*NEW* FAQ Historic Plates as an Investment

NEW FAQ Historic Plates as an Investment

www.historicplates.com.au- the Number 1 dealers and auctioneers of SA Historic Plates, est. 1989.

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Historic Plates as an Investment- a guide with Frequently Asked Questions.

Recently a client new to us at Historic Plates asked us some very targeted questions on Historic Plates as an investment.

A highly experienced investor with a wide and varied range of investments in his portfolio, he enquired with us as he was aware of Historic Plates as an investment, and being very astute asked some very pertinent and relevant questions.

We responded at length to his request and I have reproduced this information as the same question has come up a few times from clients new to the Historic Plate market seeking an investment grade plate.

One of the successful purchasers of our record breaking 2-digit auction plates in February was enthusiastically espousing the virtues of Historic Plates as an investment, views which I have also added to the following, the first online guide to SA Historic Plate investing.

**As with all investment advice you should do your own research and come to your own conclusions**

**As with all Plate ownership and transfer related questions, you should check yourself with the helpful folks at DTEI- the Department of Energy, Transport and Infrastructure on ph 131084 for clarification on any questions you may have. **

**Our following advice is of a general nature and should be treated as such.**

This guide deals with Historic Plates (in the series SA “1” – SA “999-999”) and Black Grand Prix Plates (in the series 1-199).

How does a black and white Historic Plate compare to a Blue Chip sharemarket stock?

We asked this question of a client of ours;

What would $1500 invested in BHP on Monday 14th October 1985, the day after The Great Plate Auction, be worth should this money have been invested in BHP shares instead?

$1500 would have bought a nice 2-digit Historic Plate at the previous day's auction- should you had invested this money into BHP shares instead, according to our client on 26.5.11:

".........$1500 invested in BHP in 1985 would be worth approximately $ 92,360 today....." (thanks Michael for the data)

Interestingly, this is almost exactly the average price we achieved for the four 2-digit plates we at historicplates.com.au sold at the 2011 The Great Plate Auction, with sales of $100,000, $100,000, $95,000 and $94,500 achieved for the plates we auctioned live on 13.2.11.

What history of value growth have Historic Plates exhibited 1985-2011?

(Black GP Plates excluded here)

This is a generalised summary but reveals value growth using key sales data points we have gathered over years of Historic Plates sales and market experience.

General Historic Plate numeral combination/numbers have been used as a guide, there would be averages above or below these given data points dependig on plate numerals or unrecorded off market sales.

Pricing excludes transfer fees etc.

The values thus are a general guide (for example we have had many recent 3-digit sales over $20,000 including record prices for SA "180" and SA "911" however these are excetional plates that we achieved exceptional sales results for and thus have not been included so to not skew the averages) and as we are the only ones to have sold four 2-digit plates at The Great Plate Auction 2011 public auction for an average price of $97,375, we have rounded the 2-digit values up to $100,000. Again these we exceptional results so future sales may be above or below this level. Having said this, the four 2-digit plate sales we achieved, with 3 different purchasers at this average price, would seem to indicate the market will currently pay at or about this average price for a 2-digit Historic Plate.

What is a good number to invest in?

Historic Plates and Black Grand Prix Plates: Essentially the lower the number the better. As you cycle through all the potential plate options, there are:

9 x potential single digit plates (e.g. only 4 single digits have had rights sold to them and are thus tradeable)

90 x potential 2-digit plates (e.g. only approx 60 to 65 2-digits have had rights sold to them and are thus tradeable)

900 x potential 3-digit plates (e.g. only approx 75% of the 900 have had rights sold to them and are thus tradeable)

9000 x potential 4-digit plates

90,000 x potential 5-digit plates

900,000 x potential 6-digit plates

So, a three digit Historic Plate is one of only nine hundred plates, whilst a five digit is one of ninety thousand. As you can see, the laws of scarcity and rarity apply here. The lower the rarer and the rarer the more valuable a plate is.

You should buy a number that you like, however we have developed a guide that has some broad guidelines on numeral selection and numeral combinations. See the info at the pages following:

http://www.historicplates.com.au/sa-historic-plate-value-guide

http://www.historicplates.com.au/what-are-lucky-numbers

What are the Historic Plate Costs and Charges

Excluding any brokerage fee, the SA Government charge a 10% transfer fee of the sale price upon the transferral of the plate into the new owner’s name. Once the plate is purchased this is the payment which facilitates putting the plate in your name.

