Buying wisely and cars as investments
Discussion
Hi all. I keep seeing threads where someone is considering buying a car and asks about values only to be hit with the inevitable "Don't buy a car as an investment" response. Is it just me or is that not knee-jerk advice? Apologies if this has been done before - well of course it has - but I can't believe that anyone putting £50/100/200/300/etc thousand of hard earned cash into a car doesn't do the maths and see what it is going to cost over three to five years. Even if the answer is half it's purchase price and you are comfortable with that, surely you still acknowledge that before making the purchase?
Now I've never bought a new car, so I can't comment on showroom tax, but I've always known what I can afford to spend on a car before I start the search and I've subsequently always found the best deal in the used car section. And always, as part of my research, I estimate what I could sell the car for when I next want to change it and thus use the proceeds for my next purchase. Of course I could be way out but there is generally enough data available to at least be in the ballpark. So when, as part of that process, I ask people where they think the market is on a particular car, it's not because I am automatically considering the car an investment, it's because I'm a petrolhead and this is unlikely to be the last car I own hence my interest in what it will cost me over the period of my ownership. Surely this is buying wisely, and should apply to any car purchase where you intend to use the car a fair bit, if not daily.
As for buying cars as an investment, yes it exists and many investors have done very well out of the classic car market. It's a different sort of purchase of course, you're not going to put too many miles on, it's unlikely to circle a track in anger, and it will certainly see a lot more polish than spit. But what's with the general criticism of people looking to do this? All investments have risk, but the financial market has hardly been stellar over the last few years and the outlook isn't much better, so why not look for a car that you believe is at the bottom of it's depreciation curve, put it away except for a few summer day outings, and enjoy the role of custodian for the next generation. With some luck you will make a bit, at worst you are unlikely to lose much, and all the while the car is yours to enjoy. And don't tell me that the only enjoyment is to drive it. Sure it's the pinnacle, but pop a 288 GTO in my garage and tell me I can only sit in it and drive it a few times a year and you won't hear me complaining.
Then there is the middle ground. Let's say I have £150k or thereabouts to spend on a car. £150k of hard earned cash that I am now comfortable to spend but not to blow - it can be any number of course, £150k is pretty rare air but it makes for some interesting options. It won't be my daily but nor will it be a garage queen. Do I spec up the ultimate new Porsche, or a McLaren Sports Series, or do I go for the best manual F355 I can find? Or how about a 458, the last naturally aspirated V8 Ferrari, supposedly near the bottom of it's depreciation curve? 360 and 430 prices are continuing to go up. Or what about a 650S - have they reached the bottom of the curve? My point is simply that unless you are happy just to write the money off (and good for you if you can), most of us are faced with these questions, and they are absolutely valid and sensible ones to ask.
Rather than flame people for asking about market trends, we should ask what the intention is for purchasing the car. Why did you buy your car(s) and what are you aiming to realise over the next few years? Motoring nirvana regardless of cost, a tidy profit, or something in between while not losing your shirt? I'm happy to start, add your car(s) to the list and lets see what we have.
Ferrari F430 - Something in between.
Ferrari 612 OTO - Tidy profit.
Porsche 997 manual - Motoring nirvana
Now I've never bought a new car, so I can't comment on showroom tax, but I've always known what I can afford to spend on a car before I start the search and I've subsequently always found the best deal in the used car section. And always, as part of my research, I estimate what I could sell the car for when I next want to change it and thus use the proceeds for my next purchase. Of course I could be way out but there is generally enough data available to at least be in the ballpark. So when, as part of that process, I ask people where they think the market is on a particular car, it's not because I am automatically considering the car an investment, it's because I'm a petrolhead and this is unlikely to be the last car I own hence my interest in what it will cost me over the period of my ownership. Surely this is buying wisely, and should apply to any car purchase where you intend to use the car a fair bit, if not daily.
