of talk around Carrera GTs right now...I could never get on with the clutch on them but they do look wonderful

[cardigankid]

thegreenhell said:

I'll be utterly amazed if the Hesketh makes anywhere near that amount. Old F1 cars have a tiny market compared to road cars, mainly as there are so few opportunities to use them.

That is the kind of thing that makes a legend, and a legend is what you need. This is a key car used by a World Champion, the one used in his first F1 victory, the one in which he carried out his classic Woodcote move on Ronnie Peterson. That will make it priceless. How much are C and D Types worth? Against that, what makes an Enzo special?

[lowdrag]

Surely a part of the attraction of cars, any cars, as an investment is the tax position. I really don't care if it is a 4% return net of storage and maintenance when compared to other investments because it is tax free. No CGT, no income tax, zero. Forestry comes to mind too. Take away the tax breaks and where are you? Back amongst the melting pot on an equal footing with other anodyne investments, that's where. Here in France we have the IST, or wealth tax and thanks to Hollande a new 75% maximum income tax rate, so is it any wonder that people are looking elsewhere to invest? Wine seems for now to have had its day and cars are the new buzz word. Take away the tax breaks though, and the market might collapse like a pack of cards. Back to the collected cars; I'm still surprised that there was nothing pre-war though. The collection seems rather lacking in inspiration to me. But then if we all thought the same we'd have nothing to discuss.

[Paracetamol]

We thought long and hard about cars with racing heritage. We didn't proceed for 2 reasons

1. Neither of us is actually interested in racing and the cars will never be useable (remember that the worst case is that there is alot of desirable metal to play with if the market tanks- not the case with race cars)

2. The market is very small and when we have consulted like minded collectors, they do not show interest either.

[cardigankid]

It is obviously his money and his call, but I struggle to follow the idea behind eliminating anything with racing heritage. A 60's Ferrari, yes, like a 275GTB or a Daytona, but beyond the intrinsic beauty and engineering of the car, you immediately think who is it associated with, in that case the whole 60's jet set and Steve McQueen. That is the essence of a classic. I can't off the top of my head think of anyone or anything to associate an Enzo with. Somebody said it was the last naturally aspirated V12. Eh? Who ever used the car for anything except a garage queen? Like the Reventon or the One-77, it is just a way of parting suckers from their cash. Does an association with Jay Kay add value? He may be a nice guy, but not in my view. I would far far rather have one of the latest lightweight 458's.

Association with racing adds immeasurably to a car's value. What is the most valuable of the XK150's? Donald Campbell's one, if you can find it. The most valuable E-Type? The factory ptototype, the racing lightweights or the ones owned by people like George Best or Innes Ireland (both sportsmen).

Bear in mind you are trying to predict what will be valued twenty years down the line, and it is unlikely to be what is today seen as exotic. I agree with the Z8 by the way, an epic car, and once again featured in a James Bond film. So the 'Rush' link is an asset. Cars generally aren't everyone's bucket - hence the importance of a good story, and sometimes the story only becomes clear with the benefit of hindsight. Forget trying to buy GTO's or 250GT Californias - they are already at or beyond their peak. It is the cars available at a reasonable price now that offer the prospect of capital growth. I recommend buying anything from the current Aston Martin range, the company's relative difficulties and relatively small output, which might make them immediately unfashionable, are actually their cars' greatest long term asset. The fact that they are also racing helps.

Edited by cardigankid on Sunday 9th March 17:30

Edited by cardigankid on Sunday 9th March 17:32

[Mr. Magoo]

Add to this, your assumed 4% does not take into account inflation either. Historically you would have received an average of around 3% pa from 2003 to 2014. Inflation would be 2pc pa and so your real rate was 1% pa on your 630k.

Further the investment in the Enzo is within a portfolio of cars- some of which are 'classic' classic whilst others are a long term punt.- and within the overall assets held, the cars themselves are diversified asset class.


I think you just answered my point - it isn't an 'investment' (or albeit its a bad one). Your thread should really read 5M to 'spend' on classics. In which case I would just buy the cars you like the look of the most and enjoy driving the most, just as a art collector does paintings. There's a good chance they will appreciate by a negligible amount once costs are stripped out. There is a even bigger chance they will depreciate from where they are now.

A mate bought a string of desirable classic Ferraris a while back and sold them all within 2 years as he realised that once you are past the willy waving then they were just sitting there costing money in storage and fettling - tuning triple webbers after a period of lay up isn't a 10 minute job.

[lowdrag]

I wonder if any of you feel the same as me about the state of the market today? I was happy when I bought my cars, at prices which today seem ludicrous, not as an investment of course but out of passion for the make, but somehow I feel my passion has been hijacked by the money makers. The actual Lynx low drag I nearly bought is for sale at getting on for three times the price of 12 years ago. Furthermore, this hijacking has made me feel somewhat uncomfortable about driving the cars nowadays. I am more careful, don't drive like I used to, and am always aware just how high a percentage of my overall wealth they now are. For over 20 years after the last boom/bust the E-type was worth around £25,000 or so, not a vast sum in the scheme of things and actually an expendable like any other car I suppose. But now you only have to look at the Pistonheads for sale columns to see what is now the supposed value of such cars and it makes me uncomfortable to some degree. I can't take it with me when I go and the kids will sell them straight away so I shouldn't really care, but still I do. I wish the owner of the cars in this thread nothing but pleasure with his acquisitions, but the whole premise of the thread is somewhat at odds with my sentiments towards my cars.

[downr]

I hear you lowdrag, but I'd urge you to carry on driving them - that's what they were made for (and insurance helps!)

I guess on a slightly more positive note; with classic cars appreciating in value it makes more and more sense for them to be restored. So hopefully well get to see more on the road (I'm thinking ordinary classics rather than the £1m plus jobs)