Talk me out of buying a Porsche 911 as an investment....

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
Topic Author
OnFire
Posts: 382
Joined: Sat Feb 16, 2008 10:48 pm

Talk me out of buying a Porsche 911 as an investment....

Post by OnFire »

Talk me out of buying a 1974 Porsche 911 RS clone/tribute with the “profit” I have made with all of my retirement accounts in 2020.

It would basically be “profit taking” and investing in something that won’t really grow, but that won’t depreciate either.

The highs of this particular wave have me nervous.

I am 46 and have 9 years until I collect my firefighter/pararmedic pension.

I made approximately $65k in “profit” between my 403b and my Roth. This car cost approximately $85k and looks 100x better than you think it does.

https://patrickmotorsports.com/blogs/ne ... ansmission

This is not THE car (it’s a private seller), but is built VERY similarly to the one linked above.

It will basically never depreciate. But never really outpace inflation by much because it is a hot rod, and not a true 1974 RS.

Because my pension is 99.999% guaranteed, I invest within these retirement accounts at a 95/5 stock to bond ratio, and use my pension as the bond portion.

The change in administration, the pandemic, and the current P/E ratio have me worried.

Other finances are good. We have a rental house and both it and our primary residence will be paid off in 9 years. My wife is a dentist and makes twice as much as I do. Kids college funds are on track. Collectively, with our net worth, we just joined the “Two Comma Club”....

I believe strongly in two sayings.... “Be fearful when others are greedy, and be greedy when others are fearful.” Almost everyone is being greedy. I am fearful. The other statement is “This time it’s different.” It’s not different. The market will be below its current level at some point. It’s just a matter of guessing when.
Last edited by OnFire on Sat Jan 30, 2021 1:24 am, edited 2 times in total.
Where are all the customers yachts? | | “The most powerful force in the Universe is compound interest.” -Albert Einstein
Cruise
Posts: 2750
Joined: Mon Nov 21, 2016 6:17 pm

Re: Talk me out of buying a car as an investment....

Post by Cruise »

Don't do it. (There, I talked you out of it.)

Just in case you still want that car, just realize that by the time you reach 60, you may have a hard time getting in an out of it due to the tendency of older bodies to not tolerate sitting down and standing up from a low seat while twisting the body. (There, I talked you out of it.)

Of course, the argument for getting it now is that you won't buy it later in life because your body won't tolerate getting into and out of the car.
User avatar
Topic Author
OnFire
Posts: 382
Joined: Sat Feb 16, 2008 10:48 pm

Re: Talk me out of buying a car as an investment....

Post by OnFire »

You’re killing me Small’s....

😑
Where are all the customers yachts? | | “The most powerful force in the Universe is compound interest.” -Albert Einstein
BruDude
Posts: 4211
Joined: Wed Dec 29, 2010 11:28 pm
Location: Las Vegas

Re: Talk me out of buying a car as an investment....

Post by BruDude »

I have owned four 911's and made money on two of the first three that i sold. The third one I lost $1,000 on a $150k car after driving it for 14 months. Cheaper than owning a Hyundai. If you know what you are buying, 911's pretty much forever hold their value. 996, 997, and 991's are all selling for more than they were 3 years ago. I don't know much about this particular version, but if you have done your research and feel confident go for it. You can drive it for a while, have some fun, then sell it for what you paid for it. I doubt the value will go up much if it's a replica/built car though. If you want a car that will go up in value, get yourself a 997.2. That market is up 20-30% this year alone and has been appreciating for about 4 years now. It's also an incredibly fun car to drive, relatively cheap to maintain, and the last of the "analog" sports cars. IMO, the demand for analog sports cars will continue driving up prices for years to come. They don't make them like they used to.
123
Posts: 10415
Joined: Fri Oct 12, 2012 3:55 pm

Re: Talk me out of buying a car as an investment....

Post by 123 »

OnFire wrote: Tue Jan 26, 2021 1:02 am I made approximately $65k in “profit” between my 403b and my Roth. This car cost approximately $85k and looks 100x better than you think it does....Because my pension is 99.999% guaranteed, I invest within these retirement accounts at a 95/5 stock to bond ratio, and use my pension as the bond portion....
No dice. Since your retirement accounts are invested at a 95/5 stock to bond ratio it would seem that you are spending "paper profits" that could easily be reduced in an adverse market situation by 50%. The only way to spend "paper profits" is to actualize them and that includes paying any necessary taxes and early distribution penalties on the distributions. That is not recommended.

Sometimes people get so enthused about their paper profits that they go into debt to utilize them with things like a HELOC, not a good idea either.
The closest helping hand is at the end of your own arm.
User avatar
Topic Author
OnFire
Posts: 382
Joined: Sat Feb 16, 2008 10:48 pm

Re: Talk me out of buying a car as an investment....

Post by OnFire »

123,

I would remove my “original” Roth IRA contributions. As far as I know, I can remove my initial investments at anytime for any reason. Since I’ve had my Roth for over 15 years and have maxed it out every year for the last 15 years, I would have approximately 15x5, or 75k available to me.

I would not touch the earnings or the 403b.

