Car crowd funding

[rivarama]

This is amazing !! Can’t believe people invest in these average cars thinking they will make money. Their whole marketing spill is based on the bubble we’ve seen over the past 10 years.

TheCarCrowdAR - The UKs first classic car investment platform

thecarcrowd.co.uk

Seems to me like a brilliant way to pay for the owners’ private collection, which I am sure they drive every once in a while “to keep them running and keeping them in top shape”

May be I should start the same business and buy 51% of each car, so that the other owners making up 49% can’t force me to sell... great way to subsidise my hobby. I might even get a government emergency loan to bankroll my business (obviously kidding)

 

[midlifecrisis]

I saw something similar at the classic car show back in February.
This version was that you buy an equal share of the car with others and the car becomes a registered company. You are charged storage, maintenance fees etc by the car-sharing company but if your car is used for a film or TV, you get the appearance fee, which should cover your costs.
So how do you win?
When you and the other shareholders decide to sell, hopefully at a higher price. Tricky huh. The car-sharing company had a Ferrari Mondial and a pug 205 as examples of the profitable cars.
So who really wins?
The car-sharing company who charge you the fees for storage, maintenance and administration. I'm sure this mounts up.

 

[MrPea]

That 51% concept sounds ideal! Everyone else pays you for storage and maintainance costs, their money is locked in unless they want to pay you the consultancy-rate administration costs of selling shares before you want to move the car on. They don't get to drive it but you can have the fun when you need it. Hey, why not drive your car to the Riviera for a photoshoot? Claim all running costs, take your own camera and take some pics; then sell prints to the other shareholders so they can put an expensive pretty car pic on their walls saying "That's mine!" Okay, so you'll have to give that money back to the shareholders, but what if it's magically just the right amount to cover your trip?

 

[FIFTY]

They have a stand at the Festival Centre in Basingstoke. I was chatting to the guy there and he said they recently purchased a Maserati Coupe GT (manual 4200) with low mileage that they are going to be putting up on their site.

 

[rivarama]

That 51% concept sounds ideal! Everyone else pays you for storage and maintainance costs, their money is locked in unless they want to pay you the consultancy-rate administration costs of selling shares before you want to move the car on. They don't get to drive it but you can have the fun when you need it. Hey, why not drive your car to the Riviera for a photoshoot? Claim all running costs, take your own camera and take some pics; then sell prints to the other shareholders so they can put an expensive pretty car pic on their walls saying "That's mine!" Okay, so you'll have to give that money back to the shareholders, but what if it's magically just the right amount to cover your trip?

My point really!

 

[TheCarCrowd]

Hi, My name is David the CEO of TheCarCrowd which i believe is the business being discussed on this thread. We had seen a bit of traffic come via this website so i wanted to check it out and see what members are saying.
Firstly thank you to those who have spoken to us and remain positive on the concept, we are a new business and so getting the word out there is difficult, especially when it appears people are very quick to be negative. To clarify a couple of points above.
The business is set up to help people get access to the strong returns delivered by classic cars since 2005. We are aimed at people who maybe can't afford their own classic but who love cars and would still like to feel closer to a car they have always loved. TheCarCrowd DO NOT Drive the cars and no one is paying for anyone's private collection. If you read the How It Works section of the website you will see that all cars are FULLY owned by the investors with no one from TheCarCrowd taking any shares. This is due to the FCA regulations around staff and immediate family buying any shares which would be considered conflicts of interest for the exact reasons a couple of people have outlined above.
We are looking to source modern classics to take advantage of the future spikes in residual values and not purchasing cars like E-Types or Austin Healey's that have already peaked.
All investors are charged a 5% fee on purchasing their shares to account for storage, maintenance and insurance, and the investors can view their car at any time at the storage center. We work on economies of scale to ensure the 5% covers the costs and will not charge investors another penny in management fees.
Anyone can list their shares for sale at any point via our bulletin board and there are no fees to sell your shares.
As we are storing the cars like works of art to maximize the return on investment we also invite investors to 4 track events per year with the charity Sporting Bears and Great British Sportscars to give investors the chance to drive track focused cars and have some fun.
I realise their is a lot of skepticism around businesses like ours but we are regulated by the FCA [https://register.fca.org.uk/s/firm?id=0014G00002WzZDNQA3 - FRN 931554], we are full limited and we only exist to try and help petrol heads invest in something they love and might otherwise not be able to afford.
Hope that clarifies a few things and i appreciate it is not for everyone (especially if you can afford your own classic car collection) but i hope people can keep an open mind and support an automotive based business. thank you for taking the time to read this. David

 

[dickygrace]

Good on you for coming on here to explain to the sceptical ones amongst us.

