Buying wisely and cars as investments
Discussion
thecook101 said:
.... 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....
this would drive my absolutely nuts - if I own something I want to be able to use it every day. This is one of the reasons I am not sure if buying a non-road legal car would give me enough pleasure ...Edited by thecook101 on Monday 8th August 13:25
Years ago I remember simmilar threads where everyone cried shame: if people were buying our cars as investments it would, inevertably mean values would go up as other people would join in, meaning hor hobby becomming more and more expensive until there is no chnace of taking part, simply wathcing from the sidelines. a car is only worth what someone is willing to pay for it, remember and if two investors are willing to pay more for it, the value of thar car goes up. Eventually it will bring the value of all those cars up.
The last few years, with interest rates held low everyone has now realised that a classic can be an investment. So not only do we hear "what new car: colour, trim etc etc for best resale please" but also people talking up their own cars, talking up others, and investing.
So the days of the £12k 308 GT4 ferrari, £16k Aston DBS V8, £12k air cooled 911 etc etc are gone, probably forever.
I now feel I am in a minority, but I'll still say it: shame.
The last few years, with interest rates held low everyone has now realised that a classic can be an investment. So not only do we hear "what new car: colour, trim etc etc for best resale please" but also people talking up their own cars, talking up others, and investing.
So the days of the £12k 308 GT4 ferrari, £16k Aston DBS V8, £12k air cooled 911 etc etc are gone, probably forever.
I now feel I am in a minority, but I'll still say it: shame.
williamp said:
So the days of the £12k 308 GT4 ferrari, £16k Aston DBS V8, £12k air cooled 911 etc etc are gone, probably forever.
I now feel I am in a minority, but I'll still say it: shame.
While I understand your viewpoint and sympathise with it, there is another side to this particular coin: £12k Ferraris, £16k Astons and £12k 911s would eventually disappear, because it is not worth spending the money needed to keep them in good repair, let alone to restore them - cheaper to throw one away and buy another. Rising values keep old cars alive. The fact is that Ferraris, Astons and Porsches were expensive cars to make and are expensive cars to own if you are going to look after them properly: you can't expect to have them on the cheap.I now feel I am in a minority, but I'll still say it: shame.
MDL111 said:
thecook101 said:
.... 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....
this would drive my absolutely nuts - if I own something I want to be able to use it every day. This is one of the reasons I am not sure if buying a non-road legal car would give me enough pleasure ...Edited by thecook101 on Monday 8th August 13:25
Also, when people do their homework and buy a car to be driven and enjoyed like the Ferrari 550 above, and that keeps it's value then IMHO that's also a great way to enjoy the experience. Another example, I sold my last TVR Tuscan after 9 years and 52k miles for only a couple of thousand less than I'd paid in 2006, not an 'investment' but very economic fun. Hopefully the Aston Vantage will be similar and the old Maserati even better, but money is not the reason I chose them.
The thing that saddens me is seeing beautiful cars stored in lines, under dust-sheets in basement car parks which never see the light of day and are only owned for investment purposes. Hoses and rubber perishing, leather going brittle, brakes seizing, corrosion inside the bores etc but increasing in value 'because its a 25 year old car with only 3,500 miles....' cold heartless madness.
No reason why you can't do both - I've bought cars as investments and use them all the time including euro trips and track days. I realise the mileage impacts the value, but they seem to be doing fine despite the use.
Luckily, the cars I'm interested in are established enthusiast cars, so their values are perhaps more dependable than the more eclectic choices. and I'm buying 'old' cars so they have had 10 years to find their place in the market to some degree - bit more of a gamble with new cars.
I focus on buying well - it creates a bit of a buffer and I like the whole process of researching and finding a car which is good value (ie great condition or well below market value).
Luckily, the cars I'm interested in are established enthusiast cars, so their values are perhaps more dependable than the more eclectic choices. and I'm buying 'old' cars so they have had 10 years to find their place in the market to some degree - bit more of a gamble with new cars.
I focus on buying well - it creates a bit of a buffer and I like the whole process of researching and finding a car which is good value (ie great condition or well below market value).
thecook101 said:
....
Ferrari F430 - Something in between.
Ferrari 612 OTO - Tidy profit.