I have over 100k in equity in each of my houses. My rental house is in my name only, not my wife’s.

The reason I want to get my “paper profits” out is because I think they are going to become “paper losses”. 😉
Where are all the customers yachts? | | “The most powerful force in the Universe is compound interest.” -Albert Einstein
User avatar
galawdawg
Posts: 5231
Joined: Thu Dec 14, 2017 11:59 am
Location: Georgia

Re: Talk me out of buying a car as an investment....

Post by galawdawg »

OnFire wrote: Tue Jan 26, 2021 1:02 am Talk me out of buying a car as an investment....

Talk me out of buying a 1974 Porsche 911 RS clone/tribute with the “profit” I have made with all of my retirement accounts in 2020.

It would basically be “profit taking” and investing in something that won’t really grow, but that won’t depreciate either.

It will basically never depreciate. But never really outpace inflation by much because it is a hot rod, and not a true 1974 RS.
Buy it if you'd like but you are fooling yourself if you think it is an "investment."
Wanderingwheelz
Posts: 3145
Joined: Mon Mar 04, 2019 8:52 am

Re: Talk me out of buying a car as an investment....

Post by Wanderingwheelz »

OnFire wrote: Tue Jan 26, 2021 1:02 am Talk me out of buying a 1974 Porsche 911 RS clone/tribute with the “profit” I have made with all of my retirement accounts in 2020.

It would basically be “profit taking” and investing in something that won’t really grow, but that won’t depreciate either.

The highs of this particular wave have me nervous.

I am 46 and have 9 years until I collect my firefighter/pararmedic pension.

I made approximately $65k in “profit” between my 403b and my Roth. This car cost approximately $85k and looks 100x better than you think it does.

https://patrickmotorsports.com/blogs/ne ... ansmission

This is not THE car (it’s a private seller), but is built VERY similarly to the one linked above.

It will basically never depreciate. But never really outpace inflation by much because it is a hot rod, and not a true 1974 RS.

Because my pension is 99.999% guaranteed, I invest within these retirement accounts at a 95/5 stock to bond ratio, and use my pension as the bond portion.

The change in administration, the pandemic, and the current P/E ratio have me worried.

Other finances are good. We have a rental house and both it and our primary residence will be paid off in 9 years. My wife is a dentist and makes twice as much as I do. Kids college funds are on track. Collectively, with our net worth, we just joined the “Two Comma Club”....

I believe strongly in two sayings.... “Be fearful when others are greedy, and be greedy when others are fearful.” Almost everyone is being greedy. I am fearful. The other statement is “This time it’s different.” It’s not different. The market will be below its current level at some point. It’s just a matter of guessing when.
Buying a hot rod is what people do when they’re fearful of a recession?

I’ve owned nearly $300,000 in Porsche’s and none of them were factored into my financial plans. I do agree with the comment made earlier in the thread, and that is if you’re very careful about buying with value in mind you can do pretty well with factory Porsche’s. I never bought one with the intent on making money on it, though.

If you want a Porsche for as little money as possible, buy one that’s around 5 years old, buy it VERY carefully, have it serviced by the book, and don’t put miles on it. Stare at it in the garage on a daily basis. Sell it for for what you bought it for. Repeat. Your cost will be service and insurance.
Being wrong compounds forever.
gips
Posts: 1760
Joined: Mon May 13, 2013 5:42 pm

Re: Talk me out of buying a car as an investment....

Post by gips »

BruDude wrote: Tue Jan 26, 2021 1:21 am I have owned four 911's and made money on two of the first three that i sold. The third one I lost $1,000 on a $150k car after driving it for 14 months. Cheaper than owning a Hyundai.
i dont know anything about cars but my cousin owned a Porsche, i recall the insurance and service costs were somewhat higher than a hyundai. and then there was a bad accident because he really didnt understand how to drive the thing. it was an expensive experience, today he drives a honda.
OnFire wrote: Tue Jan 26, 2021 1:02 am Talk me out of buying a 1974 Porsche 911 RS clone/tribute
i wonder what your wife has to say about this “investment”. she must be very different than my wife...
bob60014
Posts: 3768
Joined: Mon Jul 31, 2017 8:59 pm
Location: The Land Beyond ORD

Re: Talk me out of buying a car as an investment....

Post by bob60014 »

No matter how well done it may be, the "clone/tribute" part always raises the red flags.
SuperTrooper87
Posts: 241
Joined: Tue Jan 26, 2021 5:42 am

Re: Talk me out of buying a car as an investment....

Post by SuperTrooper87 »

OnFire wrote: Tue Jan 26, 2021 1:32 am 123,

I would remove my “original” Roth IRA contributions. As far as I know, I can remove my initial investments at anytime for any reason. Since I’ve had my Roth for over 15 years and have maxed it out every year for the last 15 years, I would have approximately 15x5, or 75k available to me.

I would not touch the earnings or the 403b.

I have over 100k in equity in each of my houses. My rental house is in my name only, not my wife’s.

The reason I want to get my “paper profits” out is because I think they are going to become “paper losses”. 😉
And what would be the future returns on that 75k if you left it there? Much higher than a sports car...
User avatar
Harry Livermore
Posts: 1937
Joined: Thu Apr 04, 2019 5:32 am

Re: Talk me out of buying a car as an investment....

