Lag Time for Supercar Prices to adjust to Market Conditions

[BlackR8]

mattt7 said:

People commenting on here that supercar prices will go up or stay the same are out of touch.
A lot of these cars are owned by business owners and on finance, business owners that are suffering on a unprecedented scale.you wait until the jobless claim numbers are released in the US this afternoon, it’s going to be horrible.

Before this crisis happened I’d never seen so many expensive cars on the road, 90% of which were financed. People saying that the BOE dropping rates to again will make all the difference, what utter rubbish, rates were and have been incredibly low for over 10 years now.
The finance bubble that has grown and grown is now ready to pop, business owners and individuals that scraped by every month paying the mortgage, finance on their everyday car, the wife’s car and their weekend toy will be defaulting left right and centre.

There is only one way for prices and that is down and down. I’d say that the supercar and classic market is looking at a 40-50% drop and this will happen over the next 6 months.

Prices of course will slowly go up again when the World gets back on its feet again in 12-18mths time but in the near term this is what will happen.

There will and already are behind the scenes some far cheaper special cars out there. A mint lhd Scuderia went for £103k this week, with its history and mileage that was a £150k car in Jan, likewise a very nice AM V8 Vantage went for something like £14k a few days ago.

A 40-50% drop? as much as that will hurt when it comes to my own cars I look forwards to being able to buy a Ferrari 458 for £50k-£60k if this turns out to be true.

[cgt2]

BlackR8 said:

A 40-50% drop? as much as that will hurt when it comes to my own cars I look forwards to being able to buy a Ferrari 458 for £50k-£60k if this turns out to be true.

I'm surprised cars like 458's and 997 Gen 2 have held up well for so long. These are now ten year old cars. At some point the romanticism of a normally aspirated engine becomes a myth (much as I love them).

[mattt7]

BlackR8 said:

A 40-50% drop? as much as that will hurt when it comes to my own cars I look forwards to being able to buy a Ferrari 458 for £50k-£60k if this turns out to be true.

Let’s see, I remember at the height of the financial crisis bidding in a Miura SV at Coys that sold for £160k in the end (god how I wished I’d gone the extra mile on that one)
I bought a UK black challenge straddle with 25k miles for £62 k off a dealer.
I also bought a UK 993 turbo in arena red with 42k miles for £44k and swapped that for a UK year 2000 Diablo SV with just 15k miles that I got for £64k.

So 458s for the money you’ve quoted are indeed possible depending on how bad and long the effects of this are

[garystoybox]

cgt2 said:

I'm surprised cars like 458's and 997 Gen 2 have held up well for so long. These are now ten year old cars. At some point the romanticism of a normally aspirated engine becomes a myth (much as I love them).

Couldn’t agree more and it’s not like these are particularly rare cars. Yesterday offered a lovely very low mileage Speciale which listed at £258k new for £245k.... basically my main dealer contact been on the phone and mentioned a client was desperate to free up cash. I always promised myself that I’d buy one of these when below list but difficult not to see these rapidly falling also to closer to £200k so I’ll be keeping my cash in the bank for now.
Will be keeping the 488 spider for a while as likely worthless but might be tempted by a sub £200k 812, which can’t be far away. I guess for anybody swapping their toys the cost to change won’t have really changed but I do wonder how the finance companies will be hit by the negative equity on financed cars. Many people who have bought supercars will never ever want to again if the pain is too bad this time which will lessen supply all the more. 911 GT3 must be due a major correction given the amount registered also and would make a nice buy at £50-60k.

[footsoldier]

People need to remember that a few years ago cars like 430s were at 60-70k, 997 GT3s at 50k, 996RS at 69k, etc and all sat there for a long time. There were c250 430s for sale at one point in 2009.

[mattt7]

footsoldier said:

People need to remember that a few years ago cars like 430s were at 60-70k, 997 GT3s at 50k, 996RS at 69k, etc and all sat there for a long time. There were c250 430s for sale at one point in 2009.

Indeed I remember many a 996 GT3 RS just gathering cobwebs with dealers for very little money at all, in fact I know you could get good UK cars at the time with low mileage around the £50-55k mark at one point and you had many to choose from

[Cheib]

DK have advertised an 812 Superfast for £245k....a price they say is attractive enough for the car to be “bought blind” to quote their Insta post.

https://www.pistonheads.com/classifieds/used-cars/...

Does look like a cheapish car in context of the market two weeks ago....not sure that means it is cheap now though. Maybe the seller is being savvy and seeing if as “first mover” they get anywhere. I remember a couple of months ago DK advertised what looked like a really aggressively priced 612....didn’t sell so after a month they put it up to £120k....cheap cars hanging around on classifieds isn’t good for business.

[jonah35]

6-9 months

Around Xmas to January even

When the market opens up again people will keep the prices similar but then they will tumble

They’re going to halve no doubt about it

All these investment cars are like a hot potato

[andy97]

jonah35 said:

6-9 months

Around Xmas to January even

When the market opens up again people will keep the prices similar but then they will tumble

They’re going to halve no doubt about it

All these investment cars are like a hot potato

I shall look forward to the 20k decent R8 then!

[Helicopter123]

andy97 said:

jonah35 said:

6-9 months

Around Xmas to January even

When the market opens up again people will keep the prices similar but then they will tumble

They’re going to halve no doubt about it

All these investment cars are like a hot potato

I shall look forward to the 20k decent R8 then!

