Jeremy Clarkson: forget Isas. Classic cars are the best investment
Supercars and classics thought you would like to read a recent article by Jeremy Clarkson in The Sunday Times, August 5 2018, 12:01am
I recently had to spend a couple of hours with my accountant and various other men in suits who talked and talked and then talked some more about stuff I never want to understand. I genuinely believe that there is nothing on God’s green earth quite so depressing and uninteresting as a pension.
Except maybe an Isa. I literally have no idea what one is. Or a Pep. As far as I can work out, you give your money to a man who spends some of it on rubber plants for his swish office in the City of London and then gives you a piece of paper that sits in a file, in a cupboard under the stairs, until you are dead, when it becomes a complicated nuisance for your children. Frankly, I’d rather spend my money on dogs.
We are told that these financial things are important for minimising your tax bill, but I find this sort of behaviour a bit sinister. I mean, people who move to a country where the income tax is lower have made a decision to spend their lives far from their families and their friends and everything they hold dear simply so they can have a bit more money to spend on drinks at the golf club.
That’s idiotic. And mean. I think I despise tax exiles, and if I had a flame-thrower, I’d use it on all of them.
The other problem I have with various investment and savings schemes is that, when all is said and done, you are giving your money to someone who then plays with it on the stock exchange. If he wins, he buys a better suit and you get another piece of paper to annoy your children when you’re dead. If he loses , you lose.
I like to play blackjack and I’m quite good at it. But if I took your money to a casino with the promise that I’d give you some of the winnings if I won and nothing at all if I lost, you’d invite me to eff off.
I’m obviously not alone in these views, because in recent years quite a few people have been investing in wine. In February this year 12 bottles of 1988 Romanée-Conti wine — I think it’s a red — sold at auction for just shy of £180,000. That’s about £400 a sip.
But there’s the rub. If you buy wine as an investment, you obviously can’t drink it. And having wine in a cupboard under the stairs and not drinking it is even more stupid than having a piece of paper with some numbers on it.
When the world went into free fall in 2008 I panicked and bought a lot of gold.
Financially this turned out to be a shrewd move, but owning an ingot is pointless. It’s not as though you can wear it as jewellery. Unless, of course, you’re a tax exile in Monaco. I bet they would there. “Ooh, look at Eduardo. He’s built his whole boat out of ingots.”
Hopefully, you can see where I’m heading with all this. Yup, classic cars. I think we are all aware that they have gone up in value in recent years, but I’m not sure most people realise just how enormous the leap has been.
I have a friend who bought a Ferrari 250 GTO in the early Seventies for £9,000. Last month it was reported that a similar car had been sold for $70m (£52m).
And, unlike wine and gold ingots and bits of paper with numbers on them, his investment can be used. He races it, takes it on tours of Europe and lets small boys sit in it at events. And here’s the amazing bit. If he were to sell it, there would be no tax to pay at all. It’d be a clear and straight profit of more than $69.9m.
There are people out there who paid hundreds of pounds in the Seventies for a leaky, overheating Jaguar E-type that’s now worth a million or more. Ten years ago I turned down a Ferrari 275 GTS because I thought the £80,000 asking price was a bit steep. Now that car would be worth well over a million pounds as well.
It’s said that a car can only be a classic if it is two of the following things: rare, interesting or beautiful. But these days anything that’s old is hitting the spot. You see Ford Sierra Cosworths on the market for £70,000. And remember the BMW 3.0 CSL? I once sold one for £3,000. Today it’d be worth £150,000 easily.
Happily, there are still classics out there that I believe have not yet realised their true potential. I don’t want to brag, but only the other day I bought a one-owner Alfa Romeo GTV6 with 26,000 miles on the clock for £10,000. And unless Donald Trump and Vladimir Putin do something stupid, or a halfwit at a bank pushes the wrong button by mistake, that’s going to be worth four times more in a year or so.
If you think it’d be too risky to park your money where no one else has yet dared to go — the Lancia Montecarlo, for example — don’t worry, because you can eliminate the risk altogether and buy new.
Car makers have started making limited-edition runs of mainstream models that they can sell at inflated prices.
Good for them. And good for you too, because if you can get your foot through the door, you can sell your new car immediately for up to twice what you paid for it. And remember: you’re not avoiding tax here, or evading it, because cars are exempt from capital gains tax. It’s simply not an issue at all.
Ferrari, for example, will sell an ordinary Joe a 488 GTB for almost £200,000. But a select few customers were able to buy the limited-edition 488 Pista for just over £250,000. Ferrari does its best to make sure these cars end up with enthusiasts by saying that if the vehicle is sold immediately, the customer’s name will be put in a vat of fire.
But no matter how strong the petrol force is in your veins, it’s hard to resist turning your £250,000 car into a £250,000 profit overnight.
And then there’s Porsche. It recently introduced the 911 GT2 RS, which is a two-wheel-drive, lightweight, limited-edition version of the Turbo S. If you’d been able to buy one — you can’t now, because they’re all sold — it would have cost you £207, 506. Or more like £235,000 if you’d fitted it with a few extras. Such as silver-grey seat belts for £194.However, I see online that the current asking price for a used GT2 RS is £450,000. Which means someone has made more than £215,000 tax-free for simply getting their name on a list.
And here’s the punchline. They will have done a few hundred miles in their investment and enjoyed every single one of them, because the GT2 RS is a properly brilliant sports car. And this from a man who’s never been a Porsche fan. I truly loved it. Everything about it.
You can’t say that about the piece of paper in a file under your stairs.