classic car price article

Swedish Paul

Swedish Paul

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Yes, strange how lots of folks forget what a bubble is? With the interest rates so low, I wonder what people will try and invest in next to make some cash.

When it all goes pear shaped....
 
allandwf

allandwf

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Oh no! here we go again, late 80s all over :( Investment Companies with portfolios of cars.
 
B

bigbob

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A load of tosh. Rare cars have a value but whether something is worth, say, 50, 100 or £200k is impossible to say as it all hangs on relative values so when one falls they all do. I will not be 'investing'.
 
conaero

conaero

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Amazing how most on that list are Italian, shows we all have taste here in what we buy and support.

Another 15 years and another recession followed by a surge will see our beloved 3200 and 4200s on that list I feel.

I was having this discussion at the weekend with someone and this may be why classic cars go up in price so much and would value the forum members in put on this one:

As a private person you can buy and sell 6 cars a year without being classed as a trader.

This means that you dont pay tax on any money you make or loose in the sale, which is great.

So applying this to someone like Chris Evans or any of the investors in the current Classic car surge, is this the same and why in affluent times the prices shoot up?

By this I mean, if someone buys a Ferrari 250 at say £15m, then sells it a few years later for £20m, do they still not pay tax on the £5m as they are classed, like us, and not traders selling 6 cars or more per annum???
 
outrun

outrun

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The value of the sale should not be relevant at all. Whether they buy for £15k and sell for £20k or buy for £15M and sell for £20M, the same rules should apply. That's assuming of course that the purchase method used used was their private name and not a company, offshore vehicle, trust etc. They "should" have already paid the tax on the £15M used to buy the car, just as we have on our paltry £15k.
 
B

bigbob

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Conaero said:
Amazing how most on that list are Italian, shows we all have taste here in what we buy and support.

Another 15 years and another recession followed a surge will see our beloved 3200 and 4200s on that list I feel.
Click to expand...

It will only be a surge as there will be none left. Anyway the market is all in low mileage examples so do more than 2k ps from now and you destroy the value.
 
BL330

BL330

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I have a former neighbour who with another mate have been investing in cars. He has over half a dozen Cooper S's, a Testarossa, Dino V8, Audi Quattro series 1, Lancia Stratos, 308GTB and a Boxer. All of these have soared in value in recent times. Every now and then he organises mates to a drive day to exercise the fleet and we get to follow the leader then swap rides after each stop.
 
conaero

conaero

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outrun said:
The value of the sale should not be relevant at all. Whether they buy for £15k and sell for £20k or buy for £15M and sell for £20M, the same rules should apply. That's assuming of course that the purchase method used used was their private name and not a company, offshore vehicle, trust etc. They "should" have already paid the tax on the £15M used to buy the car, just as we have on our paltry £15k.
Click to expand...

It should be the case yes, but is it?

I mean, if the inland revenue can get a bit of the £5m profit, I am sure they will try!
 
StuartW

StuartW

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From my experience, most people like this buy the vehicles as a business asset whether it be in their sole trader business or in their company so as to offset the running costs as a business expenses. And as soon as they are sold, they have be declared as an asset disposal and therefore pay tax on the profit.
 
TridentTested

TridentTested

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The Tridents still look like good value against the red ones.

Still, I should have bought a Khamsin when they were £15k.
 
Zep

Zep

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LincsOSCA said:
From my experience, most people like this buy the vehicles as a business asset whether it be in their sole trader business or in their company so as to offset the running costs as a business expenses. And as soon as they are sold, they have be declared as an asset disposal and therefore pay tax on the profit.
Click to expand...

This is my understanding. You are not liable for capital gains tax when you sell a car unless it has been used for business (that business may just be buying it to sell in). If you can persuade HMRC that you bought a car for personal use and then not capital gains tax. If you buy it then don't drive it and sell it for 5 million more then HMRC would rightly want a bit of a word....

As for Chris Evans, he makes more money from his car trading activities, a company he runs with his wife, than he does from talking on the radio (if the press are to be believed).


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hilts uk

hilts uk

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Zep said:
This is my understanding. You are not liable for capital gains tax when you sell a car unless it has been used for business (that business may just be buying it to sell in). If you can persuade HMRC that you bought a car for personal use and then not capital gains tax. If you buy it then don't drive it and sell it for 5 million more then HMRC would rightly want a bit of a word....

Yes no CGT on cars unless its your business. Also if the car is there is no road tax for pre 74 cars. You would hope also no depreciation. If you buy a good fully restored car and drive less than say 2000 miles then you just have a few hundred quid of classic car insurance to pay. Hence cost of owning a classic (at least for the first few years) is close to zero and if it goes up in value there is no tax to pay on the profit. The only cost is the opportunity cost of using savings to buy it. However with interest rates at close to zero and financial markets crapping out, this cost is also close to zero for many people. I think these are the financial reasons many are buying classic cars, alongside this there is the desire to own something you can touch and use and maybe something you had on your bedroom wall 30 or 40 years ago.

No doubt we are seeing some speculative money in cars at the moment but I don't think we are in a bubble. The time to worry is when you more and more cars are being bought using finance or where you get more people buying in auction and trying to a quick flip.
Click to expand...
 
Contigo

Contigo

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Plus they are not making them any more and people are keeping hold of them which drives up prices. Look how much Gavin paid for Andretti's F1!!! The market is going nowhere and the bubble will continue to get bigger!
 
midlifecrisis

midlifecrisis

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Buying a used car, classic to make a profit or not is a gamble. Similarly, I can place a bet on a spread betting website and make a few bob that way but I'm not liable for income tax or cgt.
 
hilts uk

hilts uk

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That's true but you can't look at a spread bet on the driveway!

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VMSRTI

VMSRTI

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BL330 said:
I have a former neighbour who with another mate have been investing in cars. He has over half a dozen Cooper S's, a Testarossa, Dino V8, Audi Quattro series 1, Lancia Stratos, 308GTB and a Boxer. All of these have soared in value in recent times. Every now and then he organises mates to a drive day to exercise the fleet and we get to follow the leader then swap rides after each stop.
Click to expand...

Well Bruce, why not head down the highway with the fleet, so the Melbourne boys can help you out with "exercise duties" :)
 
Ian3200

Ian3200

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Looking good! search is for 3200 in the UK, no price limitations at the bottom end... this is how it is at the moment!

Maserati 3200 looking good prices.jpg
 
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