Has anyone here bought a vehicle as a Superannuation investment?

[Bonn]

Hi all,
We (self/Mrs) started self-managing our super (SMSF) after the 2008/09 GFC.
Turned it into a deposit on a flat - so far, so good.
Been thinking of throwing a lazy $10k at a (relatively) cool oldish ('80s?) car/bike, not too flash, and wondered if anyone's done this?
Looking at the ATO rules, it comes across as a pretty s#itty deal:

1) can't drive/ride it EVEN FOR MAINTENANCE! (FFS)
2) can't display it
3) can't keep it at home (or business of a 'related party')
(Sounds like the ATO aren't keen on anyone wanting to do it)

Keen to hear if anyone here has donevit, or knows of it being done???

[mike_nofx]

So what’s the point of it then? A car you can’t drive or properly maintain, that’s ‘not too flash’ so unlikely to increase in value.

[EFFalcon]

because if they made it appealing, dumb people would be too tempted to drop it on a car that will end up depreciating

[FTe342]

The right vehicle doesn't need to be inside a super fund to be a good investment and yield a good return on sale

[Citroënbender]

I can just see way too many hurdles to viability; ideal and compliant storage, insurance, liquidation on-costs (eg, auction fees).

Even with your strata investment, make sure management is 110% on the ball or that can totally lunch you, too.

FTe is on point IMO, if you horse-trade or speculate independently of the fund you can then top it up with the gain.

[mcnews]

The fella that owns my old E49 Charger, along with just about every model of GT and Monaro, has all of them in his self managed super scheme. Along with a heap of V8 Supercars, F1 driver helmets, a massive signed rock star guitar selection etc. etc.

[Bonn]

Originally Posted by mcnews

The fella that owns my old E49 Charger, along with just about every model of GT and Monaro, has all of them in his self managed super scheme. Along with a heap of V8 Supercars, F1 driver helmets, a massive signed rock star guitar selection etc. etc.

Sounds like some good, high-gain stuff - not as volatile as mining shares, which a lot of big, trad funds gamble on (with your dough). Cheers.

[73 4V XB]

Originally Posted by Bonn

Hi all,
We (self/Mrs) started self-managing our super (SMSF) after the 2008/09 GFC.
Turned it into a deposit on a flat - so far, so good.
Been thinking of throwing a lazy $10k at a (relatively) cool oldish ('80s?) car/bike, not too flash, and wondered if anyone's done this?
Looking at the ATO rules, it comes across as a pretty s#itty deal:

1) can't drive/ride it EVEN FOR MAINTENANCE! (FFS)
2) can't display it
3) can't keep it at home (or business of a 'related party')
(Sounds like the ATO aren't keen on anyone wanting to do it)

Keen to hear if anyone here has donevit, or knows of it being done???

I bought a car 10 years ago, It was always a investment, always intended for part of my super. No I can’t claim anything on it but I can enjoy it for what it is, I get a fair bit of enjoyment, and when I’m ready to retire it will go a long way to supporting me in retirement.

[Citroënbender]

The "good" car orphans are all mopped up.

Within the last five years the price of Ferrari 400i models in any condition went bezerk - I utterly regret not going into debt for one at $40K. Guzzi Larios have lurched upwards based on age, pedigree, rarity. Citroën Chapron replicas are close to market saturation in all grades of fidelity. Where are the $1200 XJ-S now, or the $2K P38? Knuckle, shovel, panheads are all priced up there.

[Bonn]

Originally Posted by Citroënbender

The "good" car orphans are all mopped up.

Within the last five years the price of Ferrari 400i models in any condition went bezerk - I utterly regret not going into debt for one at $40K. Guzzi Larios have lurched upwards based on age, pedigree, rarity. Citroën Chapron replicas are close to market saturation in all grades of fidelity. Where are the $1200 XJ-S now, or the $2K P38? Knuckle, shovel, panheads are all priced up there.

Too right - y'd almost get a 42WLA free with a baked dinner, in '81/'82 -
750 Bonnies were $2000 at the most...and Commandos
Valiants are still cheap!!

[cheap]

It might work if you're in a SMSF, but there would be a few hurdles to jump:

1) arms length transaction (can't buy it off yourself)

2) yearly indépendant audits (this one will be tricky) as values are rather subjective, highly dependant upon demand and rarity. But if you've got enough dollars to invest in a McLaren F1 this criteria is probably met

3) factor in secure storage costs, the expense of yearly maintenance/servicing

4) the big one, I doubt you'll be able to drive the car whilst it is one the Superannuation balance sheet

You'd best talk your fund manager. IMO, you'd be better off investing in traditional A-Grade equities, real-estate, precious metals.

[aussiblue]

As the say http://discoversuper.com.au/classic-car-smsf/:

In addition to the regular investment rules, it falls under the “Collectables and personal use assets rules” which places additional restrictions on the investment.

