Investments and Replica cars - do they belong in the same sentence?

[Randy V]

In my small world, I consider an investment something for which I get a return equal to or greater than the amount of money / effort initially expended..

Pleasure is one form of investment return that I am sure we can all get our arms around.

Money is the other.

With the various threads going around about what various cars sold for either at auction, or outright - I thought it was the right time to gain an understanding of various perceptions here.

Now there are some very fine replicas out there. Some more fine or held to a closer spec to the originals than others. Some - maybe not so fine...

There are also completely NEW cars to be added into the fray here as well. Cars that were custom engineered from the ground up.

And finally those cars which are donor based..

What are your thoughts on investment and cars fitting the above descriptions?

[Howard Jones]

Here's what I think and have said so many times. Assuming you buy a Kit. This applies to all of them on this site. You build the car yourself and do 95% of the work. Maybe you have something welded or other small things done and have it painted but otherwise do it yourself and take 2-3 years to do it.

Then you get the car on the road, legally, proper registration, etc.

You have spent about, kit price X 1.50 - 2.0. Your 50K kit has cost you lets say 80K.

Then you drive it for 5 years, have lots of fun, meet a whole group of new friends and generally have a great time at your new hobby for nearly a decade.

Now you want to sell it 8-10 years after you bought it. You price it at the cost of the build + 5-10% at 85000, and sell it at lets say 78K. You just enjoyed a 8 year hobby , had a great time and it cost you less than a cheap vacation to Maui.....alone.


If you have 80K to "invest" get a mutual fund or two. If you what a really cool hobby, and drive something that's beats you and Britney Spears naked on a oiled up plastic sheet, then build one of these cars...............and drive the hell out of it!

[Larry L.]

Originally Posted by Big-Foot

Investments and Replica cars - do they belong in the same sentence?

No. Not according to the std definition of "investment" anyway.

Originally Posted by Big-Foot

In my small world, I consider an investment something for which I get a return equal to or greater than the amount of money / effort initially expended..

Then prepare to be disappointed. The odds aren't great that you'll so much as 'break even' on the money side when you sell a replica, let alone see any profit. Mr. Jones just laid out (very well, I might add) where the actual "profit" comes from with these cars.


(An aside: Of all the cars I've had over the years, there's only been one car on which I realized a monetary "profit" [of sorts] when I sold it. That was my Ford GT. I say "of sorts" because I didn't get all my taxes back. On one other car I actually 'broke even' in the true sense of the word. That was on my '62 Biscayne (LS6, 5-gear). 'Got every dime back on that car. But coming out like that on a "kit car" IMO is going to be a very tough row to hoe just because of the nature of the beast. Are there/have there been exceptions? I suppose so. But, 99.99999999999% of the time the opposite will be the case. 'Just my $.02. )

[Randy V]

Originally Posted by Larry L.

Then prepare to be disappointed. The odds aren't great that you'll so much as 'break even' on the money side when you sell a replica, let alone see any profit. Mr. Jones just laid out (very well, I might add) where the actual "profit" comes from with these cars.

So then, you don't consider "Pleasure" as a form of investment profit? I certainly do..
BTW, most of the pleasure I get from my various builds has been the build/journey itself...



I have made money on some cars, but I don't necessarily judge the sale amount as either winning or losing on most cars and motorcycles..

[PeteB]

I don't know about investment, but they don't depreciate like a regular production car. I think I could about break even on my Cobra after owning it for 10 years. Even something like a Corvette or Viper is going to lose a lot of value over the same amount of time.

Pete

[Larry L.]

Originally Posted by Big-Foot

So then, you don't consider "Pleasure" as a form of investment profit? I certainly do..

The way I interpreted the phrasing of your initial post, I thought you were referring to the $$$$$$$$ type of investment/profit. So, that's what I was addressing. If you're factoring "pleasure" into the "profit" equation, ANY CAR could fill that bill for this or that individual.

My own view of the car/"investment" thing is that - real world - 99% of the time cars are an expediture (in $$$)...not an "investment". "Investment" is a word used to win over the Mrs. when trying to justify the new wheels in the garage. At best (with darned few exceptions) they're ALL 'depreciating assets' from a $$$ standpoint. Some just lose a bit less $$$ value over time than others.


But, to directly address the question quoted above: No, I wouldn't use the word "profit" to describe the pleasure one gets from owning/driving a car. "Profit" is what it is. Instead, I'd use the words "dividend" or "benefit". They're more accurate terms! But, yeah, I'm all for that sort of thing!

[Cliff Beer]

Personally, I wouldn't consider replicas to be what they call "investment grade" in collector car speak. Heck, even some original "exotic" cars are not "investment grade" such as 80's ferraris. Replicas just won't ever have the cache that's necessary to earn a mainstream following sufficient to build the necessary demand. However, you can drive a replica, and I believe that will always keep nice ones in some minimal demand with niche groups (such as this.....).

I've always made money off of the various collector cars I've bought. But that's only because I'm an aggressive buyer, buy them in somewhat run down condition and, until the last 5 or so years, did all of the work myself. On a per-hour basis I'm probably making about 10 to 15 cents per hour for my labor, but let's just not think about that....

[GTRene]

Investment no, or not yet.

But say, you buy a new fun car next to your regular car and keep that car for say 5 or more years, then a good GT40 replica
stays way better in price then say a BMW M5 or Ferrari (mainstream model) etc.

so according to that, you can save yourself a lot money with that GT40 replica
and drive a car that have the "best" looks and goes very seriously too.

[Robert C]

I am with Mr Jones!!!!!

My car will be done for 100% self gratification and hopefully my wife will like riding in it. Money in this case is cost of that satisfaction and nothing more. You know the old saying, "you can't be buried with it"? Some things are worth beyond what the dollars say they are.

I know a guy with a 2 stroke powered blender with 14" inch ape hanger handle bars on it that makes it go. If you knew what it cost him to make, you would think he is an idiot, but everyone that sees it says it is the coolest thing ever! To some, that makes it priceless.

He who dies with the most toys wins!

Thanks for reading!
Robert

[Al Wohlstrom]

When I built my Kirkham, I was so excited to get it done and drive it, I missed the journey, the fun of the build. While I'm enjoying the SLC build this time, I'm still looking forward to the finish. As with the Kirkham, I expect to get my monetary investment back, any labor would be a plus but not expected. How long I keep it will depend on a future build. Right now I expect to enjoy it for a while.

[Larry L.]

Originally Posted by RChianese

He who dies with the most toys wins!

'Could be. But, he's just a dead none the less...

[TrevS]

I think some replica's can make money but I wouldn't call them investments. I think it all depends on the quality of the build, who built it and the parts used. Also I think at the moment there aren't that many GT40 replicas to choose from, just 4 on pistonheads.com a very big car website in the UK. You then look at Ferrari F355's and there are 60 for sale on the same website. So the GT40 replica is still a very rare sight so puts the seller in a strong position to demand a good price.

The landscape may change over the next 10 years or so though as unlike old Ferrari's there are more and more replica's being built each year so that 4 cars for sale today might become 15-20. That could well effect the price of your replica and also make your car more difficult to sell as we know it's a very niche market with not many buyers

I've actually come close to selling my GT40 a few times to try and fund a potential 'investment car'. I always wanted a Aston Martin Vanquish and a two years ago higher mileage cars started to drop as low as £35k in the UK. The cheapest Vanquish for sale today is £54k, that's nearly £20k in 2 years. No GT40 replica will make that kind of money.

After the GT40 is finished I plan I buying an investment car. Maybe not something as expensive as an Aston Martin but maybe a Renault Clio V6 255.