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Building and managing a car collection at home

Hawksworth Classic cars

I mentioned in my previous piece that building a car collection of any kind at home can be rewarding for both pleasure but also more and more as an alternative to conventional investments. Having been a Chartered Wealth Manager for the last decade I have seen a dramatic change in the investment environment; between a cripplingly low interest rate environment and consistently high volatility in the equity markets, investors and savers find themselves caught very much between a rock and a hard place.

Alternative asset classes have risen and risen in popularity in recent years and in most cases outperformed the markets by a considerable margin and according to the Knight Frank Luxury Investment Index:

KFLII Perfomance

 

 

 

 

 

 

 

 

 

 

Source: Knight Frank Luxury Investment Index Q1 2016 research

As any advisor worth their salt will tell you, past performance does not guarantee future returns; I do believe however that if the right vehicles are bought and looked after in the proper manner, there are more good times to come.

Knight Frank do note in their research however that the top end of the market is cooling somewhat. Since the beginning of the year the HAGI Top Index (Historic Automobile Group International) which tracks the value of the World’s 50 most desirable motor cars, has risen just 1%. “The market has been treading water since the end of 2015” says HAGI Founder Dietrich Hatlapa.

It is not about corrections or bubble bursting through. Simply put, the world seems to have caught up with the concept that cars, similar to Art, have real prospect for growth. And why not… they are beautiful, often hand crafted, meticulously designed feet of ingenious engineering. Mr Hatlapa is obviously supportive of my view by continuing “this is more about a market that has gone quiet. Good cars are still selling very well, but buyers are in less of a hurry – the perception is that they now have time to track down what they want via an advisor rather than getting into a bidding war at an auction”

I have seen a growing amount of “Classic Car Funds” emerging over the last year. I personally believe that if someone would like to start thinking of making serious investment into the car market, car funds are not the way to go forward. Investing in cars should be more involved, the cars should be able to be seen, touched and yes…..occasionally even used.

There are of course huge amounts of things to think about if you would like to grow a portfolio at home or in a private storage facility:

  • Which cars should I be buying?
  • How am I going to store them?
  • How should they be insured?
  • What security have I got in place?
  • How should they be moved around the country/world?
  • When should I sell them?
  • How should I sell them?

Just the same as a conventional investment portfolio, time and care needs to be taken to answer these questions; furthermore the answers will be different from client to client.

Hawksworth Classic is a consultancy designed to help individuals create and manage their portfolios. We provide holistic advice on all aspects of starting and maintaining collections at home. Aside from having market leading connections to be able to source and buy the right cars at the proper price; we are able to provide the best routes to market for the sale of specific vehicles whether that is through private sale or auction.

We are able to advise individuals should they be looking to buy a car for a specific event or race. The Mille Miglia for example only allow a very specific list of vehicles to even apply, following that it is down to the condition of the car itself and will depend on how many of those cars are entered or have been entered in the past.

Please feel free to get in touch with me (info@hawksworthclassic.com) if you would like to hear what we can do or simply to suggest future topics of conversation.

Nick Barton

August 4, 2016

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