As for buying cars as an investment, yes it exists and many investors have done very well out of the classic car market. It's a different sort of purchase of course, you're not going to put too many miles on, it's unlikely to circle a track in anger, and it will certainly see a lot more polish than spit. But what's with the general criticism of people looking to do this? All investments have risk, but the financial market has hardly been stellar over the last few years and the outlook isn't much better, so why not look for a car that you believe is at the bottom of it's depreciation curve, put it away except for a few summer day outings, and enjoy the role of custodian for the next generation. With some luck you will make a bit, at worst you are unlikely to lose much, and all the while the car is yours to enjoy. And don't tell me that the only enjoyment is to drive it. Sure it's the pinnacle, but pop a 288 GTO in my garage and tell me I can only sit in it and drive it a few times a year and you won't hear me complaining.
Then there is the middle ground. Let's say I have £150k or thereabouts to spend on a car. £150k of hard earned cash that I am now comfortable to spend but not to blow - it can be any number of course, £150k is pretty rare air but it makes for some interesting options. It won't be my daily but nor will it be a garage queen. Do I spec up the ultimate new Porsche, or a McLaren Sports Series, or do I go for the best manual F355 I can find? Or how about a 458, the last naturally aspirated V8 Ferrari, supposedly near the bottom of it's depreciation curve? 360 and 430 prices are continuing to go up. Or what about a 650S - have they reached the bottom of the curve? My point is simply that unless you are happy just to write the money off (and good for you if you can), most of us are faced with these questions, and they are absolutely valid and sensible ones to ask.
Rather than flame people for asking about market trends, we should ask what the intention is for purchasing the car. Why did you buy your car(s) and what are you aiming to realise over the next few years? Motoring nirvana regardless of cost, a tidy profit, or something in between while not losing your shirt? I'm happy to start, add your car(s) to the list and lets see what we have.
Ferrari F430 - Something in between.
Ferrari 612 OTO - Tidy profit.
Porsche 997 manual - Motoring nirvana
Edited by anonymous-user on Monday 8th August 13:25
mwstewart said:
Well, that's how I buy cars. I see one I like, buy it, and write off that money.
I don't get buying as investments or buying something you're afraid to use because of mileage/depreciation, but then I'm a car guy not an investor.
And you can't be both? Does choosing to invest in cars, in addition to the ones you have to drive, instead of investing it elsewhere make you "not a car guy"? Surely you invest in markets that you are interested in and have some understanding of - that makes car investments an option for a "car guy" to put at least some of his money?I don't get buying as investments or buying something you're afraid to use because of mileage/depreciation, but then I'm a car guy not an investor.
Obviously you need to spend what you can afford on a car; and, if you are going to trade in in future, need to think about what that might look like.
But a number of people on here seem to have become hooked on what their car might be worth, either today, or at some time in the future, because the value's gone up.
That's what drives some of us to say, do it for the love of the car unless you're in the business.
In the long run, today and yesterday's cars will most probably go the way of stagecoaches - so enjoy'em while there's still petrol on sale!
But a number of people on here seem to have become hooked on what their car might be worth, either today, or at some time in the future, because the value's gone up.
That's what drives some of us to say, do it for the love of the car unless you're in the business.
In the long run, today and yesterday's cars will most probably go the way of stagecoaches - so enjoy'em while there's still petrol on sale!
Ferruccio said:
But a number of people on here seem to have become hooked on what their car might be worth, either today, or at some time in the future, because the value's gone up.
Totally agree, and the last thing I want is another thread on values. Rather I'm interested in why people here bought the car(s) they have. We're a small representation of 'supercar" owners, and we're clearly all interested enough in cars to participate in a car forum. Mark, you're a fortunate guy if you can buy any car you like and write the money off - although how many miles have you put on that F430 of your's? 
Look, I'm not trying to argue a point but I find it interesting how anyone considering buying a £100k car who asks about the state of the market is told to just buy what you like like and forget about values. I would imagine this is a pretty sensible part of the forum so I struggle to see that advice being applied elsewhere in your life.. or am I wrong?thecook101 said:
And you can't be both? Does choosing to invest in cars, in addition to the ones you have to drive, instead of investing it elsewhere make you "not a car guy"? Surely you invest in markets that you are interested in and have some understanding of - that makes car investments an option for a "car guy" to put at least some of his money?
