What are everyone’s thoughts on investing in non traditional assets like classic cars, watches and wine?
I’m particularly interested in the modern supercar side of things.
The data on certain supercars is genuinely compelling. I’ve been looking at relatively new Porsches that have appreciated nearly 40% in a few years and a Ferrari (458 Speciale for those that are interested) is up 29% in the last 12 months.
It seems that most people buying and making money in this space are collectors and enthusiasts relying on intuition and relationships with dealers.
Does anyone here have any experience in this market? Would also be willing to hear thoughts on the watches and wine element too as I’m sure there must be some correlation.
Classic Cars, Supercars, Watches & Wine
byu/Fragrant-Key5115 ininvesting
Posted by Fragrant-Key5115
7 Comments
Cars are almost impossible. Most of the ones that appreciate that quickly are limited models and you have to be invited to buy them, which means you need to sometimes buy multiple other models to even get a chance. Of the few models that appreciate that fast, thousands of models don’t.
IMHO there is too much risk of physical loss, too little liquidity, and too high transaction fees that all add up too little reward. If you like the “thing” then buy it for yourself.
With wine you need to know what you do. We had a bottle of a 1963 red which was stored wrong or poorly…absolute piss.
Same goes for watches, whisky, cars. If you don’t know what you’re doing, don’t do it.
People making money on new super cars have very close relationships with dealers to get those cars. Showing up with a bag of money won’t work, you have to buy a lot of cars before they will give you an allocation for the good stuff. If you got one of these cars, then you want to build the spec to be as close to a desirable one off as possible. What’s desirable??? The person that wants to pay 26% more then what you did gets to decide that. Then you have storage and insurance until you flip it. It can be profitable, but I would look at it more as a hobbie then an actual way to grow or sustain your portfolio.
I think classic cars make a great investment especially if you’re just looking for a weekend ride, needs a ton of research and knowledge though so not ideal
The supercar market is being pumped hard by dealers right now. Disregard pricing if you are looking on sites like Bring a Trailer or the like.
They go on there with their shill bidders and create eye watering pricing for cars they have horded, pumping pricing to insane levels and paying a very small fee to do it. I was going to buy a 458 a month ago and almost all the resellers said, ” LOOK AT WHAT THEY SELL FOR ON BAT”.
With cars particularly you’d have to diversify (as with any investing really) and they take up a lot of space, which not everyone has, and have maintenance and insurance costs.
So if it’s your hobby and you appreciate them for what they are, great and they might go up in value. But it pure speculation. Also it can be very trim sensitive so yea you can go buy a Porsche 911 but the one the collectors want has a different gearbox or the fancy seats or the factory spoiler. So your 911 with crap seats and the wrong gearbox might be 80k but the good seats and the right gearbox might be double.
Also traditionally cars have not been a good assets that have risen in value. I think if you have 250k to spend on something exotic and rare you might be on to a winner but if you had that money even a basic savings account would be a nice bit of income and 0 risk (well apart from inflation but that’s always a risk).