Post by Harry Livermore »

If you want a fun car, by all means buy it. My opinion is that it is in no way an investment. It may appreciate or depreciate. I also agree that the "clone" or "tribute" often impairs, rather than enhances, value.
Cheers
User avatar
corn18
Posts: 2867
Joined: Fri May 22, 2015 6:24 am

Re: Talk me out of buying a car as an investment....

Post by corn18 »

bob60014 wrote: Tue Jan 26, 2021 5:20 am No matter how well done it may be, the "clone/tribute" part always raises the red flags.
^^This. Why not go for a real RS (if you can find one). Will cost a lot more up front but will hold its value. My buddy went through his super car phase and generally, he never "lost" money. But transaction costs were killer (sales tax on $200k is a lot).

Also, will you drive and enjoy this car if you are trying to retain its value?
Consistently sets low goals and fails to achieve them.
User avatar
Sandtrap
Posts: 19591
Joined: Sat Nov 26, 2016 5:32 pm
Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: Talk me out of buying a car as an investment....

Post by Sandtrap »

Buying a fun car is . . . buying a car because you "wanna" buy a car.
Investing is something else. Investing should be boring and not involve speeding tickets or fixing an engine.

Buy the car if you want to buy the car.
Spend the money to buy the car but know it is subtracting not adding from potential retirement $$$$.

j :D
Wiki Bogleheads Wiki: Everything You Need to Know
Shallowpockets
Posts: 2533
Joined: Fri Nov 20, 2015 9:26 am

Re: Talk me out of buying a car as an investment....

Post by Shallowpockets »

49 years old. A sports car. Sounds like a mid life crisis. Paper profits. Itching to spend that money by rationalizing.
What are you getting the wife, the passenger seat? Wow!
User avatar
JPH
Posts: 1427
Joined: Mon Jun 27, 2011 8:56 pm

Re: Talk me out of buying a car as an investment....

Post by JPH »

Remove the word "investment" from your post and then just decide if you want and can afford the car.
While the moments do summersaults into eternity | Cling to their coattails and beg them to stay - Townes Van Zandt
Jack FFR1846
Posts: 18499
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Talk me out of buying a car as an investment....

Post by Jack FFR1846 »

I am absolutely a car guy. Many years of shows, including running Oktoberfest's show for BMW CCA, autocross championships, roadrace track records, was an officer in the Boston BMW CCA chapter. Owned everything from an E30 M3 to a fully prepped racecar to building a Factory Five Cobra, Shelby Cobra replica. Now let me stop. While my Cobra replica looked like the real thing to the untrained eye, it was still not a real Shelby CSX3xxx car. It had no value as the car it mimic'd. It held it's value as a sports roadster. You're getting in the same boat. Your car will hold its value as a "wrecked" air cooled 911. Going away from stock with a 911 or old Corvette or many other collector cars quickly diminishes its value. Sure, it's what you like, but the vast collector base won't even look at it. And if they do, They'll take a stock car value, then subtract what's been done to it to bring it back to stock.

So for a fun car or a racecar, sure. But you'll NEVER get your money back on it.
Bogle: Smart Beta is stupid
Broken Man 1999
Posts: 8626
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

Re: Talk me out of buying a car as an investment....

Post by Broken Man 1999 »

Shallowpockets wrote: Tue Jan 26, 2021 7:23 am 49 years old. A sports car. Sounds like a mid life crisis. Paper profits. Itching to spend that money by rationalizing.
What are you getting the wife, the passenger seat? Wow!
Better a mid-life crisis satisfied by buying a sports car than getting a girlfriend. Much, much cheaper....so I've heard. The sports car won't half your portfolio, a girlfriend might. To top it off, if half your money is gone, the girlfriend might be gone, also...so I've heard.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
onourway
Posts: 3778
Joined: Thu Dec 08, 2016 2:39 pm

Re: Talk me out of buying a car as an investment....

Post by onourway »

Nothing doing if you have to tap your retirement accounts to afford it. Especially Roth accounts.

My father owned a '73 for over 30 years. It was a beautiful car but not so much fun to drive outside of a very narrow circumstance on the right back roads. And even as an experienced driver with lots of track time, I could never fully eliminate the fear that the rear end was going to overtake the front at exactly the wrong moment while enjoying those back roads.

The rest of the time it drove exactly like you'd expect a 45+ year old vehicle to - it was loud, hard to shift, hard to brake, low to the ground, etc. I would take Jack's point - the further these kind of cars get from non-original, the more you are rolling the dice with their value. What style is hot today might be out of favor when you go to sell.
Carguy85
Posts: 1227
Joined: Thu Mar 19, 2020 6:26 pm

Re: Talk me out of buying a car as an investment....

