Appreciation

[Bucketlist]

Appreciation?
What did you pay for your car 5 years ago? What is it worth now?
If you keep it another 5 years, what will it be worth?

[kc911s]

The tax man will want to know this too when you sell. He wants his cut...

[matt930s]

It....depends...

MattR

Originally Posted by Hot Euro

Appreciation?
What did you pay for your car 5 years ago? What is it worth now?
If you keep it another 5 years, what will it be worth?

[1979-930]

I didn't own a Porch 5 years ago, I'm a looser...

I probably paid too much three years ago, dumped way too much into it,
and it will be worth less in 5 years because I made it perform better in every way.

[trader220]

The market already started moving 5 years ago. Its not going to move with the same velocity in the next five. These care are not good investments. If you owned one back in early 2012 or before, hay great its worth more now. Enjoy it. If you think its going to continue to rise at that rate, dont hold your breath.

Say you pay 50 grand for a 75k mile 1987 to 89 coupe right now which is about the market. In five years, how much will you have spent on gas, insurance, and maintenance? How much would you have made just buying an S&P500 etf?

Lets say you parked that $50k in that S&P etf. It returns about 8% a year (last 50 years average roughly) that's about $23,500 you made.

Lets say insurance is $750 a year or $3750
Call maintenance $1000 a year or $5000
Lets say you drive 3000 miles a year at 20 mpg and $3.50 a gallon, thats roughly $4300 more.

So your $50k car needs to appreciate to (50k plus 23.5k plus 3750 plus 5000 plus 4300) or call it $86,500 or somewhere north of 70% appreciation just to break even and thats with adding miles to it.


Buy the car because you have the cash, you dont mind passing on the potential income and you love the car. It will be a reasonable holder of value but its far from a good investment.

[75 911s]

^Nice try classic car investor!

Just kidding, but didn't a German bank recommend investing in classic cars recently?

[trader220]

Originally Posted by 75 911s

^Nice try classic car investor!

Just kidding, but didn't a German bank recommend investing in classic cars recently?

I would not advocate that either. I also think buying an old Porsche is not exactly what they meant. The scenario I painted above is the story most people here ask about. My guess is the "German Bank" was talking about collector grade vehicles that you're not going to drive. Even if that's the case, I still think that's nuts unless you're in the business.

Hey the guy who bought a pristine low miles RSA or an 89 Turbo or something along those lines 15 years ago, may have made some money in real terms. But...only if he didn't drive the car a whole lot, did the work himself and sold the top of the market.

[Matt Monson]

I appreciate all my old cars, even the turds. It’s been about a decade since I’ve put any money into my car hobby. I made enough buying and selling cars and parts during the first long nose run up (2007+) that I treat it all as equity now. I sold the 912 for a $10k profit and put it all into other cars, for example. They are playtoys and I keep peace in the home by not mixing it with our money. I use pay pal as a bank account.

[Unobtanium-inc]

My rule of thumb is any sought after Porsche that you hold for 5 years will probably be worth more. No, they are not straight investments, but you can't drive a mutual fund. Unlike a lot of hobby's that are complete money pits, the Porsche hobby does have an upside.
But it's important to remember my first line here, any sought after Porsche, so don't start filling your backyard with 924's and Boxsters just because they're cheap and then be pissed in five years when they still are.

---Adam

[Matt Monson]

Originally Posted by trader220

I would not advocate that either. I also think buying an old Porsche is not exactly what they meant. The scenario I painted above is the story most people here ask about. My guess is the "German Bank" was talking about collector grade vehicles that you're not going to drive. Even if that's the case, I still think that's nuts unless you're in the business.

Hey the guy who bought a pristine low miles RSA or an 89 Turbo or something along those lines 15 years ago, may have made some money in real terms. But...only if he didn't drive the car a whole lot, did the work himself and sold the top of the market.

It was an article Reuters published and you are right, it was about actual collector grade cars, stuff well into 6 figures or even 7 and 8 figures. It had zero real crossover to us plebes even though Petrolicous and 20 other blogs shared the article for a couple days.

[trader220]

I've owned somewhere north of 30 air cooled 911's over the past 30 years. I have no idea what my net is on the lot but I can assure you even with the nice appreciation I have had on a bunch in the last 5 years I am still in the red.

But... I bought a 36k mile RSA in 1999 and sold it in 2000 for the same price and I put 6k miles on the car. I bought a 94 Speedster in 95 and it was stolen in 97, USAA paid me what I had into the car including my tax. In 2002 I had an 89 RUF modded turbo in a stunning shade of Moss Green. Sold in 2003 for a slight loss for around $35k. I had 2 993 C4S's and 1 993 C2S all in the 2000's. Probably lost money on those. One I kept 2 years and 25k miles. An assortment on 964 coupes. 1987 to 89 Carrera's I probably owned around 15, a mix of coupes and targa's, never a cab. The real bummer is I sold off most of them long ago and then almost all of the balance in 2010/11 when I got divorced. I also bought a few in 2012. I bought a nice 87 Targa with 65k on it for $25. 18 months later a lady rolled a stop sign and t boned me. Cop saw the whole thing, her insurance company paid me $46k for it. That was a good one.

I agree they probably will sell for more in 5 years. That still does not make them a good or even decent investment. The real value is in buying one because you want one and can afford it. If it hold value or increases, thats a bonus.

