Classic cars as of late are good investments. But to get into that market, you have to have deep pockets. It’s a market that historically only been accessible to a wealthy few.
An app called Rally Road looks to democratize the ownership of classic cars and let the average joes get in on the action. The New York-based startup lets investors buy a real equity stake in a classic car for as little as $50. Rally Road turns the car ownership into stock.
“Each investment on Rally Rd. is essentially a mini public company,” says Christopher Bruno, the start-up’s co-founder, and CEO. “Our investors are able to create a custom, diversified portfolio of equity interest in blue-chip collector cars, share by share.”
Rally Rd.’s team of experts identifies each investment opportunity. Then the company acquires the car and securitizes it, turning it into equity shares. Price per share is determined by the value of the car divided by 2,000. Investors are then able to purchase stock in the vehicle for as low as $50 a share. Rally Rd. does not charge any commissions or management fees, and the entire process is completed on a smartphone, through the company’s mobile app.
The cars on Rally Rd. are always for sale. The start-up decides when to sell a car with the help of input from an expert advisory board, as well as investor sentiment, determined by data collected on the app. After a car is sold, the proceeds get paid to its shareholders. If investors want to exit before an asset is liquidated, they can trade their shares on a secondary market during monthly trading windows.
The museum-quality cars are kept in a purpose-built, temperature controlled environment which is prepaid by the money raised in each offering. Investors will soon be able to watch a 24/7 live stream of the car they own a stake in. Rally Road currently takes no management fees or share of the offering but plans to offer additional premium or subscription services in the future to generate revenue.
• Rally Rd
Classic cars have increased in value by 457 percent in the past 10 years, according to the Knight Frank Luxury Investment Index. Rally Rd. is betting that number will continue to rise.
This asset class has outperformed gold, the S&P500, and New York City Real Estate since 2012.