Post by Carguy85 »

2 words come to mind ....opportunity cost. However, If you want the car to enjoy then buy it...Also enjoy the fact that you likely won’t take a hit like if you were to buy a new corvette etc. Unless if you have good connections to paint/body folks or can do that work yourself quickly and are good at it I’m not sure cars are something you should expect to make a decent return on compared to the market..BTW all things automotive as with everything else seem to be priced to the moon. There are certainly plenty of worse things to spend money on for enjoyment that essentially have no hope of recouping the initial purchase price.
User avatar
Harry Livermore
Posts: 1937
Joined: Thu Apr 04, 2019 5:32 am

Re: Talk me out of buying a car as an investment....

Post by Harry Livermore »

Shallowpockets wrote: Tue Jan 26, 2021 7:23 am
What are you getting the wife, the passenger seat? Wow!
Hahaha, my wife loves to drive, and drive fast. We just got her out of her second Honda Odyssey now that the kids are older and can drive. We are still "sensible" though, and now she drives a CR-V ("so much more sporty!") BUT we both miss a stick shift.
I have begun my work, planting the seed that a high mileage Boxster might be a fun and cheap choice when we get some of the college expenses past us. She was particularly excited to hear that such a thing as a 6-speed exists.
I may be the one in the passenger seat much of the time!
:sharebeer
Cheers
smitcat
Posts: 13300
Joined: Mon Nov 07, 2016 9:51 am

Re: Talk me out of buying a car as an investment....

Post by smitcat »

Harry Livermore wrote: Tue Jan 26, 2021 8:35 am
Shallowpockets wrote: Tue Jan 26, 2021 7:23 am
What are you getting the wife, the passenger seat? Wow!
Hahaha, my wife loves to drive, and drive fast. We just got her out of her second Honda Odyssey now that the kids are older and can drive. We are still "sensible" though, and now she drives a CR-V ("so much more sporty!") BUT we both miss a stick shift.
I have begun my work, planting the seed that a high mileage Boxster might be a fun and cheap choice when we get some of the college expenses past us. She was particularly excited to hear that such a thing as a 6-speed exists.
I may be the one in the passenger seat much of the time!
:sharebeer
Cheers
Luckily my wife likes the cars as much as I do as well - both my wife and our daughter have owned 6 speeds. We also have 2 CVR's but I would never mention those in the same sentence as "sporty" - the CX5 is at least a bit "sporty" (lol).
KlangFool
Posts: 31525
Joined: Sat Oct 11, 2008 12:35 pm

Re: Talk me out of buying a car as an investment....

Post by KlangFool »

JPH wrote: Tue Jan 26, 2021 7:26 am Remove the word "investment" from your post and then just decide if you want and can afford the car.

+1,000.


KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
User avatar
cowdogman
Posts: 2070
Joined: Sat Dec 16, 2017 6:44 pm
Location: Washington State

Re: Talk me out of buying a car as an investment....

Post by cowdogman »

+1 to all the above. Don't fool yourself thinking it is an investment, especially a clone.

I love Porsche 911s--always my favorite car. I've never owned one. Last time I looked at a new one (about 15 years ago) I went out a bought a new motorcycle instead (BMW R 1200GS) and that scratched the itch--and was a lot cheaper and more practical. If you want to treat yourself, do it on a smaller scale.

And don't touch your retirement funds.
Last edited by cowdogman on Tue Jan 26, 2021 8:54 am, edited 1 time in total.
MarkBarb
Posts: 908
Joined: Mon Aug 03, 2009 11:59 am

Re: Talk me out of buying a car as an investment....

Post by MarkBarb »

Yet another vote for the view that you should buy it if you want it, but that you should consider it a consumption expense and not an investment. I would also add that part of the cost will be the opportunity cost. Assuming you pay $X for it and it holds that value for ten years, you will have lost the earnings on $X you would have had if it was still invested. Once again, not saying that you shouldn't do it. Just saying that you should approach it as consumption rather than lying to yourself by pretending that it is an investment.
Last edited by MarkBarb on Tue Jan 26, 2021 8:54 am, edited 1 time in total.
User avatar
cowdogman
Posts: 2070
Joined: Sat Dec 16, 2017 6:44 pm
Location: Washington State

Re: Talk me out of buying a car as an investment....

Post by cowdogman »

[Duplicate]
User avatar
markjk
Posts: 540
Joined: Wed Oct 07, 2020 6:01 am

Re: Talk me out of buying a car as an investment....

Post by markjk »

OnFire wrote: Tue Jan 26, 2021 1:02 am Talk me out of buying a 1974 Porsche 911 RS clone/tribute with the “profit” I have made with all of my retirement accounts in 2020.

It would basically be “profit taking” and investing in something that won’t really grow, but that won’t depreciate either.

The highs of this particular wave have me nervous.

I am 46 and have 9 years until I collect my firefighter/pararmedic pension.

I made approximately $65k in “profit” between my 403b and my Roth. This car cost approximately $85k and looks 100x better than you think it does.

https://patrickmotorsports.com/blogs/ne ... ansmission

This is not THE car (it’s a private seller), but is built VERY similarly to the one linked above.

It will basically never depreciate. But never really outpace inflation by much because it is a hot rod, and not a true 1974 RS.

Because my pension is 99.999% guaranteed, I invest within these retirement accounts at a 95/5 stock to bond ratio, and use my pension as the bond portion.

The change in administration, the pandemic, and the current P/E ratio have me worried.

