Ferraris, GT3s & Taxes: Should You Treat That Car Like an Investment? | VIP Wealth Advisors

🏁 What high-net-worth investors need to know before treating Ferraris, McLarens, and GT3s as alternative assets.

You've made it. The company exit closed. The equity plan hit. The liquidity is real, and so is the voice in your head saying:

“It’s time.”

Time for the Ferrari 812 Competizione. Or the McLaren 765LT. Or that Lamborghini STO you've had bookmarked for years. You’ve watched the YouTube reviews. You’ve followed the auction results. You’ve heard people say these aren’t just cars, they’re assets.

And maybe… an investment.

But are they?

At VIP Wealth Advisors, we work with entrepreneurs, tech executives, and business owners who've earned the right to enjoy what they've built but still want to make wise, intentional choices with their capital. So before you take delivery, let's look under the hood of the exotic car market and ask:

Is this a legitimate alternative investment? Or a lifestyle indulgence dressed in resale potential?

This isn't about saying no to the dream — it's about making sure you're driving it with your eyes wide open.

If you're buying a car, even a high-end one, chances are it will lose value over time. Most new cars shed 15–25% of their value within the first year, and standard luxury cars are no exception.

But there's a growing class of vehicles that break this rule: investment-grade exotic and hypercars.

We’re talking:

• Ferrari LaFerrari, F40, 812 Competizione
• Porsche Carrera GT, 911 GT3 Touring, 918 Spyder
• McLaren P1, Senna, F1
• Bugatti Veyron and Chiron
• Pagani Huayra

These cars aren’t just expensive, they're rare, historic, and emotionally magnetic. And when handled correctly, they've historically appreciated more than gold, art, and even the S&P 500 in certain years.

Let's turn to the data.

Knight Frank’s 2024 Luxury Investment Index:

So yes, select exotic cars have outperformed traditional inflation hedges and even public markets over multi-year timeframes. But these returns aren't available to everyone. And not every exotic qualifies.

1. Scarcity

Low production numbers are key. Cars like the Ferrari Monza SP2 or Porsche 911 S/T are made in batches of 499 to 1,000 units, creating long-term supply constraints.

2. Brand

Ferrari, Porsche, McLaren, Bugatti — these are blue-chip brands with collector loyalty and deep global demand.

3. Performance Pedigree

Motorsport ties or tech breakthroughs (hybrid hypercars like the 918 Spyder) tend to increase long-term desirability.

4. Analog Nostalgia

Analog, manual, and V12-powered exotics are being phased out, which boosts the value of "last of their kind" models like:

• Porsche 911 997 GT3 RS 4.0
• Ferrari 599 GTO
• Lamborghini Aventador Ultimae

5. Provenance

Low miles, rare specs, original paint, full documentation, and no history of being “flipped” make a huge difference.

So, what do we tell clients?

Here's how I frame it in real financial planning terms:

🚫 Typically No:

Unless the car is legitimately used in a business, there's no depreciation or write-off. Most HNW clients buying a Ferrari SF90 can't claim it on their taxes.

Just like accumulating real estate or private equity, think in stages.

The 4-Step Wealth Strategy for Exotic Car Enthusiasts:

This is a 10+ year game — not a quick flip.

Model: Ferrari 812 Competizione

Timeframe: 5 Years

Now let's deduct the holding costs:

🧾 Annual Carrying Costs:

✅ Final Net Gain Calculation:

Post-Tax Adjustment (If Treated as Collectible):

If the IRS deems the gain from the sale of a personal-use collectible:

• You could face 28% long-term capital gains tax
• On a $200K gain, that's $56,000 in taxes

Then your after-tax net gain would be:

📉 $115,000 – $56,000 = $59,000

But what if you bought a Ferrari Roma instead? That $275K car might be worth $200K or less in 5 years. And that's before insurance and storage.

Sometimes, clients just want a car they love. And that’s okay as long as we frame it honestly.

When I ask:

“Is this a passion purchase or an investment?”

The honest answer is usually:

“Both... but really, I just want to drive something incredible.”

That’s fair. It’s your money. But don’t confuse yield on joy with investment yield.

In planning, we often:

• Segment these as passion assets
• Allocate 5–10% of net worth to “real assets” (cars, art, watches)
• Track value over time, but with lifestyle ROI in mind

If you're a high-income professional, tech executive, or business owner with excess capital, the right exotic car can be a viable piece of an alternative investment strategy.

But only if:

• You play the long game
• You develop a relationship with the brand
• You understand the illiquidity
• You treat it like art, not equities

And if it turns out it doesn’t appreciate? At least you got to live out a dream on the road to "enough."