Absolutely with - like you say - at least two cars; one being the investment and one the car for driving pleasure (the PH bit). My view is that owning for investment is the antithesis of owning for pleasure because one is never free from a concern about future value borne out of the mileage and condition changes realised by actually driving the thing. I don’t think anyone on PH has a problem with buying a car as an investment in its own right, but PH is a site for owners of cars who focus on driving and not the value of the thing hence most get a bit fed up of reoccurring value discussions.
thecook101 said:
... although how many miles have you put on that F430 of your's?
Ha - bugger all so far as it has been in bits. We're headed to southern Spain in two weeks then the Swiss Alps and south of France in Sept - it'll be a nice little interlude before I take it to bits again 
.mwstewart said:
Ha - bugger all so far as it has been in bits. We're headed to southern Spain in two weeks then the Swiss Alps and south of France in Sept - it'll be a nice little interlude before I take it to bits again .
Nice, enjoy. A little more local but my wife and I are taking my parents for a tour of Scotland in the 612 in September. .thecook101 said:
mwstewart said:
Ha - bugger all so far as it has been in bits. We're headed to southern Spain in two weeks then the Swiss Alps and south of France in Sept - it'll be a nice little interlude before I take it to bits again .
Nice, enjoy. A little more local but my wife and I are taking my parents for a tour of Scotland in the 612 in September. .Buying as an investment can be self-defeating of course: a bit like watching the value of your house rising, but forgetting that when you come to sell it, so has the price of the one you want to buy next.
I wouldn't be surprised if some poor bugger invested 250 grand in a Testarossa back in 1989, only to watch it plummet in value and finally call it a day and sell it on for 40 grand. Likewise the next lucky owner will have seen that 40 grand purchase now heading back up to 1989 levels. Should he too cash out now or hang on a bit longer, or just keep the car until he's bored of it?
The good thing is that most on here gain more enjoyment from driving their car, than they get from checking their portfolio of financial investments. Of course this is something your Financial Adviser could never get his head round, so best not to tell him about the 150K you're about to spunk on a sports car...
I wouldn't be surprised if some poor bugger invested 250 grand in a Testarossa back in 1989, only to watch it plummet in value and finally call it a day and sell it on for 40 grand. Likewise the next lucky owner will have seen that 40 grand purchase now heading back up to 1989 levels. Should he too cash out now or hang on a bit longer, or just keep the car until he's bored of it?
The good thing is that most on here gain more enjoyment from driving their car, than they get from checking their portfolio of financial investments. Of course this is something your Financial Adviser could never get his head round, so best not to tell him about the 150K you're about to spunk on a sports car...
Seems the car guys in General Gassing don't mind talking value http://www.pistonheads.com/gassing/topic.asp?h=0&a... Don't flame me but is it just beneath supercar owners to consider making a profit from car ownership...? Yes, yes, I'm stirring I know but not one mention of "Buy it to drive it!" in that thread. Maybe we just see too much of it here.
Last month I spent £150k on a McLaren 12C spider, I wanted a supercar but like youI was very concerned about values, I bought with savings and didn't want them to disappear by purchasing the wrong car.
There were many cars that I liked but I chose the 12C with both my head and my heart. I would have liked a 430spider, a 599 or a Diablo but I thought there was more chance of those losing money due to the massive increases.
It's all a gamble, hope you don't lose too much and any increase will be a bonus.
There were many cars that I liked but I chose the 12C with both my head and my heart. I would have liked a 430spider, a 599 or a Diablo but I thought there was more chance of those losing money due to the massive increases.
It's all a gamble, hope you don't lose too much and any increase will be a bonus.
Waste of time trying to guess market trends.
Bought my UK supplied 550 Maranello with FHP in 1999 when she was 12 months old, one owner, 5K miles. Cost me 125K GBP. Three years later it was worth 25K GBP trade. Didn't sell. Today market quoted (replacement) 165+K GBP.
Bought my UK supplied 599 GTO new Jan 2011. Cost me 330K GBP. By Dec 2011 it had lost 10%. Today market quoted (replacement) 725+K GBP.