Other finances are good. We have a rental house and both it and our primary residence will be paid off in 9 years. My wife is a dentist and makes twice as much as I do. Kids college funds are on track. Collectively, with our net worth, we just joined the “Two Comma Club”....

I believe strongly in two sayings.... “Be fearful when others are greedy, and be greedy when others are fearful.” Almost everyone is being greedy. I am fearful. The other statement is “This time it’s different.” It’s not different. The market will be below its current level at some point. It’s just a matter of guessing when.
When you factor insurance, upkeep, storage, etc., is it still going to keep up with inflation? I'm with most others on this thread. Treat it for what it is which is not really an investment. I understand the up front logic which is the car will hold value, but you are trading a lot of investable capital from your portfolio to buy this car. That capital would most certainly appreciate more over 10 - 20 years than the car, especially after factoring in the additional costs of car ownership.

You have to live and enjoy your money a bit. You never know what the future will hold. If this is a dream and you can make it work, you should seriously consider it. Just be careful tying to justify it by calling it an investment. That's not really what this is from my perspective.
KneeReplacementTutor
Posts: 674
Joined: Tue Dec 29, 2020 10:52 am

Re: Talk me out of buying a car as an investment....

Post by KneeReplacementTutor »

Tribute/clone probably isn't the best car investment. Build quality is all over the board. Unless it's a Singer 911 (or similar) for half price I'd be inclined to "invest" in something that's 100% original with negligible miles. My two cents.
alfaspider
Posts: 4816
Joined: Wed Sep 09, 2015 4:44 pm

Re: Talk me out of buying a car as an investment....

Post by alfaspider »

I agree with others that it's not really an "investment." It's a very rare car that appreciates beyond the cost to maintain and store it. Moreover, if you really only want it as an investment, you won't be driving it much and will be constantly afraid of the smallest dings.

As for the investment prospects for that specific car- it probably won't lose value, but it's not what I would buy if my main consideration was appreciation. For a collector, the best cars are 100% factory original. Even better if they are pristine condition "survivors" that have never needed restoration. Once you get into "tribute" cars and other modifications, they no longer have an easy to discern value because so much depends on the quality of the work and the tastes of the market. That's why high quality restomod companies like Singer do their own branding. A "Singer Porsche" is worth a lot more than a similarly modified car built in someone's garage or by a no-name shop.
TNWoods
Posts: 194
Joined: Sun Feb 10, 2019 9:04 am

Re: Talk me out of buying a car as an investment....

Post by TNWoods »

Buy it.

Drive it, love it, show it off at Friday night car enthusiast gatherings in supermarket parking lots in your area, enjoy it.

If it eventually goes up in value, great.

If it stays the same, great.

If it goes down, who cares? It won't go to zero.

The amount you are spending on it is not enough to make you eat cat food when you are 65.

But, as so many others said, don't call it an investment. (Sort of related, I know a couple who went into bankruptcy, and prior to that they had a very bad habit of referring to everything they wanted to buy that wasn't a necessity as "investing". As in, "We decided to invest in a couple jet-skis this summer". I believe their word-choice affected their spending decisions, and that's how they ended up bankrupt.)

TNWoods
KneeReplacementTutor
Posts: 674
Joined: Tue Dec 29, 2020 10:52 am

Re: Talk me out of buying a car as an investment....

Post by KneeReplacementTutor »

If the tribute 911 would be an investment, go to bringatrailer.com and type "tribute" into the search box. You will see all of the 911 Tributes that have been for sale there. You'll also see that most of them never met the seller's reserve and therefore didn't sell.

https://bringatrailer.com/search/tribute/
Last edited by KneeReplacementTutor on Tue Jan 26, 2021 10:32 am, edited 1 time in total.
London
Posts: 722
Joined: Sun Dec 11, 2016 10:50 am

Re: Talk me out of buying a car as an investment....

Post by London »

Shallowpockets wrote: Tue Jan 26, 2021 7:23 am 49 years old. A sports car. Sounds like a mid life crisis. Paper profits. Itching to spend that money by rationalizing.
What are you getting the wife, the passenger seat? Wow!
I think buying this car is a bad idea but I don’t subscribe to the idea that any fun purchase over the age of 49 is a midlife crisis. That’s a tired take. If you can afford something fun, why live like a monk after 40?
260chrisb
Posts: 1281
Joined: Wed Apr 28, 2010 7:26 pm

Re: Talk me out of buying a car as an investment....

Post by 260chrisb »

I love these posts! :D One suggested you buy a Porsche and not drive it......don't do that. I'll talk you out of buying a car as an "investment" but not out of buying the car, if you can afford it, and if it's something you know you'll enjoy. I own several cars that have become great investments but I didn't buy them simply as an investment. Tribute cars are very expensive, are not for everyone, and nor are old Porsches in general so understand what you're buying. I own a vintage '80s 911 and it's arguably the greatest car I've ever owned (and I've owned a lot of cars) but throwing the keys to someone and letting them drive it may result in a confused individual having no further interest. Assuming you've driven one of these or something similar (or another Porsche for that matter) and know what they are and what to expect from it, go for it. Don't take profits from a retirement account to so. Just buy it. If it ultimately goes up in value so be it, if it doesn't so be it.
Tattarrattat
Posts: 306
Joined: Wed Aug 19, 2020 6:05 pm

Re: Talk me out of buying a car as an investment....

