Supercar valuations. Stick or twist?

[Camlet]

TISPKJ - agree, non car people are distorting the market, presume they'll all rush for the exit at the first hint of a possible major correction bloody guaranteeing one? Ajr550 - agree, predicting the market for someone like myself is impossible, but having had my 599 GTO out this morning for a blast, damn that car is a fabulous brute (makes my 458S seem like Sugar Ray Leonard to the 599 GTO's Mike Tyson), the 599 must be slated for greatness! 70proof, as always much sense matey - I watched the TV show, thought it was surprisingly well made and both sales guys were impressive people and wonderful family guys. Rubystone, the finance deal is very attractive, I was shocked when my Ferrari dealer (a large one) told me 85% of all his new sales were financed ( he also explained that's probably why I wasn't offered a 458SA lol because I've never bought on finance!) - 1m for a Daytona? Scary stuff. Sone, I think you nailed it, you're probably right that mid term nothing much will happen and who knows the effect of Dragonomics, which is four years late.

So think about a finance deal and have several bottles of Trappist Belgian beer chilled and ready for a very rapid journey into oblivion should a rush for the exit happen. First, find the right car.

Thanks everyone for all your excellent feedback.

[mondie]

Slickhillsy said:

So what defines a 'bubble' and give us the current underlying drivers. I would wager there is a rational argument for all... Sure everything (cars / housing / fashion) it's all cyclical but a bubble (as most define it) describes a 'crash'. I just don't see it...

Make your own mind up on that. For me rapid price increases driven by investors is a good start, that's certainly what drove the boom I described in Australia. Once investors got wind that prices were on the up they started to pile in, as soon as the economy shuddered a little the investors started to bail out again as they were not car enthusiasts and had little emotional attachment.

[stain]

Rubystone, the finance deal is very attractive, I was shocked when my Ferrari dealer (a large one) told me 85% of all his new sales were financed ( he also explained that's probably why I wasn't offered a 458SA lol because I've never bought on finance!)


[/quote]

Funnily enough having priority on new releases was a carrot recently used on me to take up Ferrari's very expensive finance.

[70proof]

mondie said:

Slickhillsy said:

So what defines a 'bubble' and give us the current underlying drivers. I would wager there is a rational argument for all... Sure everything (cars / housing / fashion) it's all cyclical but a bubble (as most define it) describes a 'crash'. I just don't see it...

Make your own mind up on that. For me rapid price increases driven by investors is a good start, that's certainly what drove the boom I described in Australia. Once investors got wind that prices were on the up they started to pile in, as soon as the economy shuddered a little the investors started to bail out again as they were not car enthusiasts and had little emotional attachment.

it all comes down to the car..... classic art will never fall in value, rare, desired, enough buyers..... pick the right car, there are plenty of rich people out there that will keep its value up.

[70proof]

Camlet said:

70proof, as always much sense matey - I watched the TV show, thought it was surprisingly well made and both sales guys were impressive people and wonderful family guys.

camlet, did you see the programmes aired over two weeks on the thursday, not the russian/brandson/car exhange ones.... that was an eye opener and a half....

[red_duke]

Ferruccio said:

red_duke said:

It's far easier to determine the actual worth of modern cars. Their "value" is largely determined by their manufacturing cost. I.e. the sum of their parts. While I appreciate and would love to own say, a Ferrari 275 GTB4, I will never be able to reconcile their relatively low component value with their perceived value.

Isn't that like thinking about the value of the paint in a painting?

You make a good point. I will concede that design, engineering and technology combine to make a modern exotic worth more than the sum of its parts. But after that, any additional value is speculative and hard to fathom.

[Slickhillsy]

red_duke said:

Ferruccio said:

red_duke said:

It's far easier to determine the actual worth of modern cars. Their "value" is largely determined by their manufacturing cost. I.e. the sum of their parts. While I appreciate and would love to own say, a Ferrari 275 GTB4, I will never be able to reconcile their relatively low component value with their perceived value.

Isn't that like thinking about the value of the paint in a painting?

You make a good point. I will concede that design, engineering and technology combine to make a modern exotic worth more than the sum of its parts. But after that, any additional value is speculative and hard to fathom.

The perfect example of the difference between a buyer and an investor!

[_Leg_]

Buy em, drive em, enjoy em.

You can always make more money, you cant make more time, spend it wisely. Be dead soon, crack on.

[anonymous-user]

I'm only a little person with no knowledge of such matters, the scale boggles my mind, but...

Fantastic garage OP. I can't imagine what it must be like to look at them and think "yep, mine"...

[woppum]

Camlet said:

TISPKJ - agree, non car people are distorting the market, presume they'll all rush for the exit at the first hint of a possible major correction bloody guaranteeing one? Ajr550 - agree, predicting the market for someone like myself is impossible, but having had my 599 GTO out this morning for a blast, damn that car is a fabulous brute (makes my 458S seem like Sugar Ray Leonard to the 599 GTO's Mike Tyson), the 599 must be slated for greatness! 70proof, as always much sense matey - I watched the TV show, thought it was surprisingly well made and both sales guys were impressive people and wonderful family guys. Rubystone, the finance deal is very attractive, I was shocked when my Ferrari dealer (a large one) told me 85% of all his new sales were financed ( he also explained that's probably why I wasn't offered a 458SA lol because I've never bought on finance!) - 1m for a Daytona? Scary stuff. Sone, I think you nailed it, you're probably right that mid term nothing much will happen and who knows the effect of Dragonomics, which is four years late.

