Discussion
As a purely financial discision, it sounds a little dubious to me - You'd probably be better served and secured by other investments, however, that can be balanced by the wish to enjoy the car in the mean time.
You may want to refer here, https://www.reddit.com/r/UKPersonalFinance/ ( https://www.reddit.com/r/ukpersonalfinance/wiki/lu... ) as there are a number of similar windfall posts, and some generally sound advice as to how to distribute it for the best returns in a given scenario.
You may want to refer here, https://www.reddit.com/r/UKPersonalFinance/ ( https://www.reddit.com/r/ukpersonalfinance/wiki/lu... ) as there are a number of similar windfall posts, and some generally sound advice as to how to distribute it for the best returns in a given scenario.
Edited by Haltamer on Wednesday 28th November 13:38
I'm sure I remember someone on here speaking about how they used a windfall to purchase a buy-to-let flat. The rental income was then used to fund the purchase of toys while the investment remained (relatively) secure in the property.
That's probably what I'd look to do. That or reducing interest payments on your own debts (if applicable and the sums work out better).
That's probably what I'd look to do. That or reducing interest payments on your own debts (if applicable and the sums work out better).
Copy and paste what I replied previously...
I bought a flat on a BTL mortgage, investing £31,000 cash and borrowing the rest on a 75% loan to value mortgage. Flat cost around £100,000
Roughly I get a 6.5% yield from it before costs, and after costs this reduces to around £340 per month.
I use that £340 to lease a car - well maybe a bit less... eg just awaiting a Volvo for £273 pm. I'll keep doing that.
In say 10 years time, what will I have and what will I have spent?
There's a risk of house depreciation but in the long term this is a low risk and average capital growth has been 3%pa which means the flat will be worth £134,000 - in theory at least.
So I'll have spent net nothing (approx) on cars for the 10 years and seen my initial capital of £33,000 double.
I bought a flat on a BTL mortgage, investing £31,000 cash and borrowing the rest on a 75% loan to value mortgage. Flat cost around £100,000
Roughly I get a 6.5% yield from it before costs, and after costs this reduces to around £340 per month.
I use that £340 to lease a car - well maybe a bit less... eg just awaiting a Volvo for £273 pm. I'll keep doing that.
In say 10 years time, what will I have and what will I have spent?
There's a risk of house depreciation but in the long term this is a low risk and average capital growth has been 3%pa which means the flat will be worth £134,000 - in theory at least.
So I'll have spent net nothing (approx) on cars for the 10 years and seen my initial capital of £33,000 double.
adamsmith96 said:
Hi all.
I have recently come into some inheritance money (approx £25k) and have been thinking about what to do with it. Not content with leaving it in a 1% interest savings account, I am exploring the potential of buying a car that will hopefully increase in value over the next 5 - 10 years.
Any input into what cars to look at would be appreciated, especially by those who have been in a similar situation to me and have decided to buy a car as an investment.
I am still planning to drive whatever I end up buying, but it will be dry stored over winter in order to keep it in the best nick possible.
I'm off to see a 2005 Elise 111S with 26,000 miles this weekend that is priced at £19k, any thoughts on this?
Cheers.
The Elise is low mileage and must be at either Jon Seals or Will's & top whack for a rover car apart from some very rare models.I have recently come into some inheritance money (approx £25k) and have been thinking about what to do with it. Not content with leaving it in a 1% interest savings account, I am exploring the potential of buying a car that will hopefully increase in value over the next 5 - 10 years.
Any input into what cars to look at would be appreciated, especially by those who have been in a similar situation to me and have decided to buy a car as an investment.
I am still planning to drive whatever I end up buying, but it will be dry stored over winter in order to keep it in the best nick possible.
I'm off to see a 2005 Elise 111S with 26,000 miles this weekend that is priced at £19k, any thoughts on this?
Cheers.
If you want to make a little money then dont buy from a dealer, that car private will have been 15k, and once you take out insurance and running costs doubt you will make anything.
From the lotus stable i would look at a S1 buy at low end and invest some money into it to make it a good example, or an S2 Exige, you budget will be a N/A car but still fantastic.
From all the cars ive have or had the ones that ive done best are ones where i hae bought a decent base car and then improved it either by respray or engine rebuilds that have actually added value to a car.
If i had the room and time i would be seeking out hot hatchs from the 90's early 2000 like Saxo VTS 106 GTI 306 Rallye etc.... and returning them back to standard and presenting them well they will be going up soon and can still be picked up cheap.
Property is usually the safest bet if you are careful with what you buy, but mind that second properties will be subject to higher Stamp Duty rates and also higher Capital Gains Tax rates. There are various other factors though: CGT allowance, private residence relief, lettings relief, deed of trust, move into the property before selling etc. Anything and everything to avoid having to hand over even more money to the Government to waste. Worth speaking to an Accountant who specialises in property if going down this route but almost every I know who own multiple properties also appear to have a rather nice lifestyle.
A new Elise starts at £31k so how much do you really expect a £20k S2 to appreciate by?
It's not an investment, it is at the very most a relatively safe way to enjoy your inheritance without losing it all provided you maintain the car to a good standard. In which case if you break even over a few years ownership (including cost of tax, MOT, insurance and 1 service per year) you'll be doing alright.
