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Speaker 1: Welcome to Fear and Greed, summer investing series brought to

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Speaker 1: you by Vanter, specialists in compliance lead growth. I'm Suan Alma.

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Speaker 1: Classic cars are great to look at, even better I

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Speaker 1: suspect to drive, but they're also growing as an investment class.

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Speaker 1: As always, this is general information only and you should

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Speaker 1: seek independent advice before making investment decisions. Stefan Vonimoff is

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Speaker 1: the co founder of alternative investing community fund alts dot

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Speaker 1: Co alt S dot Co. Stefan, Welcome back to Fear

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Speaker 1: and Greed.

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Speaker 2: Great to be here.

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Speaker 1: Imagine there's a few ways to invest in cars. You

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Speaker 1: could buy a car parking garage, wait for it to appreciate,

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Speaker 1: or perhaps you could buy a share in a classic car.

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Speaker 1: How does it work?

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Speaker 2: Yeah, absolutely, so you can go ahead and buy classic

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Speaker 2: cars yourself at auction. Maybe people do. Collectors often do this,

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Speaker 2: and that's great. The problem with that, though, is that

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Speaker 2: you have to worry now about maintenance, storage, insurance, all

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Speaker 2: the stuff that you know, if you don't have the

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Speaker 2: space for it your and you don't want to get

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Speaker 2: into the insurance weeds and all that, then you know

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Speaker 2: you're probably looking for some better options and so over

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Speaker 2: the past few decades, classic car or automobile funds have emerged,

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Speaker 2: and these funds usually buy a series of high end

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Speaker 2: classic vehicles at auction, hold them, let them appreciate, and

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Speaker 2: let investors credit investors. To be clear, let them buy

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Speaker 2: a slice of the fund and enjoy the appreciation. So

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Speaker 2: we're seeing a lot of that these days.

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Speaker 1: So what sort of constantlight going. I'm gazing edite to

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Speaker 1: Toyota camera.

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Speaker 2: No it's not your it's not your old camera. Unfortunately,

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Speaker 2: it's basically all the high end. So this this market

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Speaker 2: is essentially dominated by the high end, specifically one brand

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Speaker 2: in particular, and that's Ferrari. So Ferrari is the most

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Speaker 2: important brand in this market. Cars in general have been

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Speaker 2: a pretty resilient alternative asset about eleven percent IRR over

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Speaker 2: the past decade, which is not bad at all and

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Speaker 2: pretty good for an alternative investment as well. So it's

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Speaker 2: shown a lot of resilience. But to be clear, Ferraris

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Speaker 2: are what's leading the pack here. So you want to

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Speaker 2: look for you know, Testarossa's GTS, berlin Etta's which is

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Speaker 2: in James Bond's GoldenEye. I mean, the stuff is timeless, right,

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Speaker 2: and the design still holds up.

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Speaker 1: Well.

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Speaker 2: Young people love it, old people love it. So ferraris

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Speaker 2: are really where it's at.

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Speaker 1: Do people drawing these concert are they? Basically the funds

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Speaker 1: just get them looking after them and sure them Mike,

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Speaker 1: sure they keepe running, but don't actually draw them.

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Speaker 2: Well I've never driven one, that's for sure, which is

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Speaker 2: really a shame. Look, I think collectors maybe take them

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Speaker 2: on first spin. Serious investors now they're they're not moved

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Speaker 2: from their storage unit, and they're very tightly you know, controlled.

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Speaker 2: So unfortunately the fund of driving them while you're investing

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Speaker 2: in them is this pretty minimal, you.

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Speaker 1: Said, credited investors, Just explain what that means.

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Speaker 2: So, you know, sophisticated investors, the credit investors, depending on

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Speaker 2: your jurisdiction where you live in the world. You know,

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Speaker 2: most of the funds that have popped up are fall

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Speaker 2: under In the US, they fall under what's known as

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Speaker 2: right Regulation D, which is you have to be a

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Speaker 2: sophisticated or a credit investor in order to invest in

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Speaker 2: these funds. There are exceptions. There are some companies out

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Speaker 2: there that have basically fractionalized these high end vehicles and

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Speaker 2: allow anybody, including non credit investors to invest in them.

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Speaker 2: So you do see this stuff coming up, but generally speaking,

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Speaker 2: this is an asset class that is mostly for a

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Speaker 2: credit investors.

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Speaker 1: The risks stiffen.

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Speaker 2: The risks are that the market, the demand doesn't stay

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Speaker 2: high in the future. I don't personally share that opinion,

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Speaker 2: but one could make an argument that, you know, classic cars,

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Speaker 2: which which by the way, let's not forget most classic

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Speaker 2: cars actually depreciate over time. So there's kind of a

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Speaker 2: weird thing going on where you know, a car is

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Speaker 2: released and for the first twenty thirty years it actually

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Speaker 2: goes down in value, but then something magical happens and

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Speaker 2: the way humans value these old vehicles, it actually starts

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Speaker 2: going up again. So the cars you're going to want

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Speaker 2: to look at in this market are from like the

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Speaker 2: eighties and nineties, if not earlier. And this again, especially

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Speaker 2: like ferraris enough time has passed now these are considered

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Speaker 2: classics and the risk is lower. I would say that,

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Speaker 2: you know, in terms of the risk, it's that it's

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Speaker 2: two things. It's number one, that the overall demand for

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Speaker 2: classic cars doesn't keep up like it has for the

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Speaker 2: past ten, fifteen, twenty years. Maybe people lose their love

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Speaker 2: for cars because of all the autonomous vehicles coming online,

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Speaker 2: or you know, any other reason that's that's probably the

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Speaker 2: biggest risk frankly, which isn't that big of a risk

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Speaker 2: in my opinion. The other risk, again is just valuation.

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Speaker 2: You want to make sure that you're buying something that

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Speaker 2: a will definitely give gives you room to appreciate and

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Speaker 2: be you know, there's not going to be you know,

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Speaker 2: a ton of them in the market that just you know,

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Speaker 2: pop up suddenly. So if you're buying rare, classic, beautiful

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Speaker 2: vehicles and excellent condition and you're ready for a long

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Speaker 2: term hold, you know, five ten years plus that kind

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Speaker 2: of area, it's a good alternat investment.

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Speaker 1: Stefan, thanks for your time. Thank you. That was Stefan

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Speaker 1: von Imoff from Alternative Investing community fund ALTS dot Co.

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Speaker 1: Remember to get your own independent advice before making decisions.

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Speaker 1: This is for in Greed's Summer Investing series, brought to

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Speaker 1: you by Vanta. Vanta automates compliance for frameworks like ISO

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Speaker 1: dot com, slash fear and greed. I'm Sean Elmer, enjoying

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Speaker 1: your day.