Annual supercar ownership cost = 10% of price?

[964Cup]

Worked example:

McLaren 750S £330k

All figures annual:
Cost of capital £16k (based on 4.79% money market yield)
Depreciation £33k (assume 10%)
Insurance £2k (collector scheme, deemed share)
Maintenance £3.5k (servicing, tyres)
Fuel £4k (8k miles, 18mpg, mix of UK and European pricing)
VED £2K (3 year average)

Total: £61.5k = 18%

Less: smiles per gchhe (gram of cocaine & hookers equivalent)

Assume coke is £100/g (I have no idea, I spend all my money on cars). Assume 1g lasts 1 hour (ditto). I know even less about ladies of the night, but say £250/hr. So gchhe is £350/hr.

Assume 1 hr on the devil's dandruff with company equates to 1 hr behind the wheel of your supercar. 8k miles at an average of 30mph (reasonable for mixed continental/UK driving for a London-dweller) is 267 hours. Or £93k gchhe.

Result? A net saving of £31.5k PA. Without even factoring in the savings on divorce costs.

Delivery is November. Ygchhe may vary.

[mirsgarage]

A lot of super interesting POVs contained here - I thought I would share my own, given that there's a lot of commentary about financing cars etc, to show there's always two sides to the coin and the decision whether or not to finance is going to be very variable depending on your personal circumstances.

Atm I own 3 cars, all owned outright - SLS, '85 911 Hotrod, Panamera Turbo ST.

Car 4 is arriving in the next 3-4 months as soon as I find a deal I'm happy with. I'm unsure if anything is leaving for it. This is probably around £330k (but been used a few years, so should depreciate slower)

Car 5 is arriving in 2025. This one is new, and will likely depreciate significantly (£350-370k purchase price, expecting a hit of £80k or so in the first year) - I'll probably move on from Car 4 and p/x it for this.

For number 4 and 5, I am considering financing - despite the high interest rate. Purchase price of £330-370k is one thing - but paying myself a lumpsum dividend of £330k is going to trigger £131k in tax. That's just to pay for the car, not considering my actual costs of living, which will be taxed @ 39% dividend tax rate for anything I want to use to live on. So to pay for the £330k car, I'm into drawing £550k+ to clear tax and JUST cover the car. Without any living expenses for the year, or tax for such.

All in for me it feels more palatable to pay £65k down and ~£3k per month for a couple of years. Cashflow is improved. Not getting reamed by tax all in one year either.

But, this doesn't make sense for you if you're a little older (or just richer than I am!) and have had time to make your drawings over the last 10+ years of business with a fat savings account. To give you context, to buy car #4 @ 330k in cash, I'd like to have at least £1m+ in cash savings in my account, cleared of tax, and a healthy ongoing incoming cashflow - otherwise I'd feel uncomfortable about my spend/save ratio. I am still in the 30-ish range of age. Most of my money stays in my various companies and I pay myself what I want/need as I go along, I keep a (low) 6-figure amount in my personal checking account, cleared of tax as a buffer sum and all my other investments (property et al), cash savings, are in/around my LTDs, with the exception of 1 home, also owned clean and clear in my personal name with no mortgage etc on it, with reasonable value.

So to buy car 4 (and 5), I am uncomfortable doing it in cash. Doable? Yeah. Desirable? Not for me.

Hence for me, the ridiculous interest rate is fine - but I also take a view that any money spent on vehicles is just that - fun money blown. I would hazard a guess that if you're checking the opportunity cost of the funds you're spending on the car, you're probably looking at it differently than I am. I calculate these stupid purchases on an annualised basis of "fk it". I have a %age allowance on my income for "fk its". Life is short. As long as it's inside of the allowance, it's fine. Do what works.

Finally - running costs wise, SLS for example for a look at the older end of the market.

Worth £170-180k I guess, no idea. Something like that looking at the market.

Insurance - £1.8k
Tyres - £1.4k (not p.a, usually once every couple of years)
Fuel - ??? (don't check so I don't cry myself to sleep)
Servicing - £1.2k(ish)
Storage (optional) - £2.2k p.a

Optionally when I bought the car I spent £8-10k on "making it right" from a purely aesthetic perspective. Multi stage polish, installation of AppleCarPlay, PPF, rim refurb, so on so forth.

But as far as the actual out of pocket, necessary costs to keep the thing running, maintained and drivable, it's £3.5ish including road tax as a base, but I can't remember what road tax is.

It will get much more expensive, much quicker, when some st invariably breaks. Thankfully nothing has yet.

