Supercar valuations. Stick or twist?
Discussion
Like most of us here, I have my cars because I love driving them (and like most of us here I do thank heavens every day for being fortunate enough to be able to do this).
I don't have them as investments. If they appreciate, great. If they go sideways, it is what it is. In truth that's because I've not experienced a serious market reboot. Yes, my 550 dropped to £ 25K trade at its lowest point back in 2002. But while in % terms it was bloody ugly, in absolute terms it wasn't " complete raving lunatic idiot tirade from wife" level.
But I've another damn itch for another motor, and this tipo has already seen its values climb sharply like many other types. It's up there in nose bleed territory (for me very high six figures). While I wouldn't buy as an investment, I wouldn't want to see a huge chunk of cash disappear either. Life will seriously not be worth living c/o Mrs Camlet.
In this week's Money Week there's an excellent but eyebrow raising article about the "Great Unwinding", how the world is entering a sustained period of deflation and why it's driven by significant changing economic strategies in China and from global supply outstripping global demand due to significant demography change in Western markets.
To me it reads to me that many bubbles are facing the same massive and fast correction that the oil market has just seen, but while the train is truly on its way (the article is very sadly very compelling) we lay people will not see its lights until it hits.
Head firmly says stick. Another part of the anatomy says possibly otherwise.
Thoughts, opinions and insights very gratefully received. Cheers.
I don't have them as investments. If they appreciate, great. If they go sideways, it is what it is. In truth that's because I've not experienced a serious market reboot. Yes, my 550 dropped to £ 25K trade at its lowest point back in 2002. But while in % terms it was bloody ugly, in absolute terms it wasn't " complete raving lunatic idiot tirade from wife" level.
But I've another damn itch for another motor, and this tipo has already seen its values climb sharply like many other types. It's up there in nose bleed territory (for me very high six figures). While I wouldn't buy as an investment, I wouldn't want to see a huge chunk of cash disappear either. Life will seriously not be worth living c/o Mrs Camlet.
In this week's Money Week there's an excellent but eyebrow raising article about the "Great Unwinding", how the world is entering a sustained period of deflation and why it's driven by significant changing economic strategies in China and from global supply outstripping global demand due to significant demography change in Western markets.
To me it reads to me that many bubbles are facing the same massive and fast correction that the oil market has just seen, but while the train is truly on its way (the article is very sadly very compelling) we lay people will not see its lights until it hits.
Head firmly says stick. Another part of the anatomy says possibly otherwise.
Thoughts, opinions and insights very gratefully received. Cheers.
You only stand to make a loss when you sell it. If you're passionate about your prospective purchase then you'll be keeping it and avoid any loss.
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.
Don't get me started on house prices!
Would love to know what you're considering buying but I guess that's top secret as you don't want do drive the price up!
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.
Don't get me started on house prices!
Would love to know what you're considering buying but I guess that's top secret as you don't want do drive the price up!
In my opinion it's the old crap that will be worst hit, some of the prices being asked for mondials 348's 911,s SL merc, and all manner of other stuff is just crazy, people have very short memories is all I will say and prices are being driven up by the nice stuff (like yours).
F40 - keep or sell ? Difficult one.
The market is also being driven I think by non car people as in you can get virtually no return on cash so may as well have some fun instead and buy a nice sports car.
I was reading last week ( and dependant on Greek election tonight) that 10 yr euro government bonds are still at 1% or something so it looks like no return for a long time yet.
F40 - keep or sell ? Difficult one.
The market is also being driven I think by non car people as in you can get virtually no return on cash so may as well have some fun instead and buy a nice sports car.
I was reading last week ( and dependant on Greek election tonight) that 10 yr euro government bonds are still at 1% or something so it looks like no return for a long time yet.
I have given up trying to predict the market (I passed on 2 599 GTO's two years ago on basis they would depreciate too much !) but I do feel we have reached the current high point.Results at Scottsdale auctions this month generally seem to support this view.
More recent Ferraris seem to be the exception though (288 GTO's in particular).
More recent Ferraris seem to be the exception though (288 GTO's in particular).
z4RRSchris99 said:
can someone plot an inflation adjusted graph of 250gto / F40 / etc values
you'll see were in the same boat as the last big bubble & correction
but are we.....you'll see were in the same boat as the last big bubble & correction
camlet, having recently watched the super-rich series on BBC, I think the question becomes is the car something the super-rich would aspire to own, if so I think values are safe....
these guys are getting richer and richer, and make money from crashes/bubbles bursting..... so unless you pay absolutely crazy money then I think a car they would buy is safe....
any car whose value is supported by the middle classes/well off may be vulnerable.....
