A new investment app lets you put a classic 1955 Porsche Speedster in your stock portfolio. Rally Rd. is a first-of-its-kind marketplace that allows investors to buy an equity stake in classic cars they’ve only dreamed of.
Before you get too excited, no, you can’t drive them, but you can diversify your portfolio with this alternative asset that has enjoyed an impressive run-up.
While we all know that past performance is no guarantee of future gains, according to the Historic Automobile Group’s HAGI Top Index, the value of rare, classic cars has risen more than 500% over the past 10 years. During that same time, the S&P 500 has climbed about 75%.
Rally Rd.’s CEO, Chris Bruno, says the free app helps democratize the classic car market once reserved for the rich and famous. An equity stake in a classic car starts at as little as $50 a share.
“Each of these cars is actually its own little mini-company,” Bruno tells me in the video above at Rally Rd.’s pop-up store in New York City. “Each car has 2,000 shares outstanding, and a minimum investment in any given car is one share.”
There is an exit strategy for investors, and it doesn’t mean having to find a deep-pocketed buyer to cash out or liquidate the asset at auction. “Once a month, a trading window opens,” explains Bruno. “When you decide to sell your shares, you place an order through our partner broker dealers who will match you with potential buyers.”
Of course, for the right price, Bruno says the cars are always up for sale.
The company does not charge a fee to invest on its platform, but, Bruno says, “We do have skin in the game. Rally Rd. owns 2%-10% of each car offered to align incentives with our investors.”
Classic car collection
There are currently 10 classic cars in Rally Rd.’s portfolio with plans to grow its offerings to 150 cars by the end of 2018.
One of the cars in its current collection is a 1955 baby blue Porsche Speedster, valued at $425,000. One share in this rare car is going for $212.50 on the app. The car is one of just 193 Porsches made in 1955 for the US market in this particular blue. (Fun fact: Comedian and car enthusiast Jerry Seinfeld owns the same Porsche model, in the same unusual color as part of his extensive collection of over 20 Porsches.)
Ferrari fans won’t be disappointed. A 1985 Ferrari Testarossa valued at $165,000 is being offered on Rally Rd. for $82.50 per share. It’s metallic prune color isn’t the only thing that makes this 12-cylinder car so unique. This early Testarossa is also fitted with the famous single high mirror on the driver’s side, known as the “flying mirror,” which was removed in later models.
Rally Rd. gets its cars from collectors, dealers and auction houses. Bruno says each car is vetted and maintained by a team of industry experts in the asset class—so a Ferrari specialist is only in charge of the Ferraris, for example.
Looking under the hood
All information about the car is available to investors through the app, including its provenance, photos, videos, records and receipts. In addition to bragging rights, investors also receive a laminated stock certificate featuring a picture of the car they have invested in.
Rally Rd. plans to open show rooms in select U.S. cities over the next several years to give current and future investors an opportunity to see the cars in person. Its first showroom is slated to open in New York City in 2018.
“We operate the collection profitably, so any money earned through car-related merchandise, experiences, and sponsorships can be paid out to investors in the form a dividend,” says Bruno.