Actually over here you can get pretty good deals for classic cars now. It used to be 1-1.5% of estimated value, today you can get them as low as 0.5%. Still, today that adds up to a handsome yearly sum for a 330GT.
Interesting points and reading. Its easy to nod in agreement with much of what you say in your blog. Also nice photographs!
Nice article - thank you. Here's a quote from your article that I think sums it up for a lot of people. "Argue this however you want, I have met hundreds of enthusiastic collectors who are tired of the unstable equities markets and would rather have their hard earned cash in a tangible asset". Preservation of capital through a tangible asset is a good objective while waiting for appreciation.
Originally Posted by Four7EightBHP View Post "Argue this however you want, I have met hundreds of enthusiastic collectors who are tired of the unstable equities markets and would rather have their hard earned cash in a tangible asset". tangible illiquid assets................. uh oh
Hagerty: I have a "stated value" policy - If prices go down the insurance I pay on the value I put on the car is less. Hasn't happened lately though. Cheers Warren
To put it in perspective - the insurance on my 3 antique cars (330GT, 47 Ford Convertible, 47 Ford Sedan with 35K miles, costs me less for a year coverage than the 4 daily drivers (2005 Saab Wagon, 2001 Saab, 2006 Honda, 1996 Buick Roadmaster Wagon) costs for 6 months coverage. And none of these are in the high risk category. Cheers Warren
Yes, good point, so you have to want a car and be prepared to keep it for a while. Then its part of your diverse portfolio. Comparable to a holiday home perhaps ? The lack of instant liquidity balanced against the fact you have something nice to own and use.
Same insurer/ broker,,,but even with very low risk, and no claim in last 10 years, and as most of competitive events are excluded from coverage anyway,,when you have a significant collection,,,it is a lot of money..
maybe but history has shown the the human brain isnt really wired like that.... all i am thinking is that people are fine owning "XXXX" until it goes against them.... and then we see how stable XXX is and how comfortable they are holding XXXX
Some human brains are. I keep cars either very short or very long. Longest already with me for 17+ years and counting. It's nice to be in the green after everything considered but for 75% of the cars I own I don't care about variations in valuations.
http://www.ferrarichat.com/forum/ferrari-discussion-not-model-specific-sponsored-algar-ferrari/527164-todays-ferrari-market-part-driven-down-self-fullfilling-prophecy-doomsayers.html Have we reached the denial phase of the bubble?
I dont believe hes saying exactly that. Hes simply saying that differently from stocks which, in the worst case, could drop down to toilet paper value, a collectible car will never have a zero value (and actually the history of the last 30 years confirms that). And even then you could always go in your garage, stare at the car you love, seat in, start it and go for a ride. Then, as everything on this world, nothing has a constantly ascending or descending value. What drops today will reach even higher values in the next 5-7 years. History repeating. Last but not least, this is one of definition of financial (or whatever it is) bubble: "An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value." Everyone knows that the intrinsic value of a 250 GTO is way lower than the value of a Porsche Boxter. This is true for classic cars, for artworks etc. The market for these items is a bubble in itself.
I guess it depends how much tolerance you have for "paper losses"on physical assets that you enjoy. That in turn I guess depends on how much you enjoy them, when/if you need to liquidate them and what percentage of your total wealth they represent. The answer will be different for everybody.
