Stock take: investing in a modern classic

As a combination of post-lockdown demand and unspent savings sends the prices of modern classics skywards, an investment platform has emerged that makes the possibility of owning and benefiting from the most desirable cars a reality for people who are unable to afford an entire vehicle.

Launched in October last year, The Car Crowd is about to bring its fifth car, a Ford Sierra RS Cosworth 3dr, to market. The company is offering 1000 shares in it to investors at £59 each, giving the 1980s icon a market valuation of £59,000.

The two-owner Ford, which was registered in 1986 and has done only 40,000 miles, is in original but immaculate condition. With the help of an expert in the model, The Car Crowd viewed 16 examples before deciding to buy the car, for which it paid £55,000. To this figure it has added a curation charge of £4000 to cover inspection, provenance checking and valeting expenses plus an operating margin.

The resulting offer price of £59,000 compares favourably with a guide valuation from classic car insurer Hagerty of £63,400 for a 1986-registered Sierra RS Cosworth 3dr in excellent condition. The Car Crowd claims its example falls midway between this and concours condition, for which Hagerty quotes a guide value of £98,000.

The Car Crowd is regulated and authorised by the Financial Conduct Authority and claims to be the first to bring what it calls fractional ownership to the UK classic car market, its aim being to enable people who are unable to afford the high prices of modern classics to have shares in them instead.

The downside is that the cars may not be driven by shareholders. Instead, they are safely stored and serviced each year – although shareholders can arrange to see their cars when they wish, and there are plans for displaying at shows.

The company was founded by David Spickett, a UK financial services expert and car enthusiast (aged 14, he helped his father build a Westfield), after he became aware of Rally Rd, the pioneer of fractional classic ownership, while working in the US.

This American company was launched in 2018 and now has 50 vehicles on its books, including a 1955 Porsche 956 Speedster, a 1977 Lotus Esprit S1 and a 2005 Ford GT. The average share price is £73, and it claims that the return over 12 months, from the initial offer price to sale, is around 15%.

“Investors are generally aged between 20 and 30,” said Rally Rd co-founder Chris Bruno. “They’re people who haven’t invested before and like special cars but don’t have the money to buy one.

“It’s all very well for people to say enjoying a classic car is all about the pleasure of owning and driving it, but not everyone can afford to. Now, thanks to Rally Rd, they and thousands of people like them can own shares in one instead.