Porsche 997 manual - Motoring nirvana
I asked myself the same question back in November last year. With a budget around £90-100k, I was looking for a reasonably special car to have some weekend fun without incurring depreciation/huge maintenance costs etc (i.e. looking at the mix between financial/life-experience "ROI"). Ferrari F430 - Something in between.
Ferrari 612 OTO - Tidy profit.
Porsche 997 manual - Motoring nirvana
Edited by thecook101 on Monday 8th August 13:25
I did tons of research around "modern" Ferraris (360/F430/458) and Astons (Vantage V12/DBS).
my conclusions:
Ferraris: a box to tick, eventually, BUT
-Mileage sensitive
-Would not feel too comfortable leaving them parked on street (even in South-Ken)
-Maintenance can be costly if the unexpected happens on F430/360s
-Dealer's cut apparently higher on F430 and 360s, so if you want an exit in the short-term you are likely to pay more on a relative-basis
-not that rare cars, so you need to go to a Scuderia or a 3pedals F430 for (a bit) more rarity..but the budget needs to double
Astons: there are some sweet spots in the range in terms of rarity to look at IMHO, reasonably rare cars with a timeless design, iconic engine note and more understated (V12 manual and DBS manual) and back in November they were likely at the bottom of the depreciation curve...problem was I could not find one for sale as more demand than supply
At the end, I was lucky enough to be early on for obtaining a Vantage GT8 allocation and, even if it meant I had to double my initial budget, I am sure this car will give me an excellent balance between a pure driving experience/very special sense of occasion (even if idle in a living room)/financial ROI.
Ultimately, I think if you approach one of these brands (Aston, Ferraris, Porsche, Mclaren), look at the specific car rarity. To me this is the dominant factor that will protect your financial commitment in the long term, in case of a shift in demand to other assets or an economic downturn etc...not that we will have a bubble explosion anytime soon given (my 2 cent):
- a likely continuing super low interest-rate environment
- availability of financing for prime individuals
- certain type of cars seen as an alternative-asset by a widening audience/geographies
- relatively more favourable "tax status" for cars
- cars being "movable" assets > this can protect them from, say, a shift of disposable income from one geography to another (e.g. can be a potential long-term risk of Brexit)
Edited by FFM on Tuesday 9th August 11:09
Edited by FFM on Tuesday 9th August 11:11
FFM said:
Ultimately, I think if you approach one of these brands (Aston, Ferraris, Porsche, Mclaren), look at the specific car rarity. To me this is the dominant factor that will protect your financial commitment in the long term, in case of a shift in demand to other assets or an economic downturn etc...not that we will have a bubble explosion anytime soon given (my 2 cent):
- a likely continuing super low interest-rate environment
- availability of financing for prime individuals
- certain type of cars seen as an alternative-asset by a widening audience/geographies
- relatively more favourable "tax status" for cars
- cars being "movable" assets > this can protect them from, say, a shift of disposable income from one geography to another (e.g. can be a potential long-term risk of Brexit)
Interesting points. With the fair number of supposedly 'rare' cars that have been sat unsold at dealers for more than a year now and definite economic uncertainty in the news every day after Brexit it will be very interesting to see which way things go.- a likely continuing super low interest-rate environment
- availability of financing for prime individuals
- certain type of cars seen as an alternative-asset by a widening audience/geographies
- relatively more favourable "tax status" for cars
- cars being "movable" assets > this can protect them from, say, a shift of disposable income from one geography to another (e.g. can be a potential long-term risk of Brexit)
Edited by FFM on Tuesday 9th August 11:09
Edited by FFM on Tuesday 9th August 11:11
MDL111 said:
this would drive my absolutely nuts - if I own something I want to be able to use it every day. This is one of the reasons I am not sure if buying a non-road legal car would give me enough pleasure ...
if a 288 gto sat in your garage has made you £800,000 profit then you could always sell it, buy a fleet of supercars and a holiday home - a small price to pay for not being able to drive the vehicle!cgt2 said:
Interesting points. With the fair number of supposedly 'rare' cars that have been sat unsold at dealers for more than a year now and definite economic uncertainty in the news every day after Brexit it will be very interesting to see which way things go.