Edited by mirsgarage on Saturday 16th September 04:28

[justin220]

Interesting thread, and at the other end of the scale I've recently sold my McLaren 540C after a fantastic 5 years of ownership. Loved the car but just wasn't getting used enough to justify keeping it. I bought nearly new and sold as it turned 6 years old. I've got a full break down of costs but this is the high level bits. Maybe worth pointing out I deliberately bought new to give me a decent run of warranty, which I then renewed once.

Bought at Dealer and sold privately to minimise depreciation. Had I PX'd it or sold to trade the depreciation figure would have been a good bit higher.

Ownership period - Just over 5 years, and 16000 miles
Depreciation - £55k (not incl finance cost as some may pay cash)
Servicing - £24843
Average maintenance cost per year - £4968
Total cost per year incl depreciation - £15968
Cost per mile - 79843 / 16000 miles = £5 per mile


Quite frightening when its broken down like that.. For what is a 'entry level' supercar. I've not quite decided what I'll move into next, but for now I've jumped off the PCP bandwagon for now and its very liberating.

I've not included petrol/tax/insurance as we would be paying these on all cars, and variable depending on person/use etc.

Edited by justin220 on Saturday 16th September 08:26

[Rick101]

mirsgarage said:

to buy car #4 @ 330k in cash, I'd like to have at least £1m+ in cash savings in my account, cleared of tax, and a healthy ongoing incoming cashflow - otherwise I'd feel uncomfortable about my spend/save ratio. I am still in the 30-ish range of age. Most of my money stays in my various companies and I pay myself what I want/need as I go along, I keep a (low) 6-figure amount in my personal checking account

FFS

[TBCTBC]

justin220 said:

Ownership period - Just over 5 years, and 16000 miles
Depreciation - £55k (not incl finance cost as some may pay cash)
Servicing - £24843
Average maintenance cost per year - £4968
Total cost per year incl depreciation - £15968
Cost per mile - Almost bang on £1 per mile

Servicing was almost £5k a year on a 540c?

[andrew]

justin220 said:

Interesting thread, and at the other end of the scale I've recently sold my McLaren 540C after a fantastic 5 years of ownership. Loved the car but just wasn't getting used enough to justify keeping it. I bought nearly new and sold as it turned 6 years old. I've got a full break down of costs but this is the high level bits. Maybe worth pointing out I deliberately bought new to give me a decent run of warranty, which I then renewed once.

Bought at Dealer and sold privately to minimise depreciation. Had I PX'd it or sold to trade the depreciation figure would have been a good bit higher.

Ownership period - Just over 5 years, and 16000 miles
Depreciation - £55k (not incl finance cost as some may pay cash)
Servicing - £24843
Average maintenance cost per year - £4968
Total cost per year incl depreciation - £15968
Cost per mile - Almost bang on £1 per mile

Quite frightening when its broken down like that.. For what is a 'entry level' supercar. I've not quite decided what I'll move into next, but for now I've jumped off the PCP bandwagon for now and its very liberating.

I've not included petrol/tax/insurance as we would be paying these on all cars, and variable depending on person/use etc.

have you divided your costs per year by your TOTAL five-year mileage ???

[justin220]

TBCTBC said:

Servicing was almost £5k a year on a 540c?

On average yes, but bear in mind I didn't have a warranty for the later years, (which would have been circa £3k per year if I did) Thats including tyres, other failures, bit of paint due to bubbling etc. Had I had the warranty each year I suspect it would have worked out about the same.

Warranty/service/tyres = No warranty/repairs/service/tyres

andrew said:

have you divided your costs per year by your TOTAL five-year mileage ???

Yeah good spot.. Its actually around £5 per mile which is quite horrific!

Edited by justin220 on Saturday 16th September 08:28

[TBCTBC]

Ah OK, that makes more sense.

As a comparison, my R8 v8 was £25k all in (servicing, MOT, insurance, tax, deprecation, fuel, everything else etc.) over 5.5 years and approximately 12,000 miles = £2.10 per mile.

I did a WBAC price check recently on the car (now sold) and they offered £23k!

[DeejRC]

964Cup said:

Worked example:

McLaren 750S £330k

All figures annual:
Cost of capital £16k (based on 4.79% money market yield)
Depreciation £33k (assume 10%)
Insurance £2k (collector scheme, deemed share)
Maintenance £3.5k (servicing, tyres)
Fuel £4k (8k miles, 18mpg, mix of UK and European pricing)
VED £2K (3 year average)

Total: £61.5k = 18%

Less: smiles per gchhe (gram of cocaine & hookers equivalent)

Assume coke is £100/g (I have no idea, I spend all my money on cars). Assume 1g lasts 1 hour (ditto). I know even less about ladies of the night, but say £250/hr. So gchhe is £350/hr.