FWIW I sold all my cars end last year
I was happy with what I got
I think for most people, if you really think about it, if their cars did tank in value they would be disappointed
Most of us here wouldn't just shrug it off
As to the state of the market, and I like to think in my private life and ,my work I understand a fair bit about the markets, but clearly I am no expert, I just don't see value in a lot of cars and at some point in the next 12m there is a correction coming
It just bought something new as a stop gap while we see what happens
If I am wrong then so be it. I'm happy with what I got for my cars. If I am right then I look forward to buying some more some time at more realistic prices
I was happy with what I got
I think for most people, if you really think about it, if their cars did tank in value they would be disappointed
Most of us here wouldn't just shrug it off
As to the state of the market, and I like to think in my private life and ,my work I understand a fair bit about the markets, but clearly I am no expert, I just don't see value in a lot of cars and at some point in the next 12m there is a correction coming
It just bought something new as a stop gap while we see what happens
If I am wrong then so be it. I'm happy with what I got for my cars. If I am right then I look forward to buying some more some time at more realistic prices
70proof said:
but are we.....
camlet, having recently watched the super-rich series on BBC, I think the question becomes is the car something the super-rich would aspire to own, if so I think values are safe....
these guys are getting richer and richer, and make money from crashes/bubbles bursting..... so unless you pay absolutely crazy money then I think a car they would buy is safe....
any car whose value is supported by the middle classes/well off may be vulnerable.....
Yes we are, camlet, having recently watched the super-rich series on BBC, I think the question becomes is the car something the super-rich would aspire to own, if so I think values are safe....
these guys are getting richer and richer, and make money from crashes/bubbles bursting..... so unless you pay absolutely crazy money then I think a car they would buy is safe....
any car whose value is supported by the middle classes/well off may be vulnerable.....
you have a lambo, in 2008 they were 40/45k starting, now they are 55k same car more miles, 6 years later, for a mass produced lambo
you will take a bath when the correction happens
Having a few quid tied up in cars this thread intrigues me.
Firstly we talk about corrections in the housing market! Has this really happened or just flatlined and awaiting the wages to catch up ( apart from London which is full of billionaires)
What effect will all the money being pumped into Europe have on us, I assume only positive as exports for us should increase!
Lastly cars, surely these are driven to an extent by both the above, so in the short to medium term surely not much is going to happen.
Steve
Firstly we talk about corrections in the housing market! Has this really happened or just flatlined and awaiting the wages to catch up ( apart from London which is full of billionaires)
What effect will all the money being pumped into Europe have on us, I assume only positive as exports for us should increase!
Lastly cars, surely these are driven to an extent by both the above, so in the short to medium term surely not much is going to happen.
Steve
SimonMorris said:
and at some point in the next 12m there is a correction coming
Interesting statement this? Care to share what your crystal ball said? All this 'doommongery' does make me laugh. Sure there is nothing wrong with being cautious but market indicators just don't show signs of anything bursting. The same could be said about fine art and wine (from an investment point of view) yet there things are just as buoyant and again no bubble sight. Cheap money (and the fact that one day that will stop due to interest rates) is a fair reason for concern (as it was the main driver for the last crash) however less of the car market is leveraged.
There was an interesting thread here some weeks back asking how most people financed their cars, most in this super car section said they (like me) didn't have finance / had bought outright. If you're in the market people have more access to cash than before and some see it better sat polished in their garage than earning 0000.1% is some account.
One thing is certain however... Nothing remains constant and the 'longer' term view as interest rates do creep up would be a slow down / easing off. But a bubble bursting I, personally I would say not...
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?It will burst as all bubbles do. When I lived in Australia through the period 2001-2009 there was a massive bubble in the rices of Australian muscle cars, the most revered of which is the Ford Falcon XY GTHO Phase 3. We bought one in 2005 for $230k and watched its value skyrocket to in excess of 3x what we paid. I sold it for a good price on the down slope as we were moving; now that same car is worth around what it was in 2005/6. It may be another decade before memories fade and the whole cycle kicks off again.
