AN ASTON MARTIN - Investment or Enjoyment ?
Discussion
In the Declining Sales topic, 'cardigankid' posted the following;
'Whatever anyone says and whatever the level of sales is, anyone who can afford an Aston and would enjoy it, should buy one. Learn from history. In 1971 they struggled to sell DB6 Mk.II's, (which were perceived as old hat). All the same things were being said as some misguidedly say today. But buying a car was not a mistake, despite all the financial problems and disasters which were just around the corner for the company. Anyone who bought a Mk.II Volante in 1971, in the face of conventional wisdom to the contrary, and kept it, has a car worth over a million quid today.
The market is different, and much bigger, but the fundamentals are the same. It is wise to own an Aston if you are in a position to do so.'
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I then drew attention to a fabulous one owner 1971 DB6, 90,000 miles (10,000 of which during the last 30 years). Cost in 1971 about £5,000 (that equates to £140,000 now in economic power). It was sold at auction last year for around £750,000.
In practice, I expect this DB6 must have been very much treasured and enjoyed. The owner might not even have seen it sold, and if benefactors were involved, then 40% tax disappears.
Taking a purely investment view, some of you may have a shareholding (directly or within a pension fund) in a company that is long established and now one of Britain's biggest.
If that DB6 purchase money had been put into the shares of that company in 1979, it would now have a value of £577,500. In addition, £244,054 dividends would have been received. Current annual dividend income is £24,436. No resprays, servicing, tyres, repairs, insurance, road tax etc.
Therefore I suggest just enjoy an Aston Martin.
Edited by Jon39 on Sunday 29th March 18:38
Too right. All this talk of classic car investments at the moment does make me chuckle as it never mentions cost of ownership (which is always huge on cars such as these even if the owner never uses it). A well chosen antique or work of art would be a better bet if you want something to look at and enjoy as they have no such additional costs. For example, I combine my love of things motoring by also collecting car mascots from the 1920s and 1930s. The Aston and my 1960s Jaguar are just money pits which I enjoy using but are definitely not part of any investment portfolio!
Jon39 said:
If that DB6 purchase money had been put into the shares of that company in 1979, it would now have a value of £577,500. In addition, £244,054 dividends would have been received. Current annual dividend income is £24,436. No resprays, servicing, tyres, repairs, insurance, road tax etc.
Therefore I suggest just enjoy an Aston Martin.
I'm no tax expert (caveat emptor) but wouldn't the value in the share increase not attract capital gains tax though, along with income tax on the dividend?Therefore I suggest just enjoy an Aston Martin.
Assuming top rate tax on both, your £577k capital + £244k dividend = £821k, would only actually net you (£577k *0.72) + (244k*0.55)=£550k
Whereas the £750k for the DB6 is all yours, save the resprays, servicing, tyres, repairs, insurance, road tax etc, and the auction fee of anything up to 10%.
In fact, there may not be too much in it, but personally I'd like to have enjoyed an Aston Martin for 35 years rather than some pieces of paper with my name and some numbers on
I suspect that it's a little more complicated than a choice between "investment" or "enjoyment." Many of those in the enjoyment camp are promoting a kind of 10/10ths ownership in which cars are regarded as tools and the hard miles are piled on.
I think you can have enjoyment and build value, too. In order to appreciate a balanced, aesthetically-beautiful car such as an AM, I think you have to care for it, not just "ride it hard and put it away wet." That contributes to it being an investment as well as a great ride.
I think you can have enjoyment and build value, too. In order to appreciate a balanced, aesthetically-beautiful car such as an AM, I think you have to care for it, not just "ride it hard and put it away wet." That contributes to it being an investment as well as a great ride.
AdamV8V said:
I'm no tax expert (caveat emptor) but wouldn't the value in the share increase not attract capital gains tax though, along with income tax on the dividend?
Assuming top rate tax on both, your £577k capital + £244k dividend = £821k, would only actually net you (£577k *0.72) + (244k*0.55)=£550k
Assuming top rate tax on both, your £577k capital + £244k dividend = £821k, would only actually net you (£577k *0.72) + (244k*0.55)=£550k
Yes Adam, Capital Gains Tax (CGT) would be applicable on any gains in excess of each persons annual allowance, whenever shares are sold. However since 1987, Personal Equity Plans (PEPs) which in 2008 became Stocks and Shares Individual Savings Accounts (ISAs), have been the place for shareholdings and they are then not subject to any CGT.
A proper investment should provide income (of course cars are not noted for that), and the dividend total I stated, is after the deduction of basic rate tax. If held in a PEP or ISA, there would not have been any additional tax for higher rate payers.
You are right about enjoying an Aston Martin. I raised the topic because I cannot really see a car as a serious investment. Even if we were lucky enough to own an appreciating vehicle, we do tend to become attached to our cars, but would need to sell to obtain any financial return. My guess is that many collectors cars are probably only sold, following an owners demise.
Oh, not just 'some pieces of paper'. The £244,000 dividends, could have paid for a few Astons to enjoy along the way, with the capital untouched and still at work in the business.
No CGT on any car sale as its a 'deprectiating' asset I believe?
I remain staggered that people are paying £170k for used £115k Porsche GT3's that aren't even a year old.
Could even have made 1000% 'profit' on my first car MK1 Escort it seems!! Ho hum!!! Clearly the Rapide will be worth a fortune in 20 yrs so all the polishing and dehumidification costs are worth it;-) Stands to reason!
I remain staggered that people are paying £170k for used £115k Porsche GT3's that aren't even a year old.
Could even have made 1000% 'profit' on my first car MK1 Escort it seems!! Ho hum!!! Clearly the Rapide will be worth a fortune in 20 yrs so all the polishing and dehumidification costs are worth it;-) Stands to reason!
steveatesh said:
A few years of ownership and replacing sidelights and various electronic modules will sharp put paid to any current model Aston being an investment . 
I spoke to a chap at Burleigh and he said something similar from beside his classic DB that had only one electronic component - a capacitor in the distributor! However the main engine ECU might be very pricy but sub modules are a lot less - £180 for a Beru TPMS module recently. It is unimaginable that older Astons would not be supported on this module/ecu replacement front.
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