Agreed. Rarity is an interesting concept we should actually discuss further...and I bet some manufacturers are using tricks and non-very transparent ways to mask the true production numbers of supposedly limited-edition cars (or "rare", but not so much). Net results can be "rare" cars sitting idle in dealer stock once demand slightly decreases..To be honest I am not a fan of manufacturers using terminologies as "1 of xxx" for two main reasons:
A) I don't think it reads as special as "x of xxx"
B) Raises the question/s someone doesn't want to answer directly (i.e. how buyers are sure there are no more than "xxx" around?)
In this specific instance, throughout my research, I like a lot AM's approach in disclosing openly production numbers (if you ask the factory directly, for instance), in individually numbering their limited-edition "special projects" and in maintaining very low production number for their specials.
Obviously, this is based on my experience, but it would be curious to understand other point of views on this topic
FFM said:
I asked myself the same question back in November last year. With a budget around £90-100k, I was looking for a reasonably special car to have some weekend fun without incurring depreciation/huge maintenance costs etc (i.e. looking at the mix between financial/life-experience "ROI").
I did tons of research around "modern" Ferraris (360/F430/458) and Astons (Vantage V12/DBS).
my conclusions:
Ferraris: a box to tick, eventually, BUT
-Mileage sensitive
-Would not feel too comfortable leaving them parked on street (even in South-Ken)
-Maintenance can be costly if the unexpected happens on F430/360s
-Dealer's cut apparently higher on F430 and 360s, so if you want an exit in the short-term you are likely to pay more on a relative-basis
-not that rare cars, so you need to go to a Scuderia or a 3pedals F430 for (a bit) more rarity..but the budget needs to double
Astons: there are some sweet spots in the range in terms of rarity to look at IMHO, reasonably rare cars with a timeless design, iconic engine note and more understated (V12 manual and DBS manual) and back in November they were likely at the bottom of the depreciation curve...problem was I could not find one for sale as more demand than supply
At the end, I was lucky enough to be early on for obtaining a Vantage GT8 allocation and, even if it meant I had to double my initial budget, I am sure this car will give me an excellent balance between a pure driving experience/very special sense of occasion (even if idle in a living room)/financial ROI.
Ultimately, I think if you approach one of these brands (Aston, Ferraris, Porsche, Mclaren), look at the specific car rarity. To me this is the dominant factor that will protect your financial commitment in the long term, in case of a shift in demand to other assets or an economic downturn etc...not that we will have a bubble explosion anytime soon given (my 2 cent):
- a likely continuing super low interest-rate environment
- availability of financing for prime individuals
- certain type of cars seen as an alternative-asset by a widening audience/geographies
- relatively more favourable "tax status" for cars
- cars being "movable" assets > this can protect them from, say, a shift of disposable income from one geography to another (e.g. can be a potential long-term risk of Brexit)
Reading that makes me sad, especially the last section I did tons of research around "modern" Ferraris (360/F430/458) and Astons (Vantage V12/DBS).
my conclusions:
Ferraris: a box to tick, eventually, BUT
-Mileage sensitive
-Would not feel too comfortable leaving them parked on street (even in South-Ken)
-Maintenance can be costly if the unexpected happens on F430/360s
-Dealer's cut apparently higher on F430 and 360s, so if you want an exit in the short-term you are likely to pay more on a relative-basis
-not that rare cars, so you need to go to a Scuderia or a 3pedals F430 for (a bit) more rarity..but the budget needs to double
Astons: there are some sweet spots in the range in terms of rarity to look at IMHO, reasonably rare cars with a timeless design, iconic engine note and more understated (V12 manual and DBS manual) and back in November they were likely at the bottom of the depreciation curve...problem was I could not find one for sale as more demand than supply
At the end, I was lucky enough to be early on for obtaining a Vantage GT8 allocation and, even if it meant I had to double my initial budget, I am sure this car will give me an excellent balance between a pure driving experience/very special sense of occasion (even if idle in a living room)/financial ROI.
