Building Wealth on Wheels

Now, you might be wondering, "Can you really build wealth owning a car?" The answer is yes, but not every car is investable. For example your Nissan Juke might serve its purpose for practicality, economy and for its god awake looks, but is extremely unlikely to appreciate over time, or your Tesla Model 3, might be ‘protecting the plant’ and your sustainable tax write off, but is also not likely to appreciate in value. 

On the other hand, collectible cars have several key characteristics that make them an attractive investment opportunity. Let's take a closer look at what these characteristics are and how they can help you build wealth on wheels.

Tax Free

One of the most attractive features of investing in collectible cars in the UK is that all gains are tax-free. Unlike many other types of investments, such as stocks, bonds, and property, you do not have to pay capital gains tax on any increase in value. This is because collectible cars are classified as "wasting assets" by HMRC, and are exempt from capital gains tax when they are sold.

Liquidity 

Collectible cars also offer high liquidity. While some investments, such as property, can take months or even years to sell, collectible cars can be sold relatively quickly. If you need to liquidate your investment quickly, you can typically sell your car within 7 days. This means that you can access your funds faster than with many other types of investments.

Diversification 

Collectible cars offer significant diversification benefits compared to global equity and bond markets. By investing in cars, you are diversifying your portfolio across asset classes, which can help mitigate risk. This means that if one part of your investment portfolio is not performing well, you still have other assets that may be doing better. Collectible cars also offer diversification benefits within the collectibles asset class, as different types of collectible cars may perform differently in different market conditions.

Preservation 

As new cars become more and more expensive driven by inflationary pressures, it has a natural drag on the valuation of cars in the used market, as these cars are now offered at more attractive valuations. In addition, many collectors and enthusiasts value these cars for their unique features, design, and craftsmanship that do not feature on newer models, which further adds to their desirability and potential for appreciation.

Scarcity 

Collectible cars are by definition are scarce or rare. They are often limited editions or models that were only produced for a short period of time. This makes them highly sought after by collectors and enthusiasts, which can drive up their value.

Enjoyment 

Finally, investing in collectible cars offers the pride and pleasure of owning a piece of automotive history. Collectible cars often have a rich and fascinating history, and can be enjoyed as works of art, as well as functional vehicles. This can provide a sense of pride and pleasure that other types of investments may not offer. Personally one of favourite things is sifting through a cars history and learning about its life and interesting characters which have owned the car previously. In addition, owning a collectible car can be a great way to connect with other enthusiasts and build a community around a shared passion.

Investing in collectible cars is an attractive investment opportunity that offers tax-free gains, high liquidity, diversification benefits, potential appreciation, and the enjoyment of owning a piece of automotive history. While not every car is investable, there are many collectible cars that offer these benefits and can help you build wealth on wheels. So, consider adding a collectible car to your investment portfolio and start compounding your wealth on wheels today.