Alternative Investments: Classic and vintage motorcycles
Tangible assets have really taken off in the West since the great banking crisis of 2007/8 – writes Paul Jayson – The Motorcycle Broker.
Who would have thought of investing in wrist watches, fine wine, whiskey or even cars back in the 1970s.
However, art has a great investment history going back centuries, there has always been speculation around it. It’s proved to be a robust investment for those who understand the market and that is really the crux of any investment, understanding the market.
The same is true of property, back in the 1960s many people became tax exiles by buying up old properties and renting them out until the area had improved enough to book a profit by selling.
Classic cars have proved themselves to be a great investment to those who really understand them, but a black hole into which the owner throws money for those who don’t.
Since around 2018, when the FT’s How to Spend it did a very interesting article about classic motorcycle investment, the bikes have been offering great profits.
If they didn’t have a Fizzy, those teenagers knew that they’d die a virgin
Those people born in the 1960s all started life on a Yamaha FS1E at 16. If they didn’t have a Fizzy, those teenagers knew that they’d die a virgin.
Car insurance was way too expensive for young drivers until they reached the age of 21. When kids could buy a reliable Japanese motorcycle that would get them to work every day, motorcycling was cost effective transport for the 1970s youth.
The advent of HP, paying for your motorcycle by instalments, meant that life on two wheels was a necessity for most working kids aged 16 to 21 in the 1970s.
I don’t want to get all “Jumpers for goal posts” and teary eyed, but in retrospect, people in their 50s and 60s today look back at those days with powerful nostalgic glee.
China will revolutionise the motorcycle investment market
The motorcycle represented freedom, rebellion and the possibility of a quick grope, or maybe more, outside the village hall disco. Everyone could be a rebel, Elvis Presley rode a motorcycle and he was damn cool and alive for an awful lot of the 1970s.
The MCIA (motorcycle industry association) only started keeping sales figures for motorcycles from 1975 onwards.
In the UK, a comparably very small market, between 1975 and 1983 we sold 225,000-315,000 new motorcycles every year. That equates to about 1,000,000 new and used motorcycles every year.
This was not just in the UK, it was a global phenomenon. It happened because Japanese motorcycles had arrived and were reliable transport, car insurance was so expensive for under 21s and the arrival of HP.
Indeed, by 1994 Britain was only selling around 55,000 new motorcycles a year because motorcycling became more difficult to access due to new legislation in 1983.
Those fifty and sixty somethings who grew up in those halcyon days when Barry Sheene and mullets ruled, now want the motorcycles of their youth.
Their kids have left home, they have made great profits from classic cars and they want the freedom of two wheels again.
They have an understanding of the market, because they’ve seen the capital growth of E-Type Jaguars and Datsun 240s.
They suddenly realise that the motorcycles take up less room than cars and offer full access to a global market because there is no left or right hand drive.
motorcycles offer far more scope for future profits because it is a less mature market
The motorcycles offer far more scope for future profits because it is a less mature market, so there’s plenty of headroom.
However, at the top end of the motorcycle market (what you would consider the Ferrari GTO equivalent, or Alfa Romeo 8C) there has already been movement.
In 2010 you could buy an MV Agusta 750 Sport for a meagre £30,000 and today you will pay around £130,000 for an investment grade, authenticated example.
This particular motorcycle has pretty much half an Alfa 8C in it and 37 world championships to its name, so there’s plenty of headroom considering that the last Alfa 8C to sell sold for US$20,000,000.
Entry to the market starts at around the £20,000 mark, but Picassos do not sell on eBay.
Buyer beware! Only investment grade examples make the profits investors are seeking.
Only investment grade examples make the profits investors are seeking
If you buy a motorcycle that is not investment grade and palm it off as being correct, it costs £50,000 to defend a mis-description court case.
Also if the motorcycle has not been set up correctly, which most have not, then they can become a money pit and the AA man will get to know you by your first name.
But, like I said, these were the days of reliable motorcycles. At The Motorcycle Broker, we find the 8% which are investment grade pieces for our clients, we study the market- knowing what to buy.
We set them up correctly and even re-sell them for you into the global market. We even offer a one year, unlimited mileage, no quibble warranty- that’s how confident we are in our knowledge of the bikes.
It is vital to only buy investment grade examples of the correct motorcycle to ensure that your motorcycle really is an investment.
One of the great things about this type of investment is that it’s completely tax-free; there’s no CGT and no income tax.
Also China, the largest motorcycle market on the planet at 20,000,000 is now allowed to import motorcycles for the first time since 1997.
They have a hunger for the collectibles market and they certainly love motorcycles. It’s clear that China will revolutionise the motorcycle investment market, just the way it’s revolutionised the art, wrist watch and fine wine market.
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