Serious art collectors store their items carefully, and now serious car collectors can, too.
On Nov 1, Wearnes Automotive opened a new eight-storey, 200,000 sq ft facility at 45 Leng Kee Road, and launched a novel service with it: Supercar storage.
For a S$1,200 monthly fee (not including insurance), you can store your four-wheeled investment in the brightly lit, climate-controlled, bonded storage area on the eighth floor, a service aimed at the increasing number of high net-worth individuals who collect rare and prestigious automobiles.
“One of the problems for supercar owners here is that they don’t have enough room to store and expand their collection,” said Andre Roy, CEO of Wearnes Automotive, at the building’s opening.
The service is an expansion of what Wearnes has already been doing for its best customers for some time. “Previously, what we were doing was keeping these cars, some of the most beautiful cars in the world, stuffed away in various corners and facilities, and we weren’t doing them justice,” Roy said.
Since it’s a bonded storage area, the new Wearnes facility allows avid collectors to store their cars there without paying Customs duty, as long as the cars are not taken out of storage.
For instance, Wearnes sells the Rimac C_Two, a limited-edition 1,914 horsepower electric supercar, for 2 million euros (S$3.01 million) before taxes. At 20 per cent, the Customs duty for the car would run to 400,000 euros.
Duty as well as Goods and Services Tax is suspended as long as the cars are kept on the bonded premises.
Storing a car without registering it for the road further saves on Additional Registration Fee (ARF), which can be as much as 180 per cent, as well as the Certificate of Entitlement (COE) premium and road tax.
As with works of art, car collecting can deliver handsome investment returns.
For example, the McLaren F1, a British supercar, cost an inflation-adjusted US$1.4 million to buy when new in 1994. In 2017, one example was sold at auction for US$16.45 million.
With the potential for such juicy returns in the supercar market, the S$1,200 monthly fee that Wearnes charges for storage looks like small change. But with the ability to accommodate just 80 cars, the storage business is unlikely to contribute much to Wearnes’ top line.
“Honestly we aren’t doing this for the revenue alone,” Victor Kwan, the managing director of Wearnes Prestige Division, told The Business Times. “Wearnes wishes to position itself as the go-to place for individuals who are interested in these kinds of automobiles.”
The company holds the distributorship for a number of prestige brands here and in the region, including Aston Martin, Bentley, Bugatti, Koenigsegg, Lotus, Pininfarina and Rimac.
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Many of the cars from those brands cannot be registered in Singapore because they come with the steering wheel on the left, but offering buyers a tax-free place to store them could make it easier for Wearnes to position them as collectors’ items.
That said, Wearnes believes that customers who view exotic cars as art often think that taking care of their cars is more important than tax matters. “It’s less about the cost savings, and more that the cars will be kept in a safe, climate and humidity-controlled environment,” said Kwan. “We’ll also help keep them clean and start their engines periodically.”
The storage space itself is less parking spot and more high-end viewing gallery. It’s also been designed as a social space with a lounge area, private dining facility and even a cigar bar.
The idea is that customers will be able to put their prized set of wheels on display while entertaining friends. What good is art if you can’t show it off?
(Related: Three supercars to invest in)
This article was originally published in The Business Times.