Three years from now? Anyone's guess.
As advised, forget the market, it's b
ks. No point buying a money-pit but otherwise just enjoy.
Bought my UK supplied 550 Maranello with FHP in 1999 when she was 12 months old, one owner, 5K miles. Cost me 125K GBP. Three years later it was worth 25K GBP trade. Didn't sell. Today market quoted (replacement) 165+K GBP.
Bought my UK supplied 599 GTO new Jan 2011. Cost me 330K GBP. By Dec 2011 it had lost 10%. Today market quoted (replacement) 725+K GBP.
Three years from now? Anyone's guess.
As advised, forget the market, it's b
ks. No point buying a money-pit but otherwise just enjoy. Camlet said:
Bought my UK supplied 550 Maranello with FHP in 1999 when she was 12 months old, one owner, 5K miles. Cost me 125K GBP. Three years later it was worth 25K GBP trade. Didn't sell. Today market quoted (replacement) 165+K GBP.
125k in 99 is about 200k now. And then there are running costs. If you want to talk about investments in a like-for-like manner, you have to add inflation and running & repair costs. That's what's missing in most of these conversations & back of envelope calculations about investment value.thecook101 said:
Seems the car guys in General Gassing don't mind talking value http://www.pistonheads.com/gassing/topic.asp?h=0&a... Don't flame me but is it just beneath supercar owners to consider making a profit from car ownership...? Yes, yes, I'm stirring I know but not one mention of "Buy it to drive it!" in that thread. Maybe we just see too much of it here.
Nothing wrong with making a profit on a car, but if that becomes the main reason then it's a cold and emotion-less purchase. Like buying a painting you don't like just because it'll make money, desperately sad and just a little 'council'. By their nature, supercars don't make sense on any practical level so you should buy them because its an irrational and impulsive thing to do, that way you can justify making a huge loss on one with a smile.Behemoth said:
Camlet said:
Bought my UK supplied 550 Maranello with FHP in 1999 when she was 12 months old, one owner, 5K miles. Cost me 125K GBP. Three years later it was worth 25K GBP trade. Didn't sell. Today market quoted (replacement) 165+K GBP.
125k in 99 is about 200k now. And then there are running costs. If you want to talk about investments in a like-for-like manner, you have to add inflation and running & repair costs. That's what's missing in most of these conversations & back of envelope calculations about investment value.ks. 
I don’t see why you can’t (at least try to) have your cake and eat it: make a good investment AND own a car you enjoy driving. All investments can go down as well as up, whether they be houses, equities, gilts, wine, art, gold, or whatever. The same applies to cars. But you can enjoy driving them, too. So why not buy a car that looks as though it may at least hold its value AND that you want to drive? You may get it wrong on one or other or both counts - that’s life – but if you do your homework, and Lady Luck shines on you, then you may make a profit AND get to drive a car you want, too.
That’s the way I see my Ferrari 550: it’s a car I wanted for the sheer pleasure of driving it, but in 2012 I also calculated that I could buy it at, or close to, the bottom of its depreciation curve. So, if I drive it lots, then I get max enjoyment; but if I don’t have the opportunity to drive it as much as I might like, then it earns me money – it’s a win / win situation (until values fall, of course, which well they might, but so far they haven’t and I am now so far ahead on my original outlay, that I am unlikely to lose out in the long run). Whether I’ll do so well with my Dino is another matter . . . but if I do lose money on it, which I think is highly likely in the short term, it will have been worth every penny!
That’s the way I see my Ferrari 550: it’s a car I wanted for the sheer pleasure of driving it, but in 2012 I also calculated that I could buy it at, or close to, the bottom of its depreciation curve. So, if I drive it lots, then I get max enjoyment; but if I don’t have the opportunity to drive it as much as I might like, then it earns me money – it’s a win / win situation (until values fall, of course, which well they might, but so far they haven’t and I am now so far ahead on my original outlay, that I am unlikely to lose out in the long run). Whether I’ll do so well with my Dino is another matter . . . but if I do lose money on it, which I think is highly likely in the short term, it will have been worth every penny!
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