Francesco, great post. Unfortunately it will fall on deaf ears. Bradwilliams is the very definition of cognative dissonance: Judge for yourself. Keep in mind I've offered BradWillaims fair warning twice and gave him an out, but he leaves me no choice as he continues to denigrate fellow Ferrari owners. 1) Mocks Ferrari owners by saying real enthusiast keep their cars long term, yet he flips his TR and 550 as quickly as he can. 2) Laments the high prices of Ferrari, doesn't buy them even if prices are below market (actually update, he did buy back a salvage TR, after telling others not to buy Ferrari, go figure) 3) Wishes Ferrari owners ruin. When called out on this says people are trolling 4) Holds the position that we are in a bubble ... for five long years (actually we've entered the 6th year now) 5) Says he can't wait for a crash in prices, but then the crash will ruin the hobby for enthusiasts like him 6) Says the run up in prices are mostly due to fraud, can't provide one iota of evidence. When called out on this, says people are trolling 7) Hates owners and buyers, calls them pigs for 'talking' up prices, but says the value of his 550 going to 140K when he wants to flip one. 8) Asks me to moves the conversation to PM, asks a moderator to block me on PM. 9) Complains that the run up value makes cars unfair for enthusiasts, when asked what those cars are, keeps it secret. 10) Says real enthusiasts don't worry about the value of their cars, all he talks about is the value of these cars all day. Bradwilliams, ...don't forget these words of wisdom you yourself said five years ago, what happened since then that you've become one of the 'losers'?" (your word from 5 years ago, not mine)
after the comment people tired of market instability... i was just pointing out that everyone claims to be a XXXXX investor type but in reality they are not when markets move so if people are leaving equities for the stability of cars....
Well said, Talking about bubbles, valuations, and market conditions are a good thing. I myself said I think we're at a 'high point.' But Bradwilliams has made it abundantly clear to me as well as others here, that his commentary comes from a position of schadenfreude. Something that I, and many others do not appreciate.
Plenty of interesting items remain unsold since Barons Auction on July 12th 2016. These include two Bentley Continental R Fastbacks. Of the 7 Ferraris offered, 5 remain unsold. Out of 34 lots offered in total, just 6 cars were sold. That’s the facts – interpret as you see fit. Here’s a link to the results Barons Auctioneers
The standard Continental Rs have really come down in the past few years. They were pricey for quite awhile. I remember my friends dad selling his 95 back in the mid 2000s for a decent chunk of change. Great looking cars. http://www.ebay.com/itm/1994-Bentley-Other-Turbo-R-/231988186422?vxp=mtr&nma=true&si=hfZyI4q6cGt%252F%252FzwvkxuDH1vXBiU%253D&orig_cvip=true&rt=nc&_trksid=p2047675.l2557
Some say "never let the truth get in the way of a good story" this leads to fun tales, but not so much use when considering new acquisitions!
I've been collecting Porsches since early 2000s. I changed my collection from Longhoods and 993s to modern Ferraris (CSs and Scuds) in early 2015. There is no consensus on whether we are in a bubble or whether we are headed to a correction or a collapse. However, I do know that an increase of 30% in the value of my F cars over the past 1.5 years seems just too artificial. I also see many of the cars (CSs for example) are just changing hands between the dealers and asking prices are increased $20-30k with each move. The price escalation in the collector car market is mostly driven by the dealers and with each move, they are testing the high watermarks. At least that's what I see over the past couple of years. May be some folks are still buying cars but I think most folks are like me and just waiting for the "correction".
I was referring to the original Continental R models that can trade for as much as £1M, as per auction link
They are pretty bad cars to drive and maintain, even by comparison to Italian cars!!so when they get old, they age and depreciate massively. I had a Continental T, the best of the breed, and I have to admit my Toyota Landcruiser with the 4.7 liter engine drives better, specially on mountain roads, and does not need new brake rotors ever 10.000km. And performance wise my Audi Allroad with the 3 l biturbo engine and 313bhp because of the power to weight ratio drives much better ( not talking of building quality). Reality is those Bentleys were all for status symbol and very nice to look at, the paint, the leather, and even the sheep skin rugs ( each of them costing 1500usd for the pleasure to dig your toes in the wool,,,) but as a working car, quite a disaster. The drivers seat that moves back and forth when you move the back part to allow a passenger to get in the rear seat,,stayed blocked in the advanced position, I had to drive the car with the steering wheel on my chest to the dealer for fixing it! So their depreciation has nothing to do with the current status of the market. Unless you believe that in bull market even crap sell at a hefty price..the good things they only manufactured 380 C "T"s so it will take time before all those that can afford the experience do it,,,and admit it!