Assume 1 hr on the devil's dandruff with company equates to 1 hr behind the wheel of your supercar. 8k miles at an average of 30mph (reasonable for mixed continental/UK driving for a London-dweller) is 267 hours. Or £93k gchhe.

Result? A net saving of £31.5k PA. Without even factoring in the savings on divorce costs.

Delivery is November. Ygchhe may vary.

I would just like to say that this is genius accounting. I fully approve

[Bispal]

justin220 said:

TBCTBC said:

Servicing was almost £5k a year on a 540c?

On average yes, but bear in mind I didn't have a warranty for the later years, (which would have been circa £3k per year if I did) Thats including tyres, other failures, bit of paint due to bubbling etc. Had I had the warranty each year I suspect it would have worked out about the same.

Warranty/service/tyres = No warranty/repairs/service/tyres

andrew said:

have you divided your costs per year by your TOTAL five-year mileage ???

Yeah good spot.. Its actually around £5 per mile which is quite horrific!

Edited by justin220 on Saturday 16th September 08:28

£5k pa on services! My 675LT average is around £800pa at a main dealer. I've had one set of tyres that were £880 (MPS4S). My car has averaged 24mpg over 13k miles. The biggest cost had been the warranty. In 4 years my running costs per mile excluding insurance and petrol as every car needs those, but including servicing and warranty has been £1 per mile. If you add in depreciation I have made £2 per mile profit, so I should drive it more

[mirsgarage]

Bispal said:

£5k pa on services! My 675LT average is around £800pa at a main dealer. I've had one set of tyres that were £880 (MPS4S). My car has averaged 24mpg over 13k miles. The biggest cost had been the warranty. In 4 years my running costs per mile excluding insurance and petrol as every car needs those, but including servicing and warranty has been £1 per mile. If you add in depreciation I have made £2 per mile profit, so I should drive it more

I think the non-warranty years skew the data a little, given the "failures" he's talking about.

My 720S, if not under warranty, would have easily cracked £6-7k p.a in dealer visits.

[justin220]

Bispal said:

£5k pa on services! My 675LT average is around £800pa at a main dealer. I've had one set of tyres that were £880 (MPS4S). My car has averaged 24mpg over 13k miles. The biggest cost had been the warranty. In 4 years my running costs per mile excluding insurance and petrol as every car needs those, but including servicing and warranty has been £1 per mile. If you add in depreciation I have made £2 per mile profit, so I should drive it more

Heres a rough breakdown if it helps. It's probably worth adding, I had a lot of additional work covered under warranty and also goodwill outside of warranty. The below list is from all the invoices over the years.

Service 1 421
Service 2 1240
Service 3 925
Service 4 2086
Service 5 4995 (incl rear suspension dampers and springs)
Service 6 1582
Tyres 1670 (4 rears and 2 fronts)
Other Misc Repairs 3695 (boot latch, air con & coolant pipework, wiper motor)
Paint 1414 (bubbling out of warranty - this was 25% of the cost, McLaren covered 75% cost at goodwill)
Brakes 3197
Warranty 3618 (1 year renewal)
TOTAL over the 5 years 24843
Average per year £4968

Thoroughly enjoyed my time with the car, but difficult to stomach those costs when it was only doing 2-3k miles per year.

[br d]

I'm afraid to look at these figures!

10% depreciation PA? Try that for the first year of a new McLaren

I must admit I never break down the costs to this degree, if I can afford it that's good enough.
I'd never get into the argument about whether finance or buying is better, I've done both and they each worked out okay.
My next car will be bought outright, I know there's a thousand arguments not to do that but I like to know that within, say a ten grand margin, the value of the car is exactly what I'll recoup if I sell it. That way I know what my financial standing is at any time.

[Bispal]

justin220 said:

Bispal said:

£5k pa on services! My 675LT average is around £800pa at a main dealer. I've had one set of tyres that were £880 (MPS4S). My car has averaged 24mpg over 13k miles. The biggest cost had been the warranty. In 4 years my running costs per mile excluding insurance and petrol as every car needs those, but including servicing and warranty has been £1 per mile. If you add in depreciation I have made £2 per mile profit, so I should drive it more

Heres a rough breakdown if it helps. It's probably worth adding, I had a lot of additional work covered under warranty and also goodwill outside of warranty. The below list is from all the invoices over the years.

