Ever dreamt of owning a Ferrari or McLaren? How about a Lamborghini?
For most people owning these play-things for millionaires is out of reach, but that’s changing. Kind of.
However before you get too excited, you won't actually be allowed to drive any of the cars. This is an investment opportunity for experienced investors rather than a chance to rip along a scenic stretch of road or test track.
Described as a ‘new type of alternative investment,’ the Supercar Investment Club offers the chance to buy a stake in a supercar in hopes of making a profit when the vehicle is sold.
The firm claims a Ferrari F50 for example, saw its value shoot 397 per cent higher over five years according to its own research of auction prices.
Unlike most types of vehicle, supercars often have very limited production runs so supply is fixed, while demand often continues to rise over time.
Director of the club Adam Sanderson said he spotted the chance to make some money in supercars after a stint working in property and believes the club is the ‘first and only’ company offering this type of investment.
After joining a property investment firm, it really opened my eyes to the level of capital growth certain high-end supercars were achieving compared to the property market,’ Sanderson said.
‘It’s evident from the low mileage of these ultra-rare cars that many rarely see the road or race track and the majority of their multi-millionaire owners simply store them as ‘automotive art’, potentially selling them for a profit at a later date.’
Adopting a similar model and fees as property crowdfunding companies, Supercar Investment Club was formed to provide experienced investors with the chance to potentially benefit from the incredible capital growth only wealthy individuals have seen from certain supercars, Sanderson explained.
The club accepts a minimum investment of £500 (NZ $975) a share and in return investors own a stake in a high-end supercar as well as the chance to see the vehicles up close at investor events.
The club takes an upfront fee of six per cent and a one per cent three-year management fee for the chance to invest, while an early exit would see you charged 15 per cent of any gross profits.
However, enough people need to want to invest in a given car for it to be bought and held until profitable again and if the funding goal for a particular car is not met then all money, including fees, will be returned to the investor, the club said.
Consider this carefully before investing
The idea of cashing in on exclusive supercar prices sounds tempting - especially if you are a car fan who fancies combining investing with your passion, writes Simon Lambert.
But this is a high risk investment into assets priced on sentiment that could prove hard to sell. It also comes with hefty fees.
It's true that very rare supercar prices have seen some astonishing growth in recent years, but that is not a reason to believe this scenario will continue.
Classic car prices have come off the boil over the past year, rare supercar prices may see the same thing happen.
Such cars are priced on rarity and demand - sentiment in such markets can swiftly shift if prices start falling.
The Supercar Investment Club has an upfront fee of 6 per cent and a 1 per cent three-year management fee, and an early exit carries a 15 per cent charge on any gross profits.
A traditional stockmarket investment fund should carry no upfront fee on investing, if done through a DIY investment platform, and typically charges about 0.75 per cent a year, with the ability to sell out at any time.
The traditional investing wisdom is that alternative investments should only make up a small proportion of your overall portfolio - perhaps 5 per cent maximum.
With any alternative investment, you must be willing to see your stake potentially decline in value or take time to withdraw if you need it.
- Daily Telegraph