Buying wisely and cars as investments
Discussion
For me I drive cars for enjoyment, not for showing off and certainly not for investment.
Infact I try as hard as I can to never invest in something that people can actually see, it is bad enough the public having easy access to one of my companies financials via the companies house (hence forth I no longer use UK ltd companies) because private wealth is not very private if everyone can see what you own and how much money you have, is it?
Now McLaren for example make an amazing car that wipes the floor with virtually 99.5% of the other cars you will come across during a spirited early morning drive. They only make 500 or 1000 of them worldwide.
Why would you want to waste that sitting in a garage?
Further more if it takes 12 months to make £100k off the back of one that costs £300k new (guesstimate there) then that is only 33% annual ROI, minus selling and storage and insurance and tax fees.
There are far better investment vehicles out there than 33% in a whole year. In my industry a ROI of 1-1000% is not uncommon after 1-3 months of optimisation.
Then there is risk. What if the car is worth less after a year? What if they come out with an lt700 and suddenly the car is no longer special and sells, second hand, for less (like a 650s). Then I have bought an epic car, paid to own it, not enjoyed it for what is is built for and then lost money on it.
No, thanks. The worst part is of those 500 lt spyders about 80% of them will be sold on for profit. So if I wanted one and could afford one I can't buy one in the spec I would want!
EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Infact I try as hard as I can to never invest in something that people can actually see, it is bad enough the public having easy access to one of my companies financials via the companies house (hence forth I no longer use UK ltd companies) because private wealth is not very private if everyone can see what you own and how much money you have, is it?
Now McLaren for example make an amazing car that wipes the floor with virtually 99.5% of the other cars you will come across during a spirited early morning drive. They only make 500 or 1000 of them worldwide.
Why would you want to waste that sitting in a garage?
Further more if it takes 12 months to make £100k off the back of one that costs £300k new (guesstimate there) then that is only 33% annual ROI, minus selling and storage and insurance and tax fees.
There are far better investment vehicles out there than 33% in a whole year. In my industry a ROI of 1-1000% is not uncommon after 1-3 months of optimisation.
Then there is risk. What if the car is worth less after a year? What if they come out with an lt700 and suddenly the car is no longer special and sells, second hand, for less (like a 650s). Then I have bought an epic car, paid to own it, not enjoyed it for what is is built for and then lost money on it.
No, thanks. The worst part is of those 500 lt spyders about 80% of them will be sold on for profit. So if I wanted one and could afford one I can't buy one in the spec I would want!
EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Edited by twoblacklines on Wednesday 17th August 18:55
twoblacklines said:
The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediately sell it on.
I don't see him becoming Chancellor of the Exchequer any time soon.twoblacklines said:
Snip
EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Build slots or immediate sale, especially without driving, would be possible to argue that it was bought as an investment so could be taxed.EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Edited by twoblacklines on Wednesday 17th August 18:55
How would they reliably tax gains on cars bought and kept for say 5 years without allowing losses though? I should be in profit now on my 355 but not that long ago I was looking at a "loss" if sold. I don't believe that HMRC/ HM Treasury are capable of creating regs that the Big 4 won't side step.
Edited for typo
Edited by James P on Wednesday 17th August 22:26
James P said:
twoblacklines said:
Snip
EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Build slots or immediate sale, especially without driving, would be possible to argue that it was bought as an investment so could be taxed.EDIT: The only advantage I see is that you don't get taxed on it. This needs to change to be honest. Clarkson nailed it but I can't find his article. He suggested at minimum the standard CGT tax rate on selling cars especially build slots or when you buy brand new and immediatly sell it on.
Edited by twoblacklines on Wednesday 17th August 18:55
How would they reliably tax gains on cars bought and kept for say 5 years without allowing losses though? I should be in profit now on my 355 but not that long ago I was looking at a "loss" if sold. I don't believe that HMRC/ HM Treasury are capable of creating regs that the Big 4 won't side step.
Edited for typo
Edited by James P on Wednesday 17th August 22:26
What next? Tax on profit on paintings, watches, stamps etc? Nah, daft suggestion.
As for showing wealth on Companies House, most companies file Abbreviated Accounts.
Would also be interested to hear about investments, other than your own business, that return more than 33%?
jshell said:
Are they not subject to CGT if they bust the £6k allowance?
Private cars are CGT exempt - https://www.gov.uk/capital-gains-tax-personal-poss...thecook101 said:
jshell said:
Are they not subject to CGT if they bust the £6k allowance?
Private cars are CGT exempt - https://www.gov.uk/capital-gains-tax-personal-poss...jshell said:
No I realise that, but was questioning the other listed items in the post. Art, jewelry etc.
Ah - yes, sorry. Actually I am more interested in this..twoblacklines said:
There are far better investment vehicles out there than 33% in a whole year. In my industry a ROI of 1-1000% is not uncommon after 1-3 months of optimisation.
Would love to hear what industry that is..? 
And on the subject of cars as investments - and here I am referring to cars bought in addition to those that you bought to drive - not sure if people follow this but Knight Frank published some interesting data recently http://content.knightfrank.com/research/540/docume...
cgt2 said:
bentley01 said:
Sorry I don't agree. I have had no problems at all with the Astons I have owned over the last five years.