Ultimately, I think if you approach one of these brands (Aston, Ferraris, Porsche, Mclaren), look at the specific car rarity. To me this is the dominant factor that will protect your financial commitment in the long term, in case of a shift in demand to other assets or an economic downturn etc...not that we will have a bubble explosion anytime soon given (my 2 cent):
- a likely continuing super low interest-rate environment
- availability of financing for prime individuals
- certain type of cars seen as an alternative-asset by a widening audience/geographies
- relatively more favourable "tax status" for cars
- cars being "movable" assets > this can protect them from, say, a shift of disposable income from one geography to another (e.g. can be a potential long-term risk of Brexit)
. 'Tax status' 'movable assets' 'protect your financial commitment' 'finance for prime individuals' sums up all that is naff about supercar ownership and the whole 'showy status symbol' image. No mention at all about buying a car because you absolutely love it. My car is an investment
99% of the return is in the form of pleasure, enjoyment and pride
Because of it - I am a happier husband, friend and employee (all things that would otherwise cost me a fortune) perhaps reduce stress and let me live longer.
Not losing shed loads of money is important to me but not at the cost of not having something i really enjoy, if I had a car shooting up in value and would be constantly wondering when to cash in (like a share portfolio).
Cars are now in the same category as holidays for me - took me a while to realise great holidays are an investment not a cost
Hence why I am currently besides the pool in Ibiza (a £10k+ investment for family and I)
First and foremost buy the car you love and then hope it doesn't lose money..... For £150k my choices would be a 12c spider (under budget) or a 458 !!....you might be able to nick a Huracan ......gallardo SL
99% of the return is in the form of pleasure, enjoyment and pride
Because of it - I am a happier husband, friend and employee (all things that would otherwise cost me a fortune) perhaps reduce stress and let me live longer.
Not losing shed loads of money is important to me but not at the cost of not having something i really enjoy, if I had a car shooting up in value and would be constantly wondering when to cash in (like a share portfolio).
Cars are now in the same category as holidays for me - took me a while to realise great holidays are an investment not a cost
Hence why I am currently besides the pool in Ibiza (a £10k+ investment for family and I)
First and foremost buy the car you love and then hope it doesn't lose money..... For £150k my choices would be a 12c spider (under budget) or a 458 !!....you might be able to nick a Huracan ......gallardo SL
i think you can absolutely balance both. i'm now on my second 430 manual. on both occasions i wanted a manual because it seemed nuts to me that manuals were a shade cheaper than paddles when there were so few of them made.....and the fact that it was the last manual off the production line at the factory...to me that seemed a lock on at least not losing too much money over the mid/long term.
it's all down to the most basic law of economics....supply and demand.
short supply....check
high demand.....check
i knew i'd be alright and apart from 3 months between the 2 cars i've been behind the wheel of a ferrari for the last 6 years......what's that worth??!!
it's all down to the most basic law of economics....supply and demand.
short supply....check
high demand.....check
i knew i'd be alright and apart from 3 months between the 2 cars i've been behind the wheel of a ferrari for the last 6 years......what's that worth??!!
Edited by tuscaneer on Tuesday 9th August 13:26
The Surveyor said:
Reading that makes me sad, especially the last section . 'Tax status' 'movable assets' 'protect your financial commitment' 'finance for prime individuals' sums up all that is naff about supercar ownership and the whole 'showy status symbol' image. No mention at all about buying a car because you absolutely love it.
I would agree, but your comment is beside the original point of this post ("Buying wisely and cars as investments"). 'Tax status' 'movable assets' 'protect your financial commitment' 'finance for prime individuals' sums up all that is naff about supercar ownership and the whole 'showy status symbol' image. No mention at all about buying a car because you absolutely love it. Trust me, I adore 4-wheel motorsports and cars more than my post would have suggested, raced in Karts since I could afford to etc... but let's get real here, not everyone is a billionaire and if you don't want to lose months/years of net salary in a special car just because you love it, you need to (or can) try to use your head..as I bet you probably do yourself too before paying a big chunk of cash to buy something..if you don't, then again, we are taking about (trying to) buy wisely here.
And, by the way, I am an analytical person and I am actually enjoying to do research and due-diligence on something I love..furthermore, if I would have not shared a strong passion for cars, and particularly for Aston Martin, I would have never got an allocation on the GT8 at 30 years old and being, I assume, just an "average client" for my dealer perspective given there are some more established AM clients out there who are actually in the waiting-list..