 

[MrPea]

Hi, My name is David the CEO of TheCarCrowd which i believe is the business being discussed on this thread. We had seen a bit of traffic come via this website so i wanted to check it out and see what members are saying.
Firstly thank you to those who have spoken to us and remain positive on the concept, we are a new business and so getting the word out there is difficult, especially when it appears people are very quick to be negative. To clarify a couple of points above.
The business is set up to help people get access to the strong returns delivered by classic cars since 2005. We are aimed at people who maybe can't afford their own classic but who love cars and would still like to feel closer to a car they have always loved. TheCarCrowd DO NOT Drive the cars and no one is paying for anyone's private collection. If you read the How It Works section of the website you will see that all cars are FULLY owned by the investors with no one from TheCarCrowd taking any shares. This is due to the FCA regulations around staff and immediate family buying any shares which would be considered conflicts of interest for the exact reasons a couple of people have outlined above.
We are looking to source modern classics to take advantage of the future spikes in residual values and not purchasing cars like E-Types or Austin Healey's that have already peaked.
All investors are charged a 5% fee on purchasing their shares to account for storage, maintenance and insurance, and the investors can view their car at any time at the storage center. We work on economies of scale to ensure the 5% covers the costs and will not charge investors another penny in management fees.
Anyone can list their shares for sale at any point via our bulletin board and there are no fees to sell your shares.
As we are storing the cars like works of art to maximize the return on investment we also invite investors to 4 track events per year with the charity Sporting Bears and Great British Sportscars to give investors the chance to drive track focused cars and have some fun.
I realise their is a lot of skepticism around businesses like ours but we are regulated by the FCA [https://register.fca.org.uk/s/firm?id=0014G00002WzZDNQA3 - FRN 931554], we are full limited and we only exist to try and help petrol heads invest in something they love and might otherwise not be able to afford.
Hope that clarifies a few things and i appreciate it is not for everyone (especially if you can afford your own classic car collection) but i hope people can keep an open mind and support an automotive based business. thank you for taking the time to read this. David

Hi David,
Thanks for your explanation and taking the time to give it. Welcome along to the forum.
You raise some very good points that I couldn't see anywhere that are helpful to allay schepticism such as mine.
The 5% and no further fees is particularly helpful to read and, had that been more visible on the site I'd have noted it.
Having Sporting Bears on board - they're a good bunch doing good stuff - nice work to partner with them.
How do you value shares as and when people want to sell them? Clearly you're not going to be putting the car in question up for sale/auction.
Stevie

 

[rivarama]

Thank you for coming to this thread.
So you are saying that anyone buying a share advertised on your website for as low as £18.90 gives you the right to drive that particular car during the track days you guys organise?

 

[TheCarCrowd]

Hi David,
Thanks for your explanation and taking the time to give it. Welcome along to the forum.
You raise some very good points that I couldn't see anywhere that are helpful to allay schepticism such as mine.
The 5% and no further fees is particularly helpful to read and, had that been more visible on the site I'd have noted it.
Having Sporting Bears on board - they're a good bunch doing good stuff - nice work to partner with them.
How do you value shares as and when people want to sell them? Clearly you're not going to be putting the car in question up for sale/auction.
Stevie

Hi MrPea, thank you for your feedback and we will look to make the messaging clearer on the fees when we launch the new website in Jan. In terms of the share valuations, we have the cars valued quarterly either via TheMarket, Glenmarch, HAGI or Historics Auctions dependent on the make and model of the car and its rarity. That valuation is then uploaded to the site and the individual share holdings reflect the overall valuation. Should you wish to sell your shares at that point you can list them at the latest valuation. we can not guarantee a sale but we do support with marketing and will email out to our full database to inform them that more shares are available. Thank you. David

 

[TheCarCrowd]

Thank you for coming to this thread.
So you are saying that anyone buying a share advertised on your website for as low as £18.90 gives you the right to drive that particular car during the track days you guys organise?