I wouldn't call a £40k R8 an investment car though, that's a car for driving.

It's you limited edition garage queens that are likely to take a hit, although when the QE money starts finding a home I'm sure these cars will be in high demand again.

[andy97]

Helicopter123 said:

I wouldn't call a £40k R8 an investment car though, that's a car for driving.

It's you limited edition garage queens that are likely to take a hit, although when the QE money starts finding a home I'm sure these cars will be in high demand again.

Oh I agree. And I would be buying to drive. But if the garage queens go down then I assume most things will to some extent.

[Drl22]

Cheib said:

DK have advertised an 812 Superfast for £245k....a price they say is attractive enough for the car to be “bought blind” to quote their Insta post.

https://www.pistonheads.com/classifieds/used-cars/...

Does look like a cheapish car in context of the market two weeks ago....not sure that means it is cheap now though. Maybe the seller is being savvy and seeing if as “first mover” they get anywhere. I remember a couple of months ago DK advertised what looked like a really aggressively priced 612....didn’t sell so after a month they put it up to £120k....cheap cars hanging around on classifieds isn’t good for business.

I’ve just been looking at this and agree, this probably isn’t all that cheap as compared to where it will be in 3-6 months. Probably a clever tactic to actually get rid now rather than a worse price later. I want one of these but am going to hold tight and see what happens for now.

[RSbandit]

Hmm so we can look forward to the £70k 720S in 6 months time...where do I sign although I won't be holding my breath

[MDL111]

RSbandit said:

Hmm so we can look forward to the £70k 720S in 6 months time...where do I sign although I won't be holding my breath

My theory is that cars like the 720 have already been hit hard, partly due to the fact that they depreciate a lot quickly (self perpetuating to a degree). I think once cars that are supposedly “a safe place for your money” like a 458 or Porsche GT3 start to depreciate more quickly, then the 720 (and pretty much all McLarens) will look relatively speaking more attractive as “everything depreciates”. Then the used ones might even depreciate a little less quickly than the others as they have already taken a big hit and stuff like tech, carbon tub, performance etc becomes more relevant again (which nowadays does not seem to be sufficient to counter the depreciation argument for many people).

I did not phrase that as clearly as I wanted to ....

[LooneyTunes]

Even In the absence of forced sales, you have to wonder what effect PCPs reaching end of term is going to have.

Faced with a choice of pay the sizeable balloon, trade in for a new one, or walk away, what would you do?

Would expect that the majority of sales of new cars are March - early summer, so possibly a few cars that might otherwise have been kept coming on to the market?

[Drclarke]

RSbandit said:

Hmm so we can look forward to the £70k 720S in 6 months time...where do I sign although I won't be holding my breath

I agree, And all these people waiting for huge price drops are going to be disappointed, and for that I am glad as it’s extremely poor taste in hoping that others have to sell their cars so that they can put food on the table.

[mattt7]

Drclarke said:

I agree, And all these people waiting for huge price drops are going to be disappointed, and for that I am glad as it’s extremely poor taste in hoping that others have to sell their cars so that they can put food on the table.

I’m sorry but I can’t see how selling a £120k toy is the same as putting food on the table, it’s very much a luxury item. Also most of these toys are financed and not owned outright, people could never really actually afford to own them in the first place.

Maybe you won’t see a £70k 720s but having lived and learned through a few of these things now you definitely will see a 720s under £100k. And I honestly don’t see £70-80k at an auction down the line being out of question in the worst case scenario.

And if you’re cash and have been patient you will pick up some bargains. I don’t see the harm in that

[r o n n i e]

mattt7 said:

And if you’re cash and have been patient you will pick up some bargains. I don’t see the harm in that

I can understand why some people find this distasteful as one man’s bargin is another man’s misfortune in these circumstances.

You are literally suggesting preying / being patient on a seller to take advantage of covid - a completely unplanned and on a personal level, unforeseeable event when the buyer bought their car.

I saw in some post 90% are financed - I was shocked how high it was but then I’m also ignorant in my cash bubble.

[Drclarke]

mattt7 said:

I’m sorry but I can’t see how selling a £120k toy is the same as putting food on the table, it’s very much a luxury item. Also most of these toys are financed and not owned outright, people could never really actually afford to own them in the first place.

Maybe you won’t see a £70k 720s but having lived and learned through a few of these things now you definitely will see a 720s under £100k. And I honestly don’t see £70-80k at an auction down the line being out of question in the worst case scenario.

And if you’re cash and have been patient you will pick up some bargains. I don’t see the harm in that

No need to apologise, but what I am trying to convey is that people are like vultures waiting for others misfortune to swoop in.

[MDL111]

How is sharing experience from past market corrections and then making educated guesses about the current market in poor taste?

The majority of my money is in cars and I am not offended by people discussing them falling (guess what, they have been falling in value for a while and will continue to do so - it is what sports-/supercar ownership was pre-2014 and it will be the same again in the future)

People regularly posting how safe your money is in various Porsches and Ferraris without any dissenting voices is much worse imo as somebody might actually believe they can own a car for very little loss just because it was that way for the last 4-5 years. I imagine some people who took that advice and thought “worst case my (perfect resale spec) 458 is going to cost me 20-30k for 2 years, so I’ll finance it with little equity” might be feeling rather like they shouldn’t have taken that advice at face value if they have to liquidate now to pay for other stuff / not getting paid because self-employed etc etc