21 July 2023
Tom discovers that while old Defender prices soar, their value on paper seems to have plummeted. Somebody needs to tell the Accountants...
Most days I will meet a chap while walking my dog. While our hounds sniff each other’s bits and roll in offensive-smelling substances, we inevitably end up talking about cars. Among his collection of interesting machinery is a lovely 2015 Defender, which he knows I admire greatly. Today he told me it has become a bit of a problem. “It’s worth too much Tom, and the accountant just doesn’t know what to do with it.”
Now I’m no tax expert, but he is faced with an interesting issue which makes my head hurt. Every five years or so, he would buy a Defender Commercial and put it through the books of his engineering business. As the end of production approached he panicked and ordered another; by chance his Corris Grey 110 XS crew van is one of the last off the line.
He looks after his cars well, but it’s not been particularly pampered and has been set to work carrying hay bales, the odd vintage car engine and towing horseboxes. But the mileage is low and it’s been kept warm and dry in his warehouse when it’s not being driven.
When the 110 got to five-years old, he looked at the new Defender and decided it wasn’t for him for all the reasons you can imagine. So he simply kept the old one. Now it’s eight-years old, his accountant says he really needs to do something about it.
From a business accounting point of view, the Land Rover has been ‘written down’ as a depreciating asset to the point where it is worth almost nothing on the books. But the trouble is, it hasn’t depreciated at all in the real world. In fact, it’s actually gained in value since he bought it. He swallowed hard when I showed him a similar Defender for £42,000 at a dealer. It means the man in charge of the spreadsheets has become incredibly confused by the phenomena.
All worth a pretty penny – but not on paper
It seems the options are to sell the Defender and pay tax on the difference between sale price and write down value, or he could sell it to himself cheaply and hope that HMRC doesn’t question it. The third option is to pay the company to buy it at the market value and end up paying lots of money in all directions.
He likes the ‘old truck’ but doesn’t fancy any of these options, so he’s come up with a solution to make the headache go away – for a while at least. He’s cleared a space in the warehouse and is going to store the Defender, on a shelf made of girders. It will be an interesting feature, he says, and it will make it much trickier to steal if it’s 12ft in the air. Like many owners he is paranoid about theft, which adds to the stress of having a Defender.
It will stay on the shelf, forming part of his retirement fund. He says he can then worry about it in ten years. In the meantime, he’s going off shopping for a pick-up to replace it as a tow car.
For the first time in 35 years, he won’t be going to a Land Rover dealer, like thousands of other farmers and business owners. I told him to buy a new Ford Ranger, as it has a Land Rover engine at least – the 3.0-litre V6 diesel is a development of the ‘Lion’ engine last seen in the Discovery.
After asking around in the trade, it seems he is far from alone in having this plan. Some ‘classic’ Defender owners are tempted to sell when they see the prices being achieved, but others are happy to hang on, seeing them as an investment.
I’ve heard more than once that the place to get the best price for a Defender isn’t an auction or Auto Trader – it’s a game shoot. The well-heeled hunters arrive in their German 4x4s and slither up a slope, but quickly realise a classic Land Rover is as much part of the uniform as a Belstaff or Barbour. Chequebooks are waved at anyone turning up with a smart Defender.
While the amounts offered are tempting and it’s difficult to say no to a man wielding a shotgun, owners worry that if they sold up they would miss the uniquely charming Defender experience and would have the urge to buy one again. If prices continue to rise, they’d have to dig deeper and search harder for the right car.
As a result, all over the country Defenders are being squirrelled away in storage facilities and garages next to pampered Porsches and flawless Ferraris. It’s an odd scenario for cars which were proper working vehicles a few months ago.
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