Edited by FFM on Tuesday 9th August 13:39
Wilmslowboy said:
Cars are now in the same category as holidays for me - took me a while to realise great holidays are an investment not a cost
I think you just raised a very important point...age and experience are key factors to consider. I tend to agree that monetary value diminishes as life advances/perspective changes. Also you would expect, with age, your disposable income etc to be higher so you would likely to care relatively less about assessing the financial value/the depreciation/general costs related to a car/supercar ownership etc and more about the do-not-regret/life-experience aspect of itFFM said:
The Surveyor said:
Reading that makes me sad, especially the last section . 'Tax status' 'movable assets' 'protect your financial commitment' 'finance for prime individuals' sums up all that is naff about supercar ownership and the whole 'showy status symbol' image. No mention at all about buying a car because you absolutely love it.
I would agree, but your comment is beside the original point of this post ("Buying wisely and cars as investments"). 'Tax status' 'movable assets' 'protect your financial commitment' 'finance for prime individuals' sums up all that is naff about supercar ownership and the whole 'showy status symbol' image. No mention at all about buying a car because you absolutely love it. Trust me, I adore 4-wheel motorsports and cars more than my post would have suggested, raced in Karts since I could afford to etc... but let's get real here, not everyone is a billionaire and if you don't want to lose months/years of net salary in a special car just because you love it, you need to (or can) try to use your head..as I bet you probably do yourself too before paying a big chunk of cash to buy something..if you don't, then again, we are taking about (trying to) buy wisely here.
And, by the way, I am an analytical person and I am actually enjoying to do research and due-diligence on something I love..furthermore, if I would have not shared a strong passion for cars, and particularly for Aston Martin, I would have never got an allocation on the GT8 at 30 years old and being, I assume, just an "average client" for my dealer perspective given there are some more established AM clients out there who are actually in the waiting-list..
Edited by FFM on Tuesday 9th August 13:39
oh and enjoy the GT8
Some great input, thanks all. I'm not sure there is a consensus opinion but it would appear that we at least converge on a few areas. I consider myself first and foremost a car guy, and so am commenting from that perspective. I'm also no expert - so this is simply my opinion. However I do go driving on weekends, regularly take the long route to the office, have a full workshop with ramp, and most importantly - participate on car forums 
.
Seems the advice for those buying their first or only car in this category is to buy something you love and will be able to drive without concerns for diminishing value. Of course be smart, spend only what you can afford, but certainly don't expect to get a return. Happy days if you do, as long as that has not been at the expense of enjoyment. In fact, expect it to cost a fortune and make sure you have worked that into your sums. This does not mean that you can't be fortunate and benefit from some appreciation, but if it's new it's going to depreciate first, and if it's old then the mileage you add (because you bought it to drive, right?) will diminish any subsequent appreciation. This is of course unless you have managed to get on a manufacturers short list for a special edition although I would argue that many buyers of these cars, but not all, do so for the investment rather than the driving pleasure - which is rather sad. (Car manufacturers take note!)
As for investing in cars, I think the jury is out. I have taken a position that if you buy wisely, as you would with any high risk investment, then it is possible to match the returns realised in more traditional sectors. Add to this the tax efficiency and enjoyment of ownership and it certainly can be rewarding. It is high risk though, so this needs to be treated as you would any other high risk investment - i.e. it's money that if lost won't break you. Some firm provisos though: we're talking multiple car scenarios here, you don't want this to be the only special car you have available to drive, and we're also going to be using the car putting on 1 or 2k annually and not having it rot under a dust sheet. Lets face it, once you have more than one weekend car (plus family) it becomes difficult to put more than that on each year - not impossible of course - but unlikely. Furthermore, even if investing, buy something you love, investment grade cars deserve love and attention, and if they don't appreciate then you still have the car. After all you only lose (or gain) when you actually sell it.
There is also a middle ground, car lovers who wish to own a supercar but cannot afford to lose the money. This is possibly the riskiest category for all the obvious reasons. You need to buy near the bottom of the market but avoid high repair bills. You must also limit your mileage so as to protect resale value, and even if you do you may still be forced to sell in adverse market conditions. It's not that it can't be done successfully with proper research and diligence, but it carries the highest risk.
