The era of buying high-end sports cars seems over

Henry N. Manney III, an automotive journalist best known for his extensive writing in Road & Track magazine, bought a Ferrari 250 G...


Henry N. Manney III, an automotive journalist best known for his extensive writing in Road & Track magazine, bought a Ferrari 250 GTO in the late 1960s. One of only 36 cars ever built, the car was the top-of-the-line sports/racing car Ferrari’s $18,000 range in 1962. When the cars rolled off the production line, Enzo Ferrari, the company’s founder, had to personally approve each buyer.

But less than a decade later, when Mr Manney bought his GTO, he paid less than a third of its original cost. Today, the car could be worth over $60 million, with a 1963 model sold for $70 million in 2018.

With this purchase, Mr. Manney, who died in 1988, became something of a legend, a folk hero and a role model for people of ordinary means who were able to buy and enjoy truly special cars through the miracle of depreciation. It’s a hobby that basic auto enthusiasts might not be able to partake in today.

At the moment, the damping cycles of high-end sports cars are clearly doing something unusual. In the past, these cars would lose a large percentage of their value shortly after sale. From there, it was a long slog to the bottom of the depreciation curve, where cars often languished for years, sometimes decades, before nostalgia-driven interest drove values ​​up again. Collectors would tend not to notice this until the value of a car had returned to its original price.

But recently depreciation curves seem to have become much shallower and appreciation seems to be happening much sooner than in the past. This may sound the death knell for today’s middle class who dream of buying ambitious cars for pennies on the dollar.

“By the mid-2010s, the paradigm shifted around premium sports cars,” said John Wiley, head of valuation analytics for classic car insurer Hagerty. “While cars like the 2005 Ford GT, 2005 Porsche Carrera GT and 2003 BMW Z8 had all seen a slight depreciation after five years, the next generation of limited-production premium sports cars like the McLaren P1, the new Ford GT and Porsche 918 Spyder had enjoyed it all after five years.

Art Mason, a commercial airline pilot who lives in Pennsylvania, had his own dreams of Ferrari ownership. While his dreams weren’t as lofty as Mr. Manney’s, he nevertheless bought a 1982 Ferrari 308 GTSi, with warranty, for $35,500 in 2008.

“That price was just over half the car’s new price, and 308s had been available in that price range for almost 20 years,” he said. “For a West Philly kid who spent his youth poking his nose against showroom windows, the thought of owning any Ferrari was a big deal.”

Mr Mason sold the Ferrari about 10 years ago for $36,000, but today this 308 could push $100,000, a third more than its original list price.

The idea of ​​owning any Ferrari for half the price new or less is quickly fading. An early 2000s 360 Modena with a manual transmission is already about $25,000 more than its original price of around $150,000. Ferrari’s depreciation trajectory has nothing to do with that of its ancestor, the 308.

“So many people are willing to pay a lot more for cars than collectors have been in the past,” Mr Mason said. “Even though I loved owning a Ferrari, it just doesn’t appeal to me at the price the cars fetch now. A lot of these cars are just pushed into big collections and hidden away. That seems to be proof enthusiasts like me no longer buy these cars.

Neil Gellman, a St. Louis-based realtor, had wanted a Porsche 911 Turbo for most of his life.

About eight years ago, he realized that the 911 Turbos of the early 2000s had become remarkably, and almost unbelievably, cheap. He bought a 2001 model with 39,000 miles on it for $36,000.

“The car cost well over $100,000 new,” Mr. Gellman said. “I couldn’t believe that for less than $40,000 I could buy a barely used 911 Turbo, for what was essentially the price of a new Camry. »

Today, the value of this car is already approaching its original sale price. Looking back, Mr. Gellman realizes he bought his car at the bottom of the depreciation curve. “I didn’t expect the car to take on so much value, so quickly. I might have held it back,” he said.

Typically, Hagerty’s Mr. Wiley noted, cars like used Porsche 911 Turbos hit rock bottom and then sit there for a while.

“Until around 2011, a 1980s 911 Turbo could still be had for less than half its original price,” he said.

Now new 911 Turbos are selling above their original price, and not a single existing model seems to be depreciating. Some 911s of certain vintages actually appreciate quite quickly, especially those with manual transmissions, Mr. Wiley said.

“It’s hard to find a precise explanation,” he said. “Cars have certainly gotten more expensive, and people can use them and rate them differently, putting fewer miles on them, and maybe there’s also the realization that we’re nearing the end of the world. era of automotive pure internal combustion, and that these cars will be considered quite special in the future.

Lamborghinis are also going up in value. The Gallardo was the company’s best-selling car, with over 14,000 sales from 2008 to 2018. That was a huge number for a boutique manufacturer, which had made around 30,000 cars in total before the release of the Gallardo. By 2019, the first vintage Gallardos had hit the bottom of the $80,000 range, about half their original cost. Today, these cars cost over $100,000, with rare manual transmission Gallardos selling for over $200,000.

There is also the current reality based on supply and demand.

Many of the new sports cars produced in smaller numbers actually start at prices significantly above the actual selling price. Recently, Mr. Mason, the Pennsylvania-based driver and former Ferrari owner, bought a new Porsche 718 Spyder.

“I might have been the last regular person to buy one at the list price, and I never would have paid extra, but from what I understand people are paying over $30,000 more than the MSRP to get one. While a buyer under these circumstances may not recoup that extra dealer margin down the road, I don’t expect my car to depreciate much, ever.

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Newsrust - US Top News: The era of buying high-end sports cars seems over
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