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Posted by Joseph Clement on 21 July, 2017

Most people think that investing in supercars is risky.

However, Mark Zuckerberg enlightened us a while ago when he advised us that “The biggest risk is not taking any risk… In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

All investments carry some degree of risk.

The best thing you can do is be smart about what you are choosing to invest in. By doing this you will hopefully minimise risk and ultimately make a good return on your investment over time.

Still not convinced? Take a look at these 3 signs that you should invest in supercars.

1. Asset-backed securities

We are starting to see more asset-backed securities and bonds that are bolstered by the acquisition of rare supercars and classic cars.

The availability of these bonds gives investors the chance to buy directly into the supercar market. It is popular with high net worth individuals who have a lot of money to invest and a passion for exotic cars.

The idea is that the car dealership or company running the asset-backed security invests in rare, limited edition vehicles that are likely to increase and sometimes even double in value over an extended period of time. This results in the investors making a profit if the vehicles go up in value

TVR

2. Pensions

Now that people in the United Kingdom who are over 55 years of age have the option to cash in part or all of their pension, quite a few of them are deciding to invest in a classic car or supercar.

This not only acts as a good investment but also serves as a potential pastime. Enthusiasts can snap up a limited edition classic car, enjoy driving it throughout their later life and then sell it on for a profit or pass it down to a relative.

It’s an attractive option for people who aren’t interested in letting their money stew in the pension pot. Instead, they can put their money to work and enjoy themselves in the process.

Black Ferrari 488

3. Collateral

Increasing amounts of wealthy individuals are putting their supercars up as collateral to secure short-term loans. This means they are pledging their car as a security for repayment of a loan.

Supercars and classic cars are being used to borrow amounts of money well over the £100k mark. Only an item of significant value could be used to secure a loan of this size.

Be that as it may, loans do not come without risk and there’s always the possibility that your lender could repossess your car if you default on the payments.

Conclusion

Lenders accepting supercars as high-value items, people choosing to use their pensions to invest in rare vehicles and car dealerships offering asset-backed bonds as an investment option are all signs that investing in supercars could be a viable option for anyone with the required capital.