Bottom line would appear to be that supercar ownership is costly and should be entered into for the enjoyment and not the investment. These cars are built to be driven and should be used as such. The nature of the market means that opportunities to make a profit will always exist but they are difficult to predict and generally realised by those with a wide spread of cars. That's not to say that it cannot be done but make sure you love the car enough so that if the market tanks you are just as happy to hold on to it. I've taken a punt but I'll certainly be more than happy to have my Scaglietti for ever if that's the way it unfolds.
. Seems the advice for those buying their first or only car in this category is to buy something you love and will be able to drive without concerns for diminishing value. Of course be smart, spend only what you can afford, but certainly don't expect to get a return. Happy days if you do, as long as that has not been at the expense of enjoyment. In fact, expect it to cost a fortune and make sure you have worked that into your sums. This does not mean that you can't be fortunate and benefit from some appreciation, but if it's new it's going to depreciate first, and if it's old then the mileage you add (because you bought it to drive, right?) will diminish any subsequent appreciation. This is of course unless you have managed to get on a manufacturers short list for a special edition although I would argue that many buyers of these cars, but not all, do so for the investment rather than the driving pleasure - which is rather sad. (Car manufacturers take note!)
As for investing in cars, I think the jury is out. I have taken a position that if you buy wisely, as you would with any high risk investment, then it is possible to match the returns realised in more traditional sectors. Add to this the tax efficiency and enjoyment of ownership and it certainly can be rewarding. It is high risk though, so this needs to be treated as you would any other high risk investment - i.e. it's money that if lost won't break you. Some firm provisos though: we're talking multiple car scenarios here, you don't want this to be the only special car you have available to drive, and we're also going to be using the car putting on 1 or 2k annually and not having it rot under a dust sheet. Lets face it, once you have more than one weekend car (plus family) it becomes difficult to put more than that on each year - not impossible of course - but unlikely. Furthermore, even if investing, buy something you love, investment grade cars deserve love and attention, and if they don't appreciate then you still have the car. After all you only lose (or gain) when you actually sell it.
There is also a middle ground, car lovers who wish to own a supercar but cannot afford to lose the money. This is possibly the riskiest category for all the obvious reasons. You need to buy near the bottom of the market but avoid high repair bills. You must also limit your mileage so as to protect resale value, and even if you do you may still be forced to sell in adverse market conditions. It's not that it can't be done successfully with proper research and diligence, but it carries the highest risk.
Bottom line would appear to be that supercar ownership is costly and should be entered into for the enjoyment and not the investment. These cars are built to be driven and should be used as such. The nature of the market means that opportunities to make a profit will always exist but they are difficult to predict and generally realised by those with a wide spread of cars. That's not to say that it cannot be done but make sure you love the car enough so that if the market tanks you are just as happy to hold on to it. I've taken a punt but I'll certainly be more than happy to have my Scaglietti for ever if that's the way it unfolds.
thecook101 said:
Some great input, thanks all. I'm not sure there is a consensus opinion but it would appear that we at least converge on a few areas. I consider myself first and foremost a car guy, and so am commenting from that perspective. I'm also no expert - so this is simply my opinion. However I do go driving on weekends, regularly take the long route to the office, have a full workshop with ramp, and most importantly - participate on car forums .
Seems the advice for those buying their first or only car in this category is to buy something you love and will be able to drive without concerns for diminishing value. Of course be smart, spend only what you can afford, but certainly don't expect to get a return. Happy days if you do, as long as that has not been at the expense of enjoyment. In fact, expect it to cost a fortune and make sure you have worked that into your sums. This does not mean that you can't be fortunate and benefit from some appreciation, but if it's new it's going to depreciate first, and if it's old then the mileage you add (because you bought it to drive, right?) will diminish any subsequent appreciation. This is of course unless you have managed to get on a manufacturers short list for a special edition although I would argue that many buyers of these cars, but not all, do so for the investment rather than the driving pleasure - which is rather sad. (Car manufacturers take note!)