[trader220]

Originally Posted by Matt Monson

It was an article Reuters published and you are right, it was about actual collector grade cars, stuff well into 6 figures or even 7 and 8 figures. It had zero real crossover to us plebes even though Petrolicous and 20 other blogs shared the article for a couple days.

About a month ago I was at the Simeone car museum with my son for some sort of show. I struck up a conversation with a 20 something year old who had brought a pristine 55 Speedster and a Testa Rossa....I had to ask what he did for a living, figuring daddy was someone big. He worked for a company that buys cars you can invest in. They sold 2000 shares in the cars they bought. If the cars go up in value your shares should appreciate accordingly. Having been a trader for 20 plus years I asked him a few questions....

Who is the buyer when I want to sell my shares ( who provides liquidity who makes markets) ?

If I buy 1001 shares do I own the car?

Who sets the value of the cars if no live market in the shares is around?

When you trailer up the cars and drag them down from NY for a show who pays for that, or does it go against the value of the car (and therefore the shares)?

I didn't like any of the answers. I thanked him for his time.

There are some ways to invest in those high dollar cars without owning 100% of the car. That's not one I would get involved with.

[Rick Brooklyn]

No affiliation or recommendation, obviously

https://rallyrd.com/

[trader220]

I believe thats its Rich, thanks.

Clicking on the link gets you to a landing page but you cant even see what cars they have or where the shares are priced. You have to download the app to do anything with them and then its only available through itunes.

I watched their video on the drop page, they claimed the 85 Testa Rossa went from $85k in 2016 to $160k in 2017. Sure it did. Well I guess it did when you set the price.

In all fairness its a fun idea. My take is that it needs a lot of work before anyone with serious money would deal on it and before it could ever be viable. Just my 2 cents.

[Matt Monson]

I saw an article a year or two back about a place in NYC that does the same thing, and you get access to drive the cars. It's like a country club track where you get so many user days per month based on your investment level. I don't have a clue what they were called but we talked about it in a thread here at the time.

[trader220]

Thats something totally different. If you're a member you can reserve the cars in the fleet. Its not an investment platform. They actually do very well and have a really nice selection of cars. They also just moved into a big new club house in the city.

[JMS935]

Originally Posted by trader220

About a month ago I was at the Simeone car museum with my son for some sort of show. I struck up a conversation with a 20 something year old who had brought a pristine 55 Speedster and a Testa Rossa....I had to ask what he did for a living, figuring daddy was someone big. He worked for a company that buys cars you can invest in. They sold 2000 shares in the cars they bought. If the cars go up in value your shares should appreciate accordingly. Having been a trader for 20 plus years I asked him a few questions....

Who is the buyer when I want to sell my shares ( who provides liquidity who makes markets) ?

If I buy 1001 shares do I own the car?

Who sets the value of the cars if no live market in the shares is around?

When you trailer up the cars and drag them down from NY for a show who pays for that, or does it go against the value of the car (and therefore the shares)?

I didn't like any of the answers. I thanked him for his time.

There are some ways to invest in those high dollar cars without owning 100% of the car. That's not one I would get involved with.

I’m an ex trader as well, and as soon as I saw these Rally Road types of ‘investments’, it sure seemed fishy to me. It appears to be a terrific way for whoever is managing the fund to live off of other people’s money and drive expensive cars under the ‘guise’ that it’s to get them out for exercise. Pooling your own money between a couple of buddies to fill a garage for yourselves is one thing, but this has scam written all over it. And assuming they have to keep marking their position to show gains to continue to perpetuate (the scheme) further investments, it’s a bubble waiting to be popped once a flood of investors want to cash out. There won’t be enough funds needed to do so, nor will they be able to raise the funds needed by liquidating the inventory, as anything like collectible cars takes either time or the right auction setting to get top dollar. Being in a time crunch to sell to meet investor demand is a sure fire way to sell below market. Anytime an offering makes claims that sound bogus, it’s probably because the entire offering itself is bogus. For instance, Rally Road claims...”During the offering you can see the car’s history (like who has owned it in the past) and the the value of similar cars sold over time, so investors can get a sense of historical pricing.” Really? I’ve never heard of having access to the name of every previous owner of every used car before. That’s not possible. Occasionally, some cars come with these records, but most don’t, and with those that don’t are they just pulling this information out of thin air?

Even if I’m wrong about all of this, and this is totally legit, what’s the point of it?!? The only reason any of us collect cars is for the pleasure of owning and driving them, this doesn’t even get you that. If you’re buying shares in anything for the primary purpose of making money on it, then buying shares in a company that generates income and profits is a much safer way to invest your money. Now if you really want to invest in a car collection, make sure you’re actually getting a car and its title, and not some fictitious share in a car collection you have no control over or enjoyment out of.

At least when we do take a loss on a car, there was some enjoyment gained out if its ownership and use, which has some value to it. Rally Road must sting pretty bad when you tell your buddy you lost 40k investing in a Ferrari, and they wonder why they never got a ride in it, and then you’ve got to tell them that you never actually owned it, even saw it in person, or got to use it at all! LMAO

[littleoldman]

https://classiccarclubmanhattan.com

[kc911s]

Hope those “investors” on rallyrd didn’t see that TR that just sold on BAT for $85,000. Must be a pretty nice TR to be “valued” at $160k.

[trader220]

Originally Posted by kc911s

Hope those “investors” on rallyrd didn’t see that TR that just sold on BAT for $85,000. Must be a pretty nice TR to be “valued” at $160k.

They can claim its worth whatever they like.