Cars as an investment?
Discussion
I know lots has been said about this before but just looking on some up to date thoughts on buying a car as an investment. I'm not expecting much of a return just looking not to loose money.
I'm thinking of buying a 2wd Sierra Sapphire RS Cosworth and holding on to it for 2-3 year, I'll only be putting up about 1000 miles a year on it so running costs wont really come into it. I'll be storing it in a shed thats not costing me anything. Whats the thoughts on this?
I'm thinking of buying a 2wd Sierra Sapphire RS Cosworth and holding on to it for 2-3 year, I'll only be putting up about 1000 miles a year on it so running costs wont really come into it. I'll be storing it in a shed thats not costing me anything. Whats the thoughts on this?
I'm personally not a fan of hoarding cars like this. They are meant to be driven; things seize up when they're not. If you're doing something as an investment, then surely you want to make money? In which case, look at classic motorbikes or something. If you want to avoid losing money on cars, then buy barges or ex-rep hatches for about a grand to 1500 quid. Things like Mk1 MR2s are pretty residual proof - bought one a few years ago for £1500. Stilll worth the same amount 2 years later, even though it gained 20k miles. Still worth the same amount now, 10 years later.
Chops9 said:
I know lots has been said about this before but just looking on some up to date thoughts on buying a car as an investment. I'm not expecting much of a return just looking not to loose money.
I'm thinking of buying a 2wd Sierra Sapphire RS Cosworth and holding on to it for 2-3 year, I'll only be putting up about 1000 miles a year on it so running costs wont really come into it. I'll be storing it in a shed thats not costing me anything. Whats the thoughts on this?
It's a tough one really. It's been done to death about every possible car that might go up in the future. I'm thinking of buying a 2wd Sierra Sapphire RS Cosworth and holding on to it for 2-3 year, I'll only be putting up about 1000 miles a year on it so running costs wont really come into it. I'll be storing it in a shed thats not costing me anything. Whats the thoughts on this?
I think a Sapphire Cosworth is a very tough one because there are so many duds around and the ones that aren't already command a big premium. You've got to look at the history file first because they're going to be anything up to 100k so, when you sell it, the potential buyer will want to see reems of paper with bills adding up to £10-£15k or its just another old fast car and a gamble.
I don't think you'll make anything back in 3 years of ownership, maybe have depreciation free motoring but you'll still have to maintain it.
I think it's a fine idea to buy a car on the basis it might be a medium term investment, but dangerous to buy for that reason alone.
So my advice would be to make sure you enjoy whatever you buy - whether that's through driving it, or simply through owning it doesn't matter IMHO.
I had a similar dilemma with the 147 GTA - I don't use it very much any more but it can sit in the garage costing very little, I enjoy owning and using it every now and then and I'm pretty sure it'll hold it's value and **may** go up over the next few years if I'm lucky. Seems like a no brainer...
So my advice would be to make sure you enjoy whatever you buy - whether that's through driving it, or simply through owning it doesn't matter IMHO.
I had a similar dilemma with the 147 GTA - I don't use it very much any more but it can sit in the garage costing very little, I enjoy owning and using it every now and then and I'm pretty sure it'll hold it's value and **may** go up over the next few years if I'm lucky. Seems like a no brainer...
Its defo hard to judge what cars will go up in value, just thinking fast fords are a safe bet. Just looking at the RS500's over the last 5 years. I guess the major problem is picking up one thats in good nick as a lot of boy racers have owned and wreaked them in the past. What other cars around the £6-8k mark would be worth looking at. Thinking about it, investment is the wrong word, just looking at holding on to something nice and knowing its not going to drop in value.
I just trawl Ebay everyday looking at specialist stuff that might not be suitable to sell at that time.
Your budget, if stretched a bit, could get you a nice 147GTA or maybe a phase 2 Clio V6 but I think they're very long term investments because they've not finished dropping - granted they've not dropped much over the last few years.
Your budget, if stretched a bit, could get you a nice 147GTA or maybe a phase 2 Clio V6 but I think they're very long term investments because they've not finished dropping - granted they've not dropped much over the last few years.
Chops9 said:
I'll only be putting up about 1000 miles a year on it so running costs wont really come into it. I'll be storing it in a shed thats not costing me anything. Whats the thoughts on this?
I think you'd need to reckon on giving it an annual service at least. On a car like that, once holes start appearing in service history, the prospects of making any money on it will rapidly vanish. And unless your shed is air-sealed / dehumidified or whatever, you'll probably need to keep on top of corrosion etc.
But in principle it's not a bad idea if you buy the right car. It'll need to be a good'un to start with though!
Gigario Lotus Turbo Esprits are currently rising in value. Go for a series 3 as it has the galvanised chassis. But be aware that the engines are prone to going pop (plastic washer somewhere near the clutch IIRC).