Price in the UK have moved up massively and very quickly since we moved here, things look much the same as I observed back in Australia. There are many differences between the two markets but the underlying drivers are the same and i don't see why this will end any differently.
Price in the UK have moved up massively and very quickly since we moved here, things look much the same as I observed back in Australia. There are many differences between the two markets but the underlying drivers are the same and i don't see why this will end any differently.
Camlet said:
Like most of us here, I have my cars because I love driving them (and like most of us here I do thank heavens every day for being fortunate enough to be able to do this).
I don't have them as investments. If they appreciate, great. If they go sideways, it is what it is. In truth that's because I've not experienced a serious market reboot. Yes, my 550 dropped to £ 25K trade at its lowest point back in 2002. But while in % terms it was bloody ugly, in absolute terms it wasn't " complete raving lunatic idiot tirade from wife" level.
But I've another damn itch for another motor, and this tipo has already seen its values climb sharply like many other types. It's up there in nose bleed territory (for me very high six figures). While I wouldn't buy as an investment, I wouldn't want to see a huge chunk of cash disappear either. Life will seriously not be worth living c/o Mrs Camlet.
In this week's Money Week there's an excellent but eyebrow raising article about the "Great Unwinding", how the world is entering a sustained period of deflation and why it's driven by significant changing economic strategies in China and from global supply outstripping global demand due to significant demography change in Western markets.
To me it reads to me that many bubbles are facing the same massive and fast correction that the oil market has just seen, but while the train is truly on its way (the article is very sadly very compelling) we lay people will not see its lights until it hits.
Head firmly says stick. Another part of the anatomy says possibly otherwise.
Thoughts, opinions and insights very gratefully received. Cheers.
Perhaps Paul Hodges ( who was interviewed for the feature you mention ) is considering getting himself a 275 and fancied one at a lower price !I don't have them as investments. If they appreciate, great. If they go sideways, it is what it is. In truth that's because I've not experienced a serious market reboot. Yes, my 550 dropped to £ 25K trade at its lowest point back in 2002. But while in % terms it was bloody ugly, in absolute terms it wasn't " complete raving lunatic idiot tirade from wife" level.
But I've another damn itch for another motor, and this tipo has already seen its values climb sharply like many other types. It's up there in nose bleed territory (for me very high six figures). While I wouldn't buy as an investment, I wouldn't want to see a huge chunk of cash disappear either. Life will seriously not be worth living c/o Mrs Camlet.
In this week's Money Week there's an excellent but eyebrow raising article about the "Great Unwinding", how the world is entering a sustained period of deflation and why it's driven by significant changing economic strategies in China and from global supply outstripping global demand due to significant demography change in Western markets.
To me it reads to me that many bubbles are facing the same massive and fast correction that the oil market has just seen, but while the train is truly on its way (the article is very sadly very compelling) we lay people will not see its lights until it hits.
Head firmly says stick. Another part of the anatomy says possibly otherwise.
Thoughts, opinions and insights very gratefully received. Cheers.
Surely the general basis of any form of transaction is the level of supply V demand and on the basis that they don't make classic cars any more ( the global supply you mention is for oil and there's always plenty of that !) and the world population ( of affluent people, who may be interested in buying ) continues to increase I can't imagine that the formula would produce a loss ( on sale ) in the medium/long term.
Add to that the factor of enjoyment of use and the "returns" can be calculated/designed in a way to justify any purchase !
I'll be interested ( over the next ten years ) if the adage of "you can't pay too much you can only buy too soon" remains - I suppose you could utilise this in a sales situation by selling too soon - as I did by selling four 911 2.7 RS Carrera's seven years ago !!!
mondie said:
It will burst as all bubbles do. When I lived in Australia through the period 2001-2009 there was a massive bubble in the rices of Australian muscle cars, the most revered of which is the Ford Falcon XY GTHO Phase 3. We bought one in 2005 for $230k and watched its value skyrocket to in excess of 3x what we paid. I sold it for a good price on the down slope as we were moving; now that same car is worth around what it was in 2005/6. It may be another decade before memories fade and the whole cycle kicks off again.
Price in the UK have moved up massively and very quickly since we moved here, things look much the same as I observed back in Australia. There are many differences between the two markets but the underlying drivers are the same and i don't see why this will end any differently.
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...Price in the UK have moved up massively and very quickly since we moved here, things look much the same as I observed back in Australia. There are many differences between the two markets but the underlying drivers are the same and i don't see why this will end any differently.
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