Historic Race Cars as an Investment

[soloracer]

I just got back from the Rolex Monterey Historic Races at Laguna Seca. The event was terrific as usual, mainly due to the access the spectators get to the cars and the race teams. You can literally walk through the pits, talk to the racers and look at the cars. I even managed to get some hot laps around the track in a new Jaguar XJS-R driven by Davey Jones - who won LeMans back in the 90's for Porsche.

One of the interesting conversations I had was with the owner of the orange Jagermeister RSR race car that was campaigned in Europe in the 70's by the son of the founder of Jagermeister. The current owner purchased the car in the early 80's and has been racing it ever since. He is now around 70 years of age and told me that the original team wants to buy the car back from him. Out of curiosity I looked up what an RSR with race heritage is worth today - approx $500,000.

Which got me wondering what he paid for it back in 1980 and how good of an investment it was. Which would be more fun, putting money in the markets or racing for 30 years?

What cars do you think one could purchase today for $100,000 that might make good candidates for vintage racing in the future? One that comes to mind is RE Amemiya's Super GT 300 RX7. Surely it will be a collector.

Thoughts?

[AllGoNoShow]

Did you ask him how much he spent in the last 30 years? :D

To answer your question... the way I look at it is putting some money in the markets can do one of three things..

1. Lose it all
2. Break even and get out
3. Make some money, sometimes lots, sometimes a little.

At least buying the race car and racing it for 30 years gives you some solid entertainment and something enjoyable to do, as long as you don't run out of money keeping the race car/team and you alive. There is a good chance it is going to be a huge money pit and not give you a great return, if any, in the long run especially a rotary :eek: :burnout: haha jk jk

There is enjoyment to making money or trying in the market, messing around, but imagine one day you have tens or hundreds of thousands (or millions if your good) tied up and you loose it all before you wake up, what a shitty window jumping day that might turn into. Mind you if you made that much you are probably smart enough to set it up so you don't lose it all one night and you could just go buy your same race car 5 years later (slightly inflated if you are hoping for an investment car of course) and only have it for 25 years to race while having your market money fund you with no issues, if you are good :)

Which would be more fun? Racing for sure, at least for myself at this point in time but things can change and maybe you run into more cash later on that you can fiddle in the market with and lose without worry :dunno:

[Team_Mclaren]

Originally posted by soloracer
RE Amemiya's Super GT 300 RX7. Surely it will be a collector.

Thoughts?

iirc that car is now in a musume in malaysia.

[AllGoNoShow]

rU9mQ7z5JVQ

This would be on the list :drool:

[ekguy]

that thing is nuts. the sound is like someone opened the gates of hell haha.

[M.alex]

Years ago I looked into starting a car hedge fund, it just didn't make any sense.

Using your example, that's about 8%/yr compounded, assuming a buy-in cost of 50k.

That's not too shabby, until you factor in

- cost to run
- cost to rebuild/maintenance
- cost to insure
- cost to store

Even if you don't drive it and just park it in your garage, ignoring security aspects and other stuff, you still have insurance costs, so I think the highest return you can hope for, just leaving it sitting there, is 6 1/2%. And that's assuming you picked a winner that does appreciate in the end.

[xxviet]

Originally posted by ekguy
that thing is nuts. the sound is like someone opened the gates of hell haha.

^^ this clearly says it all :clap:

[J-hop]

I think the issue is also, what is 100k going to get you? Table scraps and crash victims after the hardcore collectors have taken their turn maybe..

It an interesting idea but with a limited budget you probably won't get far unless you gamble on some amatures or damaged vehicles

[soloracer]

Originally posted by J-hop
I think the issue is also, what is 100k going to get you? Table scraps and crash victims after the hardcore collectors have taken their turn maybe..

It an interesting idea but with a limited budget you probably won't get far unless you gamble on some amatures or damaged vehicles

Not necessarily. For example, a Porsche Cup Car can be bought for under $100K. When the Flying Lizard team is done with their cars what would they go for? And that is a newer (2000-2005) race car. No doubt you won't be looking at a LeMans winning prototype but there are cars out there in that price range. Remember that to most race teams an old car is a liability - not an asset. You realize this when you see Derek Bell kicking the tires on Porsche 917 number 20 and say it's just an old car. Pro racers want the newest and best so that they can stay competitive. An old race car that isn't competitive any more just isn't that desireable to them.

[se7en]

buy that sweet bee*r drag silvia....