But whatever you go for, drive it. If it sits in the shed it will seize up and bits will start falling off.
But whatever you go for, drive it. If it sits in the shed it will seize up and bits will start falling off.
You need to look higher in the market, I knew someone who was on his local Ferrari dealer's list - he'd buy new months before they were released. Then own the car for less than 12 months and sell on (usually when the dealer called saying can we buy it back for an extra 10%).
The other option is of course proven investment vehicles, but the prices are higher than Sierra Cosworth! Think Testarossa and above.
The problem with £5-10k cars is keeping them running and insured eats into the profit massively - lets say you manage to get one for £6k with really cheap insurance you manage to only pay £300 for your 3 years, then mot/service/fixes each year (lets say you do all the work yourself) and you're another £450 down if you're very, very lucky. A minor self restore is likely to eat up £1k on an already good car so you're hoping to sell it at £7,750 just to break even (that's 30% just to break even). The maths just don't stack up unless you're spectacularly lucky.
My advice is at this level is keep it a hobby and be happy with limited depreciation and drive the cars. I have a smart roadster and a classic fiat 500, both are going up slowly in value but running costs mean I'll never make money from them. I will, however, enjoy them and not lose anything like the same amount of money most people do when they buy and run a car.
The other option is of course proven investment vehicles, but the prices are higher than Sierra Cosworth! Think Testarossa and above.
The problem with £5-10k cars is keeping them running and insured eats into the profit massively - lets say you manage to get one for £6k with really cheap insurance you manage to only pay £300 for your 3 years, then mot/service/fixes each year (lets say you do all the work yourself) and you're another £450 down if you're very, very lucky. A minor self restore is likely to eat up £1k on an already good car so you're hoping to sell it at £7,750 just to break even (that's 30% just to break even). The maths just don't stack up unless you're spectacularly lucky.
My advice is at this level is keep it a hobby and be happy with limited depreciation and drive the cars. I have a smart roadster and a classic fiat 500, both are going up slowly in value but running costs mean I'll never make money from them. I will, however, enjoy them and not lose anything like the same amount of money most people do when they buy and run a car.
I'd have no problem giving it a service and drive it every now and again. Alot of the idea is knowing I've something special waiting for me! I dont like loosing money on cars so think the cossie is a good bet and if its got a few mods it'll keep me entertained when i do take it for a spin. A lot of research is needed. Any other suggestions of cars I could look at?
There is a good Top Gear magazine supplement this month on this subject. My view is at the sub £10k purchase mark the annual running costs will near enough wipe out the appreciation. Expensive stuff like classic Ferrari's are a different case if bought correctly.
My choices for the realistic buy, enjoy, don't lose money:
Sierra Cosworth
Mercedes 190 2.3/2.5 16v
Mercedes SL (R107)
Golf MKII GTi
205 GTi
My choices for the realistic buy, enjoy, don't lose money:
Sierra Cosworth
Mercedes 190 2.3/2.5 16v
Mercedes SL (R107)
Golf MKII GTi
205 GTi
I bought a S1 XJ6, kept it for a year and sold it for more then I paid for it (approx 25% again on top of the purchase price). I did some work on it though, so only made a 'profit' in the wheeler dealers sense, i.e. my hourly wage would have been very small indeed.
I also bought an X308 XJR, kept it for a year and sold it for what I paid for it. To be honest I reckon the quality of the car you buy is far more important then what it is. As long as it's 12 years old or so age doesn't matter and nice examples of cars are always in demand.
However, gun to the head if I had to buy a car that was going to go up I'd be looking at an E34 M5.
I also bought an X308 XJR, kept it for a year and sold it for what I paid for it. To be honest I reckon the quality of the car you buy is far more important then what it is. As long as it's 12 years old or so age doesn't matter and nice examples of cars are always in demand.
However, gun to the head if I had to buy a car that was going to go up I'd be looking at an E34 M5.
I think I put the wrong title on the topic! Investment is the wrong word.
The higher end of the market £30k+ is more for investments I guess, just thinking of a car that isnt going to loose money and the cost of keeping it tip top is minimum.
The 190 2.5 merc looks another option, a bit on the rare side but they havent been trashed as much I dont think. Was also thinking a Merc SEC, just love the look of them, a different machine to the other two but I'm wondering if they are worth a look.
The higher end of the market £30k+ is more for investments I guess, just thinking of a car that isnt going to loose money and the cost of keeping it tip top is minimum.
The 190 2.5 merc looks another option, a bit on the rare side but they havent been trashed as much I dont think. Was also thinking a Merc SEC, just love the look of them, a different machine to the other two but I'm wondering if they are worth a look.
Edited by Chops9 on Wednesday 20th June 13:01
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