Hi, Sorry i think there is a little confusion. The investment cars are not driven at trackdays. Instead we invite investors to use cars from one of our partners Great British Sportscars https://www.greatbritishsportscars.com/ as well as have passenger rides in Sporting Bears cars. We also offer the chance to rent cars through RNG Classics to use. We do bring the investment cars along and invite people to interact with them but the main point of the business is to deliver return on investment so we wont use the cars on track. We want the track events to bring investors together as a community of like minded people who love cars, love their investments and also want to have a bit of fun on track in a safe environment. Here is a quick video of one we ran before Covid spoiled this years plans.

https://www.facebook.com/video.php?v=282339119414223

 

[dickygrace]

Does a share in a car therefore not permit you to ever use it? It’s just for investment purposes?

 

[TheCarCrowd]

Does a share in a car therefore not permit you to ever use it? It’s just for investment purposes?

We are focused on the investment side rather than being a supercar or classic car time share club. We want to give investors the best return on investment but also wanted it to feel more than just another boring investment where you get nothing back apart from a quarterly statement. That is why we introduced the track events aspect to give investors a real driving experience. It might not be in their car but it still gives a thrill and the ability to join a community of like-minded people. We may look to introduce a tier system in 2021 to allow larger investors the chance to have a passenger experience but currently we want to make this accessible to all and avoid any elitism where possible. Hope that helps.
P.s - Really love the Gransport LE on your site. That is gorgeous!

 

[dickygrace]

We are focused on the investment side rather than being a supercar or classic car time share club. We want to give investors the best return on investment but also wanted it to feel more than just another boring investment where you get nothing back apart from a quarterly statement. That is why we introduced the track events aspect to give investors a real driving experience. It might not be in their car but it still gives a thrill and the ability to join a community of like-minded people. We may look to introduce a tier system in 2021 to allow larger investors the chance to have a passenger experience but currently we want to make this accessible to all and avoid any elitism where possible. Hope that helps.
P.s - Really love the Gransport LE on your site. That is gorgeous!

Thanks for clarifying, cracking investment that one

 

[foibles]

Hi MrPea, thank you for your feedback and we will look to make the messaging clearer on the fees when we launch the new website in Jan. In terms of the share valuations, we have the cars valued quarterly either via TheMarket, Glenmarch, HAGI or Historics Auctions dependent on the make and model of the car and its rarity. That valuation is then uploaded to the site and the individual share holdings reflect the overall valuation. Should you wish to sell your shares at that point you can list them at the latest valuation. we can not guarantee a sale but we do support with marketing and will email out to our full database to inform them that more shares are available. Thank you. David

Hi David, could you explain the math for me please?

**You acquire a car at 100k.
'*1000 shares so that's 100 apiece.
**Each share attracts a 5‰ premium to cover all related costs for' the life of the investment'?

That 5% premium is tantamount to 5k for the investment.

Which on yearly outgoings for... Say.... A Ferrari 550, including storage, service and maintenance by reputable mechanics, insurance, reputable transportation services, and potentially even tax and company legals.... I could see that 5k being eaten up in the first year alone.

So if the car stays on the books for 15 years.... How will all that be paid for?

Please explain what I'm missing here....my presumption is that these costs are the responsibility of the company so... Whilst you may not charge asset under management fees... There are still considerable costs to be borne...

 

[rivarama]

I am at a complete loss too. Are the cars being brought to events by lorries? Or are they being driven from storage to the event location by yourselves and your employees / family members?

I just can’t see how 5% covers all those costs...

Also from personal experience from other crowdfunding platforms, selling those investments on the board of your website means that these shares are highly illiquid... I think this should be made clear on the website.

Out of curiosity, have you already sold any cars from your collection? Do you publish results of actual sale transactions? Do you also report number of shares transactions between members to your shareholders?

I think that having a bit more transparency on the website would help potential investors make up their minds.

 

[TheCarCrowd]

Hi David, could you explain the math for me please?