[M.alex]

Originally posted by soloracer


Not necessarily. For example, a Porsche Cup Car can be bought for under $100K. When the Flying Lizard team is done with their cars what would they go for? And that is a newer (2000-2005) race car. No doubt you won't be looking at a LeMans winning prototype but there are cars out there in that price range. Remember that to most race teams an old car is a liability - not an asset. You realize this when you see Derek Bell kicking the tires on Porsche 917 number 20 and say it's just an old car. Pro racers want the newest and best so that they can stay competitive. An old race car that isn't competitive any more just isn't that desireable to them.

So maybe they'll sell you the 917 for $100k because it's just an old car :rofl: :rofl: :rofl:

[soloracer]

Originally posted by M.alex


So maybe they'll sell you the 917 for $100k because it's just an old car :rofl: :rofl: :rofl:

Back in the late 70's you might have been able to pick one up for that price. Today it will cost over $1 million depending upon the racing heritage of that exact car. It's too late for a 917 as it has already reached "collector" status.

The point I am making is that the pro teams are only interested in one thing - winning races and that usually requires the latest and greatest cars. The trick is finding a car from the 90's that would be a good candidate to purchase.

For example, in Super GT there was a Porsche 968 that raced in the GT300 class - it was mostly a tube frame car and a Porsche 968 in name only. When it was retired I inquired to the owners about it and could have bought it at that time for $100,000 lock, stock and barrell with some spares. The cars are out there, the challenge is finding one that make sense.

[Kardon]

Originally posted by AllGoNoShow
rU9mQ7z5JVQ

This would be on the list :drool:

0:30 -> 0:35
eargasm

[soloracer]

Here is the 968 I was talking about:

http://forums.beyond.ca/showthread/t-54134.html

Another one might be one of the 4 original 968 Turbo RS cars that Porsche built. Like this one here:

http://www.springbok.de/galerie/details.php?id=968trs&ref=32

These cars raced at LeMans and I believe that Jason at Paragon Products bought his for around $60k.

[M.alex]

I dunno - once you factor in all the carrying costs as well as the risk that the car you buy may turn out to be a complete dud (i.e., 0 market appeal) I just don't think it's that great an idea if you're trying to look at it like an investment.

If you take like a 917 vs that 968, the 917 is iconic and unique in all circles. That 968 is, well, I dunno - it may be iconic in some circles but not all, which will limit market appeal

[J-hop]

Originally posted by soloracer
Here is the 968 I was talking about:

http://forums.beyond.ca/showthread/t-54134.html

Another one might be one of the 4 original 968 Turbo RS cars that Porsche built. Like this one here:

http://www.springbok.de/galerie/details.php?id=968trs&ref=32

These cars raced at LeMans and I believe that Jason at Paragon Products bought his for around $60k.

So what do you envision this being worth in say 20 years?

It will cost you probably at least 1000/year to store it in a temp controlled unit so it doesn't go to shit freeze thawing for 20 years so now you are at 80k invested. Now you are also going to want insurance on it for fire and theft so that would be I don know 500/year maybe? I have no clue. But let's use that number as an example so that's another 10k so you are looking at 90k invested. Add in say 1k for miscellaneous expenses so now you've invested 91k for a car that 20 years from now may be worth 100k??

So in 20 years you've made 9k. Correct me if I'm wrong but I don't see the invest investment opportunity here, that is the equivalent of working about 1 hour a week at mcdonalds for 20 years.

Or do you expect 20 years from now something like that would be worth a few hundred thousand? I personally don't and even if 20 years from now it was worth 200k that would still be a pretty shitty investment.

[Maxt]

The problem with the 968 is , it wasn't a crowd or podium favourite. The RE amemiya car on the other hand, even in America was an iconic car.
I think the idea has merit, but it has to be a car that is a model famous for a race series, racer , or limited run or a built by a dying company.
Trans am Barracuda didn't win shit, but its a rare car, the 968 porsche linked was never that competitive, or famous, but wasnt a rare car in stock form either.
Cars i would look at now, Arta or Dome NSX, Esso supra, Speedsource rx8, I think a porsche 911 cup car would be worth something in the future, as attrition through racing would no doubt limit its numbers, along with Viper ACR.
Weirdly enough almost anything older than 1980 thats a chrysler product is already starting to go for stupid money.. People are asking 11k for Cordoba's that you couldn't pay someone to take in 1990...
http://www.autotraderclassics.com/classic-car/1976-Chrysler-Cordoba-442692.xhtml?conversationId=511717. A guy local to me has one for sale that is all together, with 3 flat tires, asking price 9k. That heap probably sold for 150.00 8-10 years ago, but he is apparently getting a lot of calls on it.
The book value on a 77 Ramcharger I had in highschool was 400.00... It got written off for a dent in the door, now guys want 20k+ for a stock condition truck..
Sometimes its not the most exotic stuff that earns the dough I guess, and some of this stuff was just stored in the back yard for 20 years..