These include:

The car must NOT be leased to any related party of the SMSF
It must NOT be stored or displayed in the private residence of any related party of the SMSF (although it can be stored, but not displayed, in business premises)
the trustees must record in writing the reasons for the decision on where to store the car, and keep that record for 10 years.
the trustees must ensure the asset is insured in the name of the fund within 7 days of acquisition
the classic car can not used by any related party of the SMSF.
If the Classic Car is Sold or Transferred from the SMSF to a related party of fund, it must be done at a market price determined by a qualified independent valuer.
Arguably, the most important of the above to consider is that the Classic Car can not used by any related party any time. In no circumstances can it be driven by a related party, not even for maintenance purposes, to show for sale purposes or to have restoration work done. However, a person who is not a related party could drive the vehicle for such a purpose.

[hayseed]

My Wife & I have had a SMSF for quite few years Now. & I have a Few Toys as well.
We have discussed with our Adviser about this. he told us the main reason the ATO brought in the no personal use Rule was; far too many Blokes were using their super as a Piggy bank for their Toys instead of a fund for their retirement..

To the OP; If you want to do It. Get your SMSF fund to buy an industrial unit & start filling It with stuff you'll think will appreciate (Like the Bloke mcnews mentions) sit on It all 'til your 65 then cash It all in... At least that's how our adviser explained It to us..

[asagaai]

Originally Posted by hayseed

To the OP; If you want to do It. Get your SMSF fund to buy an industrial unit & start filling It with stuff you'll think will appreciate (Like the Bloke mcnews mentions) sit on It all 'til your 65 then cash It all in... At least that's how our adviser explained It to us..

Yes- the problem with this model is:

1. Lost rent of unit that would have been attained if leasing out to third arms length party over the years when storing vehicles/toys.

2. Lost investment opportunity of investing money sunk into cars and maintenance instead of investing in property/blue chip shares/debentures/cash etc.

You would need to buy very very well to have the capital gains in cars to offset these other losses.

If you do not care about growth in your fund as a priority, but are more focused on being a collector of nice things like E49s, etc- well that is another matter and this model may work.

[Bonn]

Maybe if you could partition off half of the industrial property, gouge rent off tenants and secure the other half?

[MITCHAY]

Well SMSF are not intended to be a free for all. Otherwise you could just use super to purchase whatever car you wanted.

I could buy a pretty decent car with what I hold in a fund but otherwise could not afford it

[Bonn]

It's free, regarding what you invest in.

[pottery beige]

i would never buy one as an investment

i buy them for full scale biante model dust collectors

[Captain Stubing]

Hyundai currently have a limited edition Kona Iron Man available. My missus works at a Hyundai dealership, and tells me there are 300 in Australia.

Buy one or two, wrap em up, and sit back and wait.

[Bonn]

Thanks everyone, appreciate the wisdom.
Probably not going to work for us, unless we stumble across a good spot to do a bit of hoarding, out at Dubbo (like Old Mate, on the news) - even then, fluids go off, tyres go flat, bearings fuc# up and die, fuel goes stale (and chrystalises into shallack), seals dry out and perish....
Still, could be a goer.
btw the above-mentioned 'not too flash' car is a low km XJS Jag with no rust! (I know, right)
.....lead us not into temptation........
try not to think about it, Bonn....

[mike_nofx]

Originally Posted by Swanny

Hyundai currently have a limited edition Kona Iron Man available. My missus works at a Hyundai dealership, and tells me there are 300 in Australia.

Buy one or two, wrap em up, and sit back and wait.

I can’t actually tell if you’re being sarcastic or not.

[ute83]

I think the first word should have given it away.

[Peuty]

Originally Posted by cheap

It might work if you're in a SMSF, but there would be a few hurdles to jump:

1) arms length transaction (can't buy it off yourself)

2) yearly indépendant audits (this one will be tricky) as values are rather subjective, highly dependant upon demand and rarity. But if you've got enough dollars to invest in a McLaren F1 this criteria is probably met

3) factor in secure storage costs, the expense of yearly maintenance/servicing

4) the big one, I doubt you'll be able to drive the car whilst it is one the Superannuation balance sheet

You'd best talk your fund manager. IMO, you'd be better off investing in traditional A-Grade equities, real-estate, precious metals.

Best advice in this thread.

Sole purpose test is another issue for you as well.

[GT1533]

I really can’t see the point. The major benefit of a superannuation fund is lower tax applying to income and profits (15%). Keep it outside super and don’t declare it as income when sold (assuming there is a profit). Then there is zero tax. Am I missing something?

[Bonn]

Originally Posted by GT1533

I really can’t see the point. The major benefit of a superannuation fund is lower tax applying to income and profits (15%). Keep it outside super and don’t declare it as income when sold (assuming there is a profit). Then there is zero tax. Am I missing something?

Super regularly drops into sn account and sits there, so it's an option to grow it, where non-super dough might be a bit tight for extra toys.

[Citroënbender]

Can’t have too much super. Also never hurts to get multiple opinions on how you’re tracking - and ways to achieve funding milestones - from informed people.

I deal 24/7 with the outcome of family ignoring these aspects, whilst also trying to work trades part-time. Put simply, it’s unrelentingly rubbish.