Post by Tattarrattat »

Agree with above. If it's a hobby you like and can afford it, go for it. Enjoy your life. Definitely wouldn't use the word or think of it as an "investment." That's just a rationalization for doing something you know in your heart is about consumption. Also agree that real car collectors, or any collectors for that matter - guitars, etc., are for the most part interested in "stock". Tributes or repros are about fun, not retention of value.
260chrisb
Posts: 1281
Joined: Wed Apr 28, 2010 7:26 pm

Re: Talk me out of buying a car as an investment....

Post by 260chrisb »

On a separate note; people tend to want and need to have justification for a purchase that is not "normal". You know, the midlife crisis angle etc......no such thing. The two most often used terms that are used with cars are "it's a great investment" and "it's once in a lifetime". Seldom the case, and never the case.
TomWambsgans
Posts: 78
Joined: Sat Jan 23, 2021 4:09 pm

Re: Talk me out of buying a car as an investment....

Post by TomWambsgans »

Wanderingwheelz wrote: Tue Jan 26, 2021 3:59 am If you want a Porsche for as little money as possible, buy one that’s around 5 years old, buy it VERY carefully, have it serviced by the book, and don’t put miles on it. Stare at it in the garage on a daily basis. Sell it for for what you bought it for. Repeat. Your cost will be service and insurance.
Okay, now you're talking *me* into buying a Porsche when I had no intention of doing so.
User avatar
Watty
Posts: 28859
Joined: Wed Oct 10, 2007 3:55 pm

Re: Talk me out of buying a car as an investment....

Post by Watty »

OnFire wrote: Tue Jan 26, 2021 1:02 am I am 46
.....
It will basically never depreciate.
I would not count on that "never depreciate" assumption.

I am not a "car guy" at all but aren't there really two types of collectable cars like;

1) The top 5% of very desirable cars that are basically museum quality.

2) The other 95% that people mostly buy to drive and enjoy since that is the type of car that they grew up with and wanted when they were young.

It would be good to check to see how the second or third tier of collectable cars from the 1940s, 50s, and 60s are doing as the generations of people that grew up with them gets elderly or dies off.

I don't recall where it read it but I vaguely recall hearing that the car market for cars in that date range is real soft, unless the car is very special, because there are so many sellers and not a lot of new buyers .

I would suspect that a lot of buyers of a car like that would be older than you are so by the time you want to sell it the market may already be saturated with them.

I would look at a purchase of a car like that as being a pure consumption item and it will also have ongoing costs for maintenance, storage, and insurance.

With a large purchase like that you should also budget for your spouse to be able to also make a similar purchase that he or she wants.
JackoC
Posts: 4714
Joined: Sun Aug 12, 2018 11:14 am

Re: Talk me out of buying a car as an investment....

Post by JackoC »

Wanderingwheelz wrote: Tue Jan 26, 2021 3:59 am I’ve owned nearly $300,000 in Porsche’s and none of them were factored into my financial plans. I do agree with the comment made earlier in the thread, and that is if you’re very careful about buying with value in mind you can do pretty well with factory Porsche’s. I never bought one with the intent on making money on it, though.

If you want a Porsche for as little money as possible, buy one that’s around 5 years old, buy it VERY carefully, have it serviced by the book, and don’t put miles on it. Stare at it in the garage on a daily basis. Sell it for for what you bought it for. Repeat. Your cost will be service and insurance.
I haven't actually bought cars even trying to avoid depreciation (I've bought new BMW's, no Porsches yet), but I think the key points are obvious:
1) difference between minimizing cost of ownership by buying somewhere down the depreciation curve, vs. actually expecting to make money.
2) related, if a car is really an investment, conceivable if not necessarily likely to succeed, you have to minimize the miles. Getting a lot of fun out of driving it, but it's also an investment...that's where it would cross over to outright fantasy I think.

A friend once put a pretty big bonus into a new limited production exotic. She rented a climate controlled garage, up on blocks, prepared for long term storage. The investing idea was for it to become a rarity. I lost touch with her and don't know it turned out, and now no longer remember the exact model either. I don't think this is a compelling idea for investing, and am sure the idea would not be popular here. The point is just that she was at least not kidding herself that it could be a dual purpose investment *and* have lots of fun driving it. Although as a new car there's special value to almost zero odometer, I guess you could drive an already older one a little.
finite_difference
Posts: 3633
Joined: Thu Jul 09, 2015 7:00 pm

Re: Talk me out of buying a car as an investment....