As for investing in cars, I think the jury is out. I have taken a position that if you buy wisely, as you would with any high risk investment, then it is possible to match the returns realised in more traditional sectors. Add to this the tax efficiency and enjoyment of ownership and it certainly can be rewarding. It is high risk though, so this needs to be treated as you would any other high risk investment - i.e. it's money that if lost won't break you. Some firm provisos though: we're talking multiple car scenarios here, you don't want this to be the only special car you have available to drive, and we're also going to be using the car putting on 1 or 2k annually and not having it rot under a dust sheet. Lets face it, once you have more than one weekend car (plus family) it becomes difficult to put more than that on each year - not impossible of course - but unlikely. Furthermore, even if investing, buy something you love, investment grade cars deserve love and attention, and if they don't appreciate then you still have the car. After all you only lose (or gain) when you actually sell it.
There is also a middle ground, car lovers who wish to own a supercar but cannot afford to lose the money. This is possibly the riskiest category for all the obvious reasons. You need to buy near the bottom of the market but avoid high repair bills. You must also limit your mileage so as to protect resale value, and even if you do you may still be forced to sell in adverse market conditions. It's not that it can't be done successfully with proper research and diligence, but it carries the highest risk.
Bottom line would appear to be that supercar ownership is costly and should be entered into for the enjoyment and not the investment. These cars are built to be driven and should be used as such. The nature of the market means that opportunities to make a profit will always exist but they are difficult to predict and generally realised by those with a wide spread of cars. That's not to say that it cannot be done but make sure you love the car enough so that if the market tanks you are just as happy to hold on to it. I've taken a punt but I'll certainly be more than happy to have my Scaglietti for ever if that's the way it unfolds.
and also, if you need to stretch your budget for something more special, I'd avoid leverage. Availability of financing is a supporting thing for values, I think, but would not use it myself to buy a car. As you mentioned, the risk is high if you think of buying a car PURELY for investment. When I hear stories about purely-investment-oriented people with 300k cash looking for 1 car but ending up buying 2 cars worth 600k in total (to "diversify") that, to me, the is high risky stuff. . Seems the advice for those buying their first or only car in this category is to buy something you love and will be able to drive without concerns for diminishing value. Of course be smart, spend only what you can afford, but certainly don't expect to get a return. Happy days if you do, as long as that has not been at the expense of enjoyment. In fact, expect it to cost a fortune and make sure you have worked that into your sums. This does not mean that you can't be fortunate and benefit from some appreciation, but if it's new it's going to depreciate first, and if it's old then the mileage you add (because you bought it to drive, right?) will diminish any subsequent appreciation. This is of course unless you have managed to get on a manufacturers short list for a special edition although I would argue that many buyers of these cars, but not all, do so for the investment rather than the driving pleasure - which is rather sad. (Car manufacturers take note!)
As for investing in cars, I think the jury is out. I have taken a position that if you buy wisely, as you would with any high risk investment, then it is possible to match the returns realised in more traditional sectors. Add to this the tax efficiency and enjoyment of ownership and it certainly can be rewarding. It is high risk though, so this needs to be treated as you would any other high risk investment - i.e. it's money that if lost won't break you. Some firm provisos though: we're talking multiple car scenarios here, you don't want this to be the only special car you have available to drive, and we're also going to be using the car putting on 1 or 2k annually and not having it rot under a dust sheet. Lets face it, once you have more than one weekend car (plus family) it becomes difficult to put more than that on each year - not impossible of course - but unlikely. Furthermore, even if investing, buy something you love, investment grade cars deserve love and attention, and if they don't appreciate then you still have the car. After all you only lose (or gain) when you actually sell it.
There is also a middle ground, car lovers who wish to own a supercar but cannot afford to lose the money. This is possibly the riskiest category for all the obvious reasons. You need to buy near the bottom of the market but avoid high repair bills. You must also limit your mileage so as to protect resale value, and even if you do you may still be forced to sell in adverse market conditions. It's not that it can't be done successfully with proper research and diligence, but it carries the highest risk.
Bottom line would appear to be that supercar ownership is costly and should be entered into for the enjoyment and not the investment. These cars are built to be driven and should be used as such. The nature of the market means that opportunities to make a profit will always exist but they are difficult to predict and generally realised by those with a wide spread of cars. That's not to say that it cannot be done but make sure you love the car enough so that if the market tanks you are just as happy to hold on to it. I've taken a punt but I'll certainly be more than happy to have my Scaglietti for ever if that's the way it unfolds.
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