In the auction houses the prices of Broughs, MV Agustas, Vincents and other established desirable classic motorcycles are all achieving record prices. And some these machines have either required a lot of very expensive work, or are not as original as they should be at any price. Why?
Quite simply there is a lot of people in their sixties, seventies and eighties, who grew up with these machines, who can afford them and know that they are great investments. The banking laws are changing and when the banks next threaten to collapse, instead of bail-outs, we will be experiencing bail-ins. If you want to know what a bail-in is, then ruminate on what was done with savers deposits when the banks got into trouble there. Therefore, there is an awful lot of money lying in banks, looking for a home. But the demographics for this market, due to the age of the investors, does not look so good.
Why would anyone want to invest in a classic motorcycle? Three reasons. Great returns, fun and all profits are tax-free (see the letter from HM Revenue and Customs confirming this https://themotorcyclebroker.co.uk/letter-from-hm-revenue-and-customs-confirming-tax-free-status-of-classic-motorcycles/ ).
If you wanted to invest for your grand children in 1985 and bought the Vincent Egli I was offered then at £5,000. Today, you would sell that machine for about £60,000 and pay no tax. It may not be as great a return as property, but it’s still not bad, great fun and a great way to diversify.
So there are now too many people chasing too few of these fine machines and so prices are rising quite viciously. Like great art, the best examples remain in very strong hands and so the market is mostly full of machines that are of a lower investment quality. Anything with great pedigree, or which is a fine example, will have so many buyers chasing it that it will raise an incredibly strong sale price. Many of the finest machines are now being sold by motorcycle brokers and even word of mouth and never make it to auction.
So while the ageing population chase such high value machines and outbid one another, what is he shrewd investor to do? Look at the emerging market classic motorcycles, because value can be found everywhere. The demography of such buyers has a far healthier long term outlook, they are baby boomers. People in their thirties, forties and fifties and there are a lot of them. The machines they grew up with are so undervalued. Motorcycles that cost £24,000 to buy and restore (without the cost of restoration labour) can be picked up in immaculate condition for £12 and £13,000. Others that cost £5,000 to buy and restore (without the cost of restoration labour) can be picked up in immaculate condition for £2,500 to £3750. Bear in mind, that as soon as the motorcycle appreciates in value, so too does the cost of spares.
Some investors, and astute motorcyclists who grew up with such machines, are waking up to this and values have risen quite dramatically in the last two years. The USA has exported most of its stock of investment grade machines and only the trashy restoration projects remain.
We are now at the point where the emerging market classic motorcycles will take off and it is time to buy them while you still can. If you would like to know more about emerging market classic motorcycles, then call The Motorcycle Broker for a no pressure chat, or visit the website at www.themotorcyclebroker.co.uk
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[…] In the auction houses the prices of Broughs, MV Agustas, Vincents and other established desirable classic motorcycles are all achieving record prices. And some these machines have either required a lot of very expensive work, or are not as original a… […]