I have never owned one so I was referring to my experience of trying to drive one. Another friend has had a few electrical issues but he owns a 2006 Vantage. I would imagine build quality has improved in recent years, the paint and finish on the one I saw was excellent.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
jshell said:
thecook101 said:
jshell said:
Are they not subject to CGT if they bust the £6k allowance?
Private cars are CGT exempt - https://www.gov.uk/capital-gains-tax-personal-poss...I own loads of art (because i like it, not for investment) but I haven't bothered to keep a record of what I paid for it or from whom and if I was to sell it in a private sale, where is the record of the sale going to appear?
zedmtrappe said:
thecook101 said:
Would love to hear what industry that is..?
Yes, do tell!
But I do struggle to think where anybody in any market can make 1000%.
Red Bull possibly do it. 0.1p per metal used per can. Fill it with 0.1p of mass produced sugar liquid. Have it on the market for 1000x.
Maybe he owns Red Bull ?
_Leg_ said:
jshell said:
thecook101 said:
jshell said:
Are they not subject to CGT if they bust the £6k allowance?
Private cars are CGT exempt - https://www.gov.uk/capital-gains-tax-personal-poss...I own loads of art (because i like it, not for investment) but I haven't bothered to keep a record of what I paid for it or from whom and if I was to sell it in a private sale, where is the record of the sale going to appear?
I'm in that position right now, trying to sell a large collection to an institute. If I word the tax return correctly then each individual item has a £6k limit, if I word it wrongly then the collection has a £6k limit!! My collection numbers in the hundreds.
Atomic12C said:
Haha... if he's found a niche market where profit is huge, he's unlikely to give it away
But I do struggle to think where anybody in any market can make 1000%.
Red Bull possibly do it. 0.1p per metal used per can. Fill it with 0.1p of mass produced sugar liquid. Have it on the market for 1000x.
Maybe he owns Red Bull ?
Red bull not the greatest gross margin, (1.19 - Vat .99 - retailers margin -50p = 50p Gross selling price) - 17% marketing 9p, 13% overheads 7p, 7% logistics 4p, variable trade spend 17% 9p, fixed trade spend 10% 5p = 16p then cogs (can 3p, liquid 8p case 1p, shrink wrap 1p) 3p per can profit and probably 10% ebitda at best with a few savings on the above !!!But I do struggle to think where anybody in any market can make 1000%.
Red Bull possibly do it. 0.1p per metal used per can. Fill it with 0.1p of mass produced sugar liquid. Have it on the market for 1000x.
Maybe he owns Red Bull ?
Phib
Edited by phib on Friday 19th August 12:17
phib said:
Red bull not the greatest gross margin, (1.19 - Vat .99 - retailers margin -50p = 50p Gross selling price) - 17% marketing 9p, 13% overheads 7p, 7% logistics 4p, variable trade spend 17% 9p, fixed trade spend 10% 5p = 16p then cogs (can 3p, liquid 8p case 1p, shrink wrap 1p) 3p per can profit and probably 10% ebitda at best with a few savings on the above !!!
Phib
Hope you didn't go an research all those figures, my post was 'tongue in cheek' ! Phib
Edited by phib on Friday 19th August 12:17
If not Red Bull, then I'll throw any "spring water" company in to the mix.
Or maybe its the "lets post vids on to youtube of cars in london revving engines" ilk? The returns there would seem to be of that percentage ball park.
Atomic12C said:
Hope you didn't go an research all those figures, my post was 'tongue in cheek' !
If not Red Bull, then I'll throw any "spring water" company in to the mix.
Or maybe its the "lets post vids on to youtube of cars in london revving engines" ilk? The returns there would seem to be of that percentage ball park.
Ha Ha, no I know them off the top of my head, I can also do you the ones for Volvic, Evian or similar mineral or spring water brands !!! If not Red Bull, then I'll throw any "spring water" company in to the mix.
Or maybe its the "lets post vids on to youtube of cars in london revving engines" ilk? The returns there would seem to be of that percentage ball park.
Trust me there is no money in drinks / FMCG unless you are very very very lucky !!!
Phib
phib said:
Ha Ha, no I know them off the top of my head, I can also do you the ones for Volvic, Evian or similar mineral or spring water brands !!!
Trust me there is no money in drinks / FMCG unless you are very very very lucky !!!
Phib
Harry Leventis's car collection would suggest he has been very very very very lucky!Trust me there is no money in drinks / FMCG unless you are very very very lucky !!!
Phib
_Leg_ said:
Looked it up. There is a £6000 limit but how on Earth can the HMRC police that?
I own loads of art (because i like it, not for investment) but I haven't bothered to keep a record of what I paid for it or from whom and if I was to sell it in a private sale, where is the record of the sale going to appear?
Well if you sold a Rolex for example it would be easy to gauge the average sale price of x Rolex at x time. They would probably charge you tax on that figure, it would be up to you to prove that figure is incorrect.I own loads of art (because i like it, not for investment) but I haven't bothered to keep a record of what I paid for it or from whom and if I was to sell it in a private sale, where is the record of the sale going to appear?
Remember these days if HMRC think you owe them, they can just take it straight out your bank, guilty until proven innocent!
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