Either enjoy the money or invest it. You can't do both.
It's not an investment, it is at the very most a relatively safe way to enjoy your inheritance without losing it all provided you maintain the car to a good standard. In which case if you break even over a few years ownership (including cost of tax, MOT, insurance and 1 service per year) you'll be doing alright.
Either enjoy the money or invest it. You can't do both.
Buying a car with the mindset of getting an appreciating asset isn't the best of ideas. However if you want a car that would potentially lose the least amount then that's, in my opinion, a better mindset. Something pretty reliable and fairly rare is a good starting point as that will keep costs of ownership down.
I think there are two ways of looking at it:
1) I've come in to some inheritance money and I'd like to treat myself to a car that won't depreciate too much. In this case buy the Elise and you'll be a very happy bunny, great car and they hold their value well.
2) I've come in to some inheritance money and I would like to make some investments for the future. I think BTL is always a good shout (even with the many tax changes of late), or look at investing in a variety of different stock options with the help of a financial adviser.
I think buying a car with the view of it being an investment is in reality kidding yourself. You still need to tax it, insure it, MOT it, maintain it and fix it if it goes wrong. And in order to make money you really need it to appreciate quite considerably in value. I don't think that is too likely in the budget you have in mind.
Not a bad conundrum to have though! But I really would separate it and decide if you want an investment or a car. I have two BTL investments and am looking to buy maybe a classic mini or classic fiat 500 as a bit of fun. Not from a strict 'investment' perspective but it will be an enjoyable project and unlikely to lose too much money. In the meantime my actual investments are continuing to make me money.
Also bear in mind that in order to make any money out of the car you would have to sell it.
1) I've come in to some inheritance money and I'd like to treat myself to a car that won't depreciate too much. In this case buy the Elise and you'll be a very happy bunny, great car and they hold their value well.
2) I've come in to some inheritance money and I would like to make some investments for the future. I think BTL is always a good shout (even with the many tax changes of late), or look at investing in a variety of different stock options with the help of a financial adviser.
I think buying a car with the view of it being an investment is in reality kidding yourself. You still need to tax it, insure it, MOT it, maintain it and fix it if it goes wrong. And in order to make money you really need it to appreciate quite considerably in value. I don't think that is too likely in the budget you have in mind.
Not a bad conundrum to have though! But I really would separate it and decide if you want an investment or a car. I have two BTL investments and am looking to buy maybe a classic mini or classic fiat 500 as a bit of fun. Not from a strict 'investment' perspective but it will be an enjoyable project and unlikely to lose too much money. In the meantime my actual investments are continuing to make me money.
Also bear in mind that in order to make any money out of the car you would have to sell it.
Ilovejapcrap said:
mike74 said:
As long as you're confident that the biggest asset price bubble the world has ever seen is going to continue expanding for another 10 years then go for it.
Yeah can it really continue?I would say two things... firstly the BTL is for the long term, so a drop in prices in the short term will likely be outweighed by a long term (15+ years) view - but then that is the risk I was talking about, maybe it won't!
Secondly where I have bought (East Midlands & Yorkshire) the properties certainly haven't experienced the incredible bubble of the southern part of the country (and other areas). So I've paid approximately the same or even less than the price the property was in the early 2000s.
Depends on your motivation, if you want to have a fun car to enjoy and maybe get some free motoring out if it then go for it.
If it's pure profit your after then look elsewhere.
Let's say you buy one of my picks, a mint RX-7 or a Lotus Esprit for 25k.
Not let's assume you're running costs for tax, insurance, servicing and repairs work out fairly reasonably at £1200 a year and you put in into winter storage for £100 a month for half the year at £600.
In 5 years you'll have spent £9000 just on keeping the thing and will need to car to have appreciated by 36% just to break even.
From your username I'm guessing your 22, if so, stick it towards a house deposit. Insurance will be a nightmare and unless you're doing much better than I was at 22 then an expensive car will be a huge liability.
Of course, you could just say sod it and roll the dice. Get an R8 V8 for 35k on finance for a minimal monthly outlay, save up for insurance and have an incredible year. You won't lose a penny on the car when you come to sell if you keep the miles reasonable. Just pray nothing expensive goes wrong
If it's pure profit your after then look elsewhere.
Let's say you buy one of my picks, a mint RX-7 or a Lotus Esprit for 25k.
Not let's assume you're running costs for tax, insurance, servicing and repairs work out fairly reasonably at £1200 a year and you put in into winter storage for £100 a month for half the year at £600.
In 5 years you'll have spent £9000 just on keeping the thing and will need to car to have appreciated by 36% just to break even.
From your username I'm guessing your 22, if so, stick it towards a house deposit. Insurance will be a nightmare and unless you're doing much better than I was at 22 then an expensive car will be a huge liability.
Of course, you could just say sod it and roll the dice. Get an R8 V8 for 35k on finance for a minimal monthly outlay, save up for insurance and have an incredible year. You won't lose a penny on the car when you come to sell if you keep the miles reasonable. Just pray nothing expensive goes wrong
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