So think about a finance deal and have several bottles of Trappist Belgian beer chilled and ready for a very rapid journey into oblivion should a rush for the exit happen. First, find the right car.

Thanks everyone for all your excellent feedback.

Sound like you have good taste in cars. Took both the sopciale and GTO out today too.so very different cars.

[isaldiri]

Would agree with TISPKJ, it is the older dingy stuff being dragged up that will be really hard hit. The high quality blue chip stuff will likely not crater anything like the same way as the early 90s car prices. The number of people with serious amounts of money today is vastly more than 25 years ago and the numbers of the highly desired cars like the F40 has only gone down.

While I agree prices look like a bubble, they have also been that way for a while and the value of money has been continually eroded. How many billions have been pumped into the financial system since 2009? Only last thursday the ECB has finally cracked and will start printing ~1 trillion euros over 2 years and Japan is only going to crank up the monetary easing on their side (fat lot of good it has done them over the past 20 years but hey more of the same... ). The US might have stopped the qe on their side at long last but they are absolutely not about to reduce the Federal Reserve's balance sheet in a hurry. Well at least not unless they have gone raving mad.

it is usually near impossible short of pure blind luck to call the high in a bubble. Could prices go down from here? Yes certainly as the speculators are driven out (no bad thing imo) and that might actually be a good thing for a more sustainable market longer term but there are likely enough genuine enthuasiasts who will support the prices of cars like the 73 rs/288gto/f40/f50 i think if not at current levels, something not too far away from here either and i would be genuinely surprised to see something like a reversion to 10year prior prices.

Edited by isaldiri on Sunday 25th January 23:47

[belleair302]

The financial wizards are telling me to keep some cash to hand, markets will soon re adjust and a number of people are going to start feeling somewhat 'cash starved' because of reckless investments, slowing property prices and certain currencies falling....read Euro, US Dollar and BRIC. Oil will rise later this year but not hugely and the value of certain cars purchased in auctions will fall back. Collector cars will still rise as certain taxes bite but in my eyes the UK market has overheated with investors who will soon start to sell and canny buyers will find bargains.

Also with some exciting new cars out soon people will be moving into what's new, i.e. bonus bankers.....and off loading what is seen as last years 2014 car with under 3,000 or so.

In a word wait until mid summer and then buy whatever you wish at a better price than in Feb or March.

[toohuge]

I've been having similar discussions with friends of mine recently....

My point on this - I would sit and wait to see what happens to the car markets.

[z4RRSchris99]

70proof said:

it all comes down to the car..... classic art will never fall in value, rare, desired, enough buyers..... pick the right car, there are plenty of rich people out there that will keep its value up.

art also follows a cycle. So does wine, so do cars, so do most tax free investment classes

people who think these markets are not cyclical just contribute to their pace of downfall.

[isaldiri]

z4RRSchris99 said:

art also follows a cycle. So does wine, so do cars, so do most tax free investment classes

people who think these markets are not cyclical just contribute to their pace of downfall.

Of course it's cyclical, i don't think anyone is arguing it isn't. There have been people predicting the prices of exotics cars will crash for well over 5 years now, at some point they will definitely be right.... What's more in question is the scale of any decline in the medium term I suppose and how much that would bother the owner.

Camlet - I think the main issues if I were in your fortunate situation would be, could the funds to put to better use that would give as much pleasure of ownership and how much current values are affecting that pleasure of ownership at the moment.

I am lucky enough to have bought a car or 2 over the last couple of years just before the prices have moved up and have rather more than is sensible locked up in cars. However in the case of one, for various reasons there is literally nothing else short of a Mclaren F1 I would derive more out of owning so no matter what prices do (whether they fall 10%, 20%, back to the original price or to half of what I paid) I would not be greatly bothered. In fact I would actually be happier if the prices retraced a bit as I am somewhat uncomfortably aware that I am driving a car worth £X for example....

[priley]

Perhaps Rowan Atkinson's F1 sale is an indication that he for one thinks it's peaked.

[TISPKJ]

I am assuming reading the original post the question is do you sell the collection currently held and buy an F1.

All eggs in one basket is generally a bad idea, however if it is an F1 it becomes even more difficult to call as so collectable.

[WCZ]

the new ford gt is a safe buy as is the new gt3 rs if you can get one, imo

[TISPKJ]

WCZ said:

the new ford gt is a safe buy as is the new gt3 rs if you can get one, imo

I dont dissagree but think he was looking at promotion not relegation

[roygarth]

jw01 said:

I wouldn't read too much in to articles by Money week and the like - they are usually wrong!!

Money Week are notoriously scaremongery...especially in the Subscription Ad videos.

I've not got a clue on where prices are going, but I don't subscribe to the 'good stuff will stay high whilst the mediocre stuff will fall' school of thought. From 1988 to 1992 it all went up and down together in percentage terms.