**You acquire a car at 100k.
'*1000 shares so that's 100 apiece.
**Each share attracts a 5‰ premium to cover all related costs for' the life of the investment'?

That 5% premium is tantamount to 5k for the investment.

Which on yearly outgoings for... Say.... A Ferrari 550, including storage, service and maintenance by reputable mechanics, insurance, reputable transportation services, and potentially even tax and company legals.... I could see that 5k being eaten up in the first year alone.

So if the car stays on the books for 15 years.... How will all that be paid for?

Please explain what I'm missing here....my presumption is that these costs are the responsibility of the company so... Whilst you may not charge asset under management fees... There are still considerable costs to be borne...

Hi, its a good question. The fee charges at point of investment can be up to 10% dependent on the car and that is laid out for the investor prior to investing. The more prestigious and hard to maintain the car the higher the % fee up to the 10% cap. We do benefit from economies of scale so the storage costs and insurance are far cheaper than if you were just running a single car. On the maintenance side we are sourcing very high quality, well cared for modern classics and not looking for older cars in need of restoration. The maintenance on a 360 for example are around £600 per year and then £2000 once every 3 years.

Within the modelling there is also an assumption that shares will be traded during the trading windows and incoming investors will pay the same % fee towards the maintenance again topping up the pot.

Finally the cars are also put forward for events and promotional work which earn in year dividends for investors. This revenue is also used to offset any additional maintenance, transport or storage costs.

We are a new start up and have used a set of assumptions to try and get a realistic but low fee for investors in order to maintain the cars. If this plays out in a different way we may adjust the fee structure in future however we will NOT charge investors additional fees or add on Asset Under Management charges for any existing investors.

hope that helps

 

[rivarama]

Hi David,
Another question, your website mentions that you are regulated and offered protection under the FCA. Having checked both the FCA and PRA register, it appears that most protections they offer do not apply to Thecarcrowd - see below. Would you mind clarifying

Thank you

 

[TheCarCrowd]

I am at a complete loss too. Are the cars being brought to events by lorries? Or are they being driven from storage to the event location by yourselves and your employees / family members?

I just can’t see how 5% covers all those costs...

Also from personal experience from other crowdfunding platforms, selling those investments on the board of your website means that these shares are highly illiquid... I think this should be made clear on the website.

Out of curiosity, have you already sold any cars from your collection? Do you publish results of actual sale transactions? Do you also report number of shares transactions between members to your shareholders?

I think that having a bit more transparency on the website would help potential investors make up their minds.

Hi,

Please see above regarding the % fee for storage etc.

The cars are not driven by TheCarCrowd members. The shareholders get to vote on what events and shows the cars attend and then any income earned from these shows is returned to the investors as dividends minus any costs incurred.

We are yet to sell any cars since our regulatory position. We have sold a Ferrari Mondial which was funded in the same way privately but we are yet to fund and dispose of a car with the new regulated platform as we only launched on 24th October 2020. Once we do, we will of course publish all results.

Thanks

 

[TheCarCrowd]

Hi David,
Another question, your website mentions that you are regulated and offered protection under the FCA. Having checked both the FCA and PRA register, it appears that most protections they offer do not apply to Thecarcrowd - see below. Would you mind clarifying

Thank you

View attachment 79372

Hi, All client money that is posted into an investment wallet is covered under the Financial Services Compensation Scheme FSCS up to £80k. Once the car is fully funded and the money moved into buying actual shares the investment is then backed by the underlying asset and not by the FSCS.

In terms of regulation we are regulated for Arranging deals in investments which covers the way in which we can outline the opportunities for investment and the details we provide for each vehicle. You may have seen the risk warnings on the website and encouraging all investors to do full research prior to investing. Finally we also have an investor test which ensures all aspects of the investment are understood before we can allow anyone to deposit funds. This is different to unregulated businesses who may advertise false returns, publish doctored data on investments and have little or no governance around how they advertise their investment opportunities or who they allow to apply as their aim is just to get as much money into the fund as possible regardless of the individuals understanding.

The protection is mainly from how we are able to advertise and how we vet and test investors to protect them from investing in something they are not qualified to or afford to invest in. So its a pro-active protection if that makes sense. Please let me know if you would like to arrange a zoom call to discuss.