How Silverpine finds and sources exclusive collectible cars

Your key takeaways

• Classic cars have appreciated nearly 200% over the last decade as more investors seek to get their hands on a limited number of vehicles
• Finding and buying promising classics with high potential can be difficult and requires a wide network, deep expertise and the right market timing
• The global collectible car market can be broken down into a broad mix of different segments, each with its own characteristics, dynamics and complexities
• The best collectible cars are in top condition, were built in limited numbers, are historically relevant and come from a strong brand

At Silverpine, we are constantly striving to bring our clients closer to the cars of their dreams. Collectible cars as an alternative investment have become increasingly popular, not least as a growing number of wealthy individuals look for ways to diversify their investment portfolios and hedge against macroeconomic risks. Classic cars have appreciated by 185% over the last 10 years as more investors seek to get their hands on a limited number of vehicles.

However, finding the right car at the right time can be tricky and requires consideration of many factors. Since the introduction of the first automobile in the late 19th century, the world has seen many beautiful pieces of automotive engineering, but beauty alone does not make a collectible item, let alone a profitable investment. Consumer tastes are constantly changing, and the exotic, coveted classic purchased today may be worth a fraction of its price tomorrow.

We view our extensive expertise and network as a valuable competitive advantage. Working closely with our partner Drivers Hall, Silverpine strives to identify and acquire interesting automobiles that not only appeal to our clients, but also represent sound investments. A good place to start is by focusing on historically significant models that were built in small quantities. In this article, we will look at the sourcing process and define the emotional elements that can make a car a great collectible. Building on this, the next blog article will cover the essential basics we look for in an asset, including clean condition, originality and complete documentation.

‍We use our wide network and deep expertise to source high-quality assets
‍The global collectible car market can be broken down into a broad mix of different segments, each with its own dynamics and complexities. As inflation reaches 40-year highs in many economies around the world, the overall collectible car market continues to thrive as wealthy individuals seek to convert liquid funds into tangible assets. It is not uncommon for some ultra-rare classic cars to sell for seven or eight figures - these vehicles represent the top of the range and are extremely difficult to acquire. European and Japanese young timers have recently been in increasing demand and can also offer attractive investment opportunities if purchased under the right conditions.

With this in mind, Silverpine’s experienced team is constantly scouring the collectible car market for exceptional vehicles that have the potential to increase in value. Because we receive a percentage of the profit when a car is sold, Silverpine is highly incentivized to acquire its assets at a competitive price and manage them with a focus on stable, long-term returns.

We have defined strict criteria to find the right assets for our platform. A lot of expertise and in-depth industry knowledge is essential to the sourcing process, as we want to select cars that will prove to be a great investment in the future. Our Bugatti EB110, for example, has performed very well with a compound annual growth rate (CAGR) of almost 23% over the last decade, not least because the blue supercar has certain characteristics that others do not. So what are the relevant value drivers in the collectible car market? Here are a few to consider:

‍Brand strength.
Who doesn’t remember when James Bond chased Goldfinger in a beautiful silver Aston Martin DB5? Cars designed and built by companies with strong brand names tend to be more attractive to collectors than products from lesser-known brands. A perfect example is the world famous Italian luxury sports car manufacturer with the "Cavallino rampante" adorning the side of the car. Ferrari has succeeded in developing a brand that is emotionally charged by a rich corporate history, success in racing series, and a high level of innovation in technology and design. Ferrari created a myth around the brand, and well-preserved classics are sought-after collectibles today.

‍Historical significance.
Certain car models that introduced new technology, were driven by famous racers and international movie stars, or even saved an automobile manufacturer from bankruptcy can become desirable collectibles. If the model plays a special role in automotive history and is perceived as such by the global collector community, chances are good that it could become an attractive investment. Of course, beauty is a big plus. Our gorgeous Bugatti EB110, for example, was the first model to come out of the new Bugatti company and, with a top speed of over 350 km/h, was the fastest production car of its time.

‍Scarcity.
The law of supply and demand explains that when scarcity meets high demand, the price of an item will typically rise. In other words, collectible cars that have proven to be great investments were often built in limited, sometimes ridiculously small, quantities. If such rarities are badly modified or involved in an accident, the price of originals in good condition goes up even more. Rarity is not everything, but it certainly helps. The most collectible automobiles are historically relevant, rare, and come from a strong brand. A good example is the Ferrari 250 GTO, a shapely V12-powered homologation model built in a production run of only 36. It dominated various FIA racing series in the early 1960s and manifested Ferrari’s image as one of the most capable race car manufacturers.

Granted, both the Bugatti EB110 and the Ferrari 250 GTO are extreme examples. However, the collectible car market offers a variety of interesting options beyond the super-rare exotics. When it comes to buying or not buying a car, the stated criteria can be used as a general guide to assess its suitability as an investment asset (other attributes are also relevant and will be defined later). Whenever Silverpine finds a car that meets the criteria, the following steps are taken:

• 1. Our experienced team constantly monitors the global car market for vehicles that represent attractive investment opportunities. Once we have identified an asset that meets our high standards, we seek to acquire it through our extensive network of contacts. Timing is critical as we aim to purchase competitively priced cars with solid potential for future appreciation.
• 2. We transport the car to a safe location in Germany. When the asset arrives at the location, we have it thoroughly inspected by our trained experts to ensure that everything is up to our expectations. Sometimes a car has great potential but has minor technical or cosmetic defects. In this case, we perform a professional preparation to restore it to a very good condition.
• 3. Once the car has been inspected and prepared, we park it in a storage facility, which is designed for the storage of valuable automobiles. The facility is climate-controlled, secured, and monitored 24 hours a day to keep collectibles safe and in optimal conditions.
• 4. We understand the importance of ongoing vehicle maintenance and care to ensure that the collectible retains its value and provides stable returns over the long term. Our specialists keep the cars in the great condition they deserve. All Silverpine assets are covered by a comprehensive insurance policy designed for high value collectible cars.
• 5. The car has been spotted, bought, prepared and stored. The next step is for the Silverpine team to begin the process of fractionalizing the asset. Silverpine users can then purchase shares in the car through our app - convenient, secure and 100% digital.