Post by finite_difference »

Jack FFR1846 wrote: Tue Jan 26, 2021 7:30 am I am absolutely a car guy. Many years of shows, including running Oktoberfest's show for BMW CCA, autocross championships, roadrace track records, was an officer in the Boston BMW CCA chapter. Owned everything from an E30 M3 to a fully prepped racecar to building a Factory Five Cobra, Shelby Cobra replica. Now let me stop. While my Cobra replica looked like the real thing to the untrained eye, it was still not a real Shelby CSX3xxx car. It had no value as the car it mimic'd. It held it's value as a sports roadster. You're getting in the same boat. Your car will hold its value as a "wrecked" air cooled 911. Going away from stock with a 911 or old Corvette or many other collector cars quickly diminishes its value. Sure, it's what you like, but the vast collector base won't even look at it. And if they do, They'll take a stock car value, then subtract what's been done to it to bring it back to stock.

So for a fun car or a racecar, sure. But you'll NEVER get your money back on it.
+1.

I also thought collectors want it to be completely original. Sometimes it’s matching VINs, but other times if the car/bike is extremely rare then as long as it’s all original that’s acceptable.

Lastly, you’re not supposed to drive it too much. But you need to keep it up well. It will need to sit in a garage under cloth.

Personally, I’d buy a Miata or WRX or mid-engine Corvette or Model 3/S or Mach-E. Those would be fun, have better performance and safety, and not cost a whole arm and a leg. When you’re rich you can think about collecting. If it’s not appreciating or depreciating, then you can always buy it later.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
User avatar
Harry Livermore
Posts: 1937
Joined: Thu Apr 04, 2019 5:32 am

Re: Talk me out of buying a car as an investment....

Post by Harry Livermore »

smitcat wrote: Tue Jan 26, 2021 8:41 am
We also have 2 CVR's but I would never mention those in the same sentence as "sporty" - the CX5 is at least a bit "sporty" (lol).
Hahaha, so true. I should have put the "lulz" in after the "sporty"...
Cheers
aerosurfer
Posts: 339
Joined: Fri Feb 02, 2018 5:10 am

Re: Talk me out of buying a car as an investment....

Post by aerosurfer »

The collector car market is STRONG right now. 2020 did nothing to slow it down. Thats not likely to change.

Like was said the opportinity costs are what takes away from the investment potential. The other thing is picking the right winner. There are lots of underappreciated 80s and 90s cars that are finally getting thier due. Look up prices for Ferrari 308/328/348 and BMW e30 M3s, even Porshce 928/968 too They have gone silly, and might soften but not likely to really come back down. Any 3 pedal car from the 2000+ and up are also likely to stay a good bet.

Myself and others in our age bracket have reached the Age/savings/time point in life to start enjoying the Poster cars from our childhood.

On the Flip side Ferrari Daytona prices have soften a bit, but still trade for 450-700+. The older stuff is a whole nother echelon.

Buy something you will enjoy or have an attachent too. A clone vehicle is not an investment car, short of some limited Jaguar XK and few other HIGH $$ reproduction cars. A vintage (or any aircooled) porsche shouldnt lose you money, but dont plan on paying for college with it
User avatar
JoeRetire
Posts: 15381
Joined: Tue Jan 16, 2018 1:44 pm

Re: Talk me out of buying a car as an investment....

Post by JoeRetire »

OnFire wrote: Tue Jan 26, 2021 1:02 am Talk me out of buying a 1974 Porsche 911 RS clone/tribute with the “profit” I have made with all of my retirement accounts in 2020.

It would basically be “profit taking” and investing in something that won’t really grow, but that won’t depreciate either.
How do you know it won't depreciate?

It's pretty and seems like it might be fun, but seems like a terrible "investment". I assume you have a safe, clean space in which to store it and aren't actually planning to drive your clone/tribute/investment?
I believe strongly in two sayings.... “Be fearful when others are greedy, and be greedy when others are fearful.” Almost everyone is being greedy. I am fearful. The other statement is “This time it’s different.” It’s not different. The market will be below its current level at some point. It’s just a matter of guessing when.
You think you are fearful where others are greedy? All others? Most others? How did you make that determination?

I don't know anyone who thinks "investing" in a car is a good response to a fear of the current market. Buy a car if you like, and call it an "investment" if it makes you feel better. Good luck with that.
Last edited by JoeRetire on Tue Jan 26, 2021 10:34 am, edited 1 time in total.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Camarillo Brillo
Posts: 31
Joined: Thu Apr 19, 2018 1:45 pm

Re: Talk me out of buying a car as an investment....

Post by Camarillo Brillo »

Cool. Finally a topic I know a lot about.

I bought a '73 911S for $12.5K in 1986 and it subsequently sold on Goodings 20+ years later for $214K. I drove it all those years and put 180K miles on it. Restored it twice.

I now have an absolutely pristine, original, low mileage 1975 Carrera; a 1990 triple black 964 Carrera Cab that's my summer daily driver; a low mileage 1996 Carrera C2; and a daily driver 2018 Macan S.

I paid $60K for the 1975 and it's now worth $100K+ (based on two nearly identical cars that sold on the big auction sites); $25K for the 1990 and it's now worth $45-$50 primarily because it has a freshly re-built engine and a a cosmetic refresh; and $55K for the 1996 that is now worth $65K. The Macan will only depreciate.

When deciding which cars to buy I consult experts and follow their advice very closely. Without even calling them I will tell you that the car you're looking at is a total crapshoot and will probably not appreciate. It may very well drop in value. It is not original, does not have original paint, is a conglomeration of components, and will appeal to only a very limited audience.