What do the Government allow you to do with your plate?

You can reserve a plate for future use, or register it on a car. The only caveat is that the plate needs to be registered in the same name as the car it is to be registered on, be that a personal name or a business name: the tow need to match up via the “Client Numbers” that are on your registration documents.

Your client number/licence number is your ID within the Motor Registration system and once the plate is transferred into your name you can either register it on a car or reserve it for future use. If the plate is being reserved and you order new plates to be made the Motor Registration will not hand out the plates until they are registered on a car.

What taxes and levies are apportioned to plates?

Other than the initial transfer fees there are no other taxes and fees*.

Speaking of his newly acquired investment plate, a property investor client of ours enthusiastically gave the commentary:

“there are no land taxes, no capital gains taxes, no leasing or rental costs, no maintenance or upkeep fees, no tenants, no councils or council rates and taxes to deal with, no wear and tear costs and no other fees- they are the ultimate investment”

You should do your own research and come to your own conclusion*, however our above client backed himself with the acquisition of a 2-digit plate at a record price just under $100,000 and his second 2-digit plate- at our The Great Plate Auction in February 2011.

*Disclaimer: Note: this is the current Class Specific Rights system and as with any Government Statute is subject to future change by the SA Government, which would require new legislation to be passed through Parliament. Having said this we understand that the title to Historic Plates is inalienable in the way it has been legislated and set up, and that any changes to the current system that has been in place first since 1985 would be subject to action by the owners of all the Historic Plates on issue. Essentially, there is no possible way the system could change given the volume of plates that have had Proprietary and Class Specific Rights obtained to them from 1985 on.

What title do I have?

Upon transferral of the plate into your name and payment of the transfer fees you have acquired the “Class Specific Rights” to that number. Essentially with the Historic Plates you have obtained clear title to this number in the relevant Class and thus have secured the “right to display and trade” this number plate.

Is GST payable?

GST is not payable on Numeric/Historic number Plate Agreements*

What names can Historic Plates be transferred into?

Trusts, personal names, joint names and business names- as long as a Department of Transport Client number exists for the entity the plate can go into this name.

What happens if my plate is stolen or misplaced?

Your value in the plate is it’s registration within the DTEI computer system and the paperwork that proves your ownership of the number. Should a plate be stolen it will be replaced via ordering a new one at a DTEI office; this is taken quite seriously with a report to the police advising of the stolen plate required upon the re-order of a plate. Your title to the plate held within the DTEI system is where your interest in the Historic Plate is recorded.

Can Historic Plates be bequeathed in a will?

Yes. Your clear title can be bequeathed should you have obtained Class Specific/Proprietary Rights to the number. Having retained all relevant Historic Plate paperwork here is key of course.

How do I realise my investment in a plate in the future- how liquid are Historic Plates?

Historic Plates are quite liquid and are relatively simple to divest of. Clearly the number itself, the price being asked and the general marketplace are variables, however our current rate of sales for all good plates is strong and they are relatively easy to realise should your investment priortities change or you are upgrading your plate into a lower/better number. Auctioning special numbers at next Great Plate Auction event is the best way to achieve a market correct price for your plate shold it be a low/special number as our results in February 2011 proved- but we can always find a buyer for the best plates at any time of year.

Can I gift a Historic Plate to a family member?

Yes, a transfer fee is payable**; should no monetary consideration change hands the transfer fee levied will be 10% of the price at which the Historic Plate last traded.

Are there any investment comparisons to be made with the Eastern States?

Yes, the SA Historic Plate market has followed a fairly consistent pattern of being a facsimile, on a smaller scale, to that of the Eastern States. Our population is smaller than that of NSW and Vic and our economic base different, yet our market mirrors these states, in terms of the numbers and combinations that called out as are desirable, what the market values special/low/desirable numeral combinations at and what number plates are viewed as future blue chip investments.

Generalising, SA is approximately one quarter to one third the value of comparative plates in Vic and NSW, spelling us out as both affordable and with potential capital growth in the future.

Again, we re-iterate, **As with all investment advice you should do your own research and come to your own conclusions**

Again, we re-iterate, **Our above advice is of a general nature and should be treated as such.**

Of course your BHP share growth would be subject to taxation, a situation that your Historic Plate investment would not be subject to, making the Historic Plate a far more attractive invetment.

An interesting excercise, we felt.

Historic Plates.com.au

*NEW* FAQ Historic Plates as an Investment

NEW FAQ Historic Plates as an Investment