Service 1 421
Service 2 1240
Service 3 925
Service 4 2086
Service 5 4995 (incl rear suspension dampers and springs)
Service 6 1582
Tyres 1670 (4 rears and 2 fronts)
Other Misc Repairs 3695 (boot latch, air con & coolant pipework, wiper motor)
Paint 1414 (bubbling out of warranty - this was 25% of the cost, McLaren covered 75% cost at goodwill)
Brakes 3197
Warranty 3618 (1 year renewal)
TOTAL over the 5 years 24843
Average per year £4968

Thoroughly enjoyed my time with the car, but difficult to stomach those costs when it was only doing 2-3k miles per year.

I actually think £5k pa to run a supercar is pretty good value all in? You did include 6 services, not 5, and tyres. The 'services' still work out at around £1,250 pa if you take out repairs, which again appear to be suspension consumables?

The service costs, tyres and repairs are similar to high end cars such as BMW M, AMG & RS but you have a supercar and these costs seem broadly comparable to contemporary Ferraris and Lamborghinis.

For instance my cousin just paid £4.5k for a service and new rear light on his performante and that was under warranty, which he paid for on top.

[justin220]

Yeah I guess its not too bad considering.. The £/mile cost would have been a lot lower had I bought used at 3 year old for example.

[Bispal]

justin220 said:

Yeah I guess its not too bad considering.. The £/mile cost would have been a lot lower had I bought used at 3 year old for example.

Consider a New M4 comp is £90k (with a few options). Currently a 3 year old one retails for £40k (and that's with dealer profit). At least £50k loss in 3 years. Many new cars are the same, look at Tesla's. A new long range model 3 is £51k. A one year old used is £35k. That's £16k down in a year, again with dealer margin.

owning a lightly used 3 year old supercar probably works out cheaper than a brand new regular car.

[macdeb]

Bispal said:

justin220 said:

Yeah I guess its not too bad considering.. The £/mile cost would have been a lot lower had I bought used at 3 year old for example.

Consider a New M4 comp is £90k (with a few options). Currently a 3 year old one retails for £40k (and that's with dealer profit). At least £50k loss in 3 years. Many new cars are the same, look at Tesla's. A new long range model 3 is £51k. A one year old used is £35k. That's £16k down in a year, again with dealer margin.

owning a lightly used 3 year old supercar probably works out cheaper than a brand new regular car.

Bought my 12C almost three years ago (cash) at 11k miles, now at just 20k miles. I was offered more than I paid for it this summer when I just had thoughts I may have to sell. Thankfully, I managed to keep it.

[964Cup]

br d said:

I'm afraid to look at these figures!

10% depreciation PA? Try that for the first year of a new McLaren

Sure, but with McLarens especially there's a levelling effect. My 750 will lose, what, £80k the minute I drive it off the forecourt? But it will probably "only" lose £100-120k over three years in total - so around 10-15% PA. My interim 720 spider was £180k (at the time the cheapest in the UK, I think) and most 2019 cars are around the £200k mark; so they've lost about £80k over four years, or just under 10% PA. Obviously dealer margin and mileage will matter, but dealer margin isn't depreciation, it's convenience - and mileage (or more accurately time behind the wheel) just helps your gchhe number.

[Bispal]

964Cup said:

br d said:

I'm afraid to look at these figures!

10% depreciation PA? Try that for the first year of a new McLaren

Sure, but with McLarens especially there's a levelling effect. My 750 will lose, what, £80k the minute I drive it off the forecourt? But it will probably "only" lose £100-120k over three years in total - so around 10-15% PA. My interim 720 spider was £180k (at the time the cheapest in the UK, I think) and most 2019 cars are around the £200k mark; so they've lost about £80k over four years, or just under 10% PA. Obviously dealer margin and mileage will matter, but dealer margin isn't depreciation, it's convenience - and mileage (or more accurately time behind the wheel) just helps your gchhe number.

And to reinforce what you state a new 12C was £168k new in 2011. Now 12 years later they are around £70k. That's £8k pa over 12 years. They key to supercar ownership is not being fickle and changing your car every 12/24 months. You lose so much in deprecation and dealer spread. Even a basic spec 2015 675LT at £260k new would be around £210k now. That's only £6,250 pa in depreciation.

[ex-devonpaul]

Bispal said:

And to reinforce what you state a new 12C was £168k new in 2011. Now 12 years later they are around £70k. That's £8k pa over 12 years. They key to supercar ownership is not being fickle and changing your car every 12/24 months.

That's the key to any car ownership. That, and not buying brand new.
We lost £15k on our Maserati in the 7 or so years we had it. Oddly when we bought it they were a sure thing. "values are only going one way", "future classic" etc in the adverts. A lot of adverts are still saying the same thing, perhaps one day they'll be right.