If you're looking for one of the best values with a good shot at appreciation I would suggest you look at the 996 twin turbos (2001 - 2004). Those are absolute super cars that you can get for around $45K. The appreciation outlook on them is very good. They are great daily drivers and handle extremely well in the snow. Look at Bring a Trailer or PcarMarket for candidates.

If you want a pre-1976 Porsche that you want to hold for appreciation purposes I would suggest you consider 1974 or 1975 Carreras. You would need to find one in nearly original condition (including paint). I think it's hard to find a pre-74 911 that's reasonable priced because of their incredible appreciation over the last decade.

I will be selling my 1975 Carrera on Bring a Trailer in Spring. Drop me a PM if you want some pics.

Good luck.
bogledogle
Posts: 656
Joined: Wed May 07, 2014 4:34 pm

Re: Talk me out of buying a car as an investment....

Post by bogledogle »

Sweet car!

Cars are usually not investments, even when you sell them for more than what you bought them, if you account for all the sunk costs. But if you enjoy the hell out of em, then it's an investment in you! :sharebeer

Replicas will only hold value if they are from a "famous" builder. And even then, you will have a very limited set of buyers.
hi_there
Posts: 1182
Joined: Sat Aug 29, 2020 7:00 pm

Re: Talk me out of buying a car as an investment....

Post by hi_there »

You should keep those 2020 gains in your retirement fund to offset the years where the investments don't perform well.

But anyway... just like I always like to propose - it's not a yes/no question of "should I buy an $85k car or nothing". Perhaps there is some room to compromise and consider a cheaper car that will also provide some entertainment value.
harrychan
Posts: 2047
Joined: Sun Nov 14, 2010 8:37 pm
Location: Pasadena

Re: Talk me out of buying a car as an investment....

Post by harrychan »

This person probably thought his super car's value would hold up.

https://robbreport.com/motors/cars/a-ma ... t-2931454/
This is not legal or certified financial advice but you know that already.
barnaclebob
Posts: 5586
Joined: Thu Aug 09, 2012 10:54 am

Re: Talk me out of buying a car as an investment....

Post by barnaclebob »

Cars are only investments only so long as there are nostalgic old people with money to buy them. Old porsches may be popular right now but who knows in 20 years.
Aged Maduro
Posts: 405
Joined: Thu Dec 17, 2020 6:17 pm

Re: Talk me out of buying a car as an investment....

Post by Aged Maduro »

When i was ten years old my dad told our family that he was buying a Jaguar XJS Touring Coupe as an investment. I found it odd that this investment cost so much of his time (he was taking it to the shop every other weekend) and his money (it was an endless money pit). Needless to say, dad's investment did not work out so well. A few years later I realized that this is what is known as a midlife crisis and that he was lying to himself, and to us by extension. Don't do it.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Talk me out of buying a car as an investment....

Post by dbr »

My dad owned a somewhat special car that was stolen. Apparently he ended up filing capital gains tax as the insurance settlement returned more money than the purchase price of the car, at least that's the version I heard.
h82goslw
Posts: 492
Joined: Fri Jun 17, 2016 5:44 am

Re: Talk me out of buying a car as an investment....

Post by h82goslw »

Camarillo Brillo wrote: Tue Jan 26, 2021 10:32 am Cool. Finally a topic I know a lot about.

I bought a '73 911S for $12.5K in 1986 and it subsequently sold on Goodings 20+ years later for $214K. I drove it all those years and put 180K miles on it. Restored it twice.

I now have an absolutely pristine, original, low mileage 1975 Carrera; a 1990 triple black 964 Carrera Cab that's my summer daily driver; a low mileage 1996 Carrera C2; and a daily driver 2018 Macan S.

I paid $60K for the 1975 and it's now worth $100K+ (based on two nearly identical cars that sold on the big auction sites); $25K for the 1990 and it's now worth $45-$50 primarily because it has a freshly re-built engine and a a cosmetic refresh; and $55K for the 1996 that is now worth $65K. The Macan will only depreciate.

When deciding which cars to buy I consult experts and follow their advice very closely. Without even calling them I will tell you that the car you're looking at is a total crapshoot and will probably not appreciate. It may very well drop in value. It is not original, does not have original paint, is a conglomeration of components, and will appeal to only a very limited audience.

If you're looking for one of the best values with a good shot at appreciation I would suggest you look at the 996 twin turbos (2001 - 2004). Those are absolute super cars that you can get for around $45K. The appreciation outlook on them is very good. They are great daily drivers and handle extremely well in the snow. Look at Bring a Trailer or PcarMarket for candidates.

If you want a pre-1976 Porsche that you want to hold for appreciation purposes I would suggest you consider 1974 or 1975 Carreras. You would need to find one in nearly original condition (including paint). I think it's hard to find a pre-74 911 that's reasonable priced because of their incredible appreciation over the last decade.

I will be selling my 1975 Carrera on Bring a Trailer in Spring. Drop me a PM if you want some pics.

Good luck.
You’re living my dream. Feel free to post pics of all your cars. I’m sure OP would enjoy them, as would I.
Locked