Crowdfunding for Cars: Revving Up Car Investments

Car crowdfunding takes different forms and relies on different crowdfunding models. Some people opt for crowdfunding for car repairs, others hope to raise money in donations to buy a car, and the most entrepreneurial ones use car crowdfunding to launch or expand their businesses.

In the article, we will have a look at equity crowdfunding for a car business including crowdfunding for owning a share of a classic car and crowdfunding for expanding a car rental or car sharing business.

Crowdfunding for classic cars

The idea of equity-based crowdfunding for cars relies on the concept that some cars, particularly classic or rare models, can be regarded as an investment asset that can appreciate in value over time. 

According to Investopedia, classic cars “gain in value more than other types of collectibles” which makes them a lucrative investment.

Additionally, investors may receive dividends based on their stake size if a car is loaned for appearances in movies, TV shows, advertisements, or media events. 

One of the platforms specializing in this specific investment asset type is TheCarCrowd.

TheCarCrowd – crowdfunding platform for cars

TheCarCrowd was launched in 2019 to democratize one of the strongest-performing investment classes – classic and rare cars. According to the Knight Franks Index, classic cars have appreciated 185% during the last decade. 

Only high-net-worth or sophisticated investors can invest in the assets on TheCarCrowd. The investor verification for investors residing in the UK is performed online and takes 5-10 minutes only. International investors need to pass manual KYC and the verification process may take up to 10 days.

To ensure the best investing opportunities, the platform’s specialists pick the most iconic cars from the UK’s most prestigious dealerships. For each individual car, a limited liability company is created that issues a number of fractional shares. Once the funding is over, the LLC owns the car, and the shareholders own the LLC.

TheCarCrowd takes care of the investment cars maintenance, storage, and insurance for the period of up to 5 years, all these costs are already included in the price of shares. All cars are accessible to investors 6 days a week in the storage center.

Investors can vote annually on whether to keep the car or sell it, all profits received from the sale are returned to the investors based on their share.

In the example of the Lotus Esprit V8 Turbo campaign, one can see what the conditions are, including events that can be organized to draw additional income for investors such as using the car for static photography/filmography, or corporate use such as featuring in a magazine, appearance in a movie, etc., when the cars may accrue additional limited mileage. 

Cars that are open for investment and funded cars can be checked on the platform’s showroom page. 

Crowdfunding for rent- and car-sharing business

For those looking to launch or expand their car-sharing business and looking for funding, equity crowdfunding may be one of the viable options. 

Evee

A notable example of such a campaign is Evee, a business operating in the sector of electric car renting and car sharing.

In 2023, the company raised $1.6 million through Birchal, a Sydney-based crowdfunding platform. With 618 investors taking part, this funding round became one of the largest in Australia in 2023.

UFODRIVE

Another example of this type of car crowdfunding is the case of UFODRIVE, a Luxembourg-based car rental company.

UFODRIVE was raising £1.5mln on Seedrs (now, EuropeRepublic), in 2021. The company claims to be the world’s fastest and easiest car rental service. Its fleet consists of 100% from electric cars, which means that the company has already moved to net zero emissions. 

More than that, UFODRIVE makes contributions to help global environment regeneration.

The campaign was founded for 135%, raising £2,027,340 from 978 investors. The minimum nominee investment was £20, and the minimum direct investment was £25,000.

The company planned to deploy the raised funds as follows:

• Opening new locations in at least 6 new locations including the UK and purchasing vehicles – 35% of the raised funds.
• Targeted brand awareness and marketing campaigns – 25%.
• Talent acquisition for sales and technical teams – 20%.
• Further development of the proprietary Mobility Solutions EV fleet management platform – 20%.

Udrive 

Another successful equity crowdfunding campaign was run by Udrive, a leading car rental company in MENA. The UAE-based Udrive raised $1.3 million within just 48 hours from 186 investors. The campaign was run on Eureeca, a global equity crowdfunding platform. 

Flipping cars from auctions

Purchasing used cars and releasing them at auctions is another business idea that needs funding. Normally, it would work for a business that has been working with car repairs or sales of used cars. 

Even though the idea to use crowdfunding to buy a car and sell it for a profit is valid and such a business may become a lucrative investment option, each step shall be well-planned. Otherwise, one may end up raising just 5 pounds from one backer within 56 days, like in the case of a community crowdfunding campaign in Northampton, the UK.

Launch a crowdfunding platform for a car business with LenderKit

If you are thinking about launching a crowdfunding platform for car financing or business development check out white-label crowdfunding software by LenderKit. 

With LenderKit, you can launch an equity crowdfunding or P2P lending platform for cars financing and business funding or go with a more non-profit style and set up a donation crowdfunding platform. 

Our investment software comes with a set of readily-available features so that you can launch your platform asap. Everything in LenderKit can be customized either by our development team or your own to match your business needs more precisely. If you are interested in starting your own car financing platform or any other, don’t hesitate to reach out to us.