Correction Coming?

[Big Ry]

So then, crystal ball time.

What’s peoples general thoughts on values of ALL premium marques of late ?

With all the headwinds facing the world at the moment, do people think things will carry on as is asset value wise, or are there stormy times ahead ?

I’ve been keeping an eye out for some new wheels, and am struggling to understand the prices of some stuff, and personally can’t help thinking that a correction can’t be too far away.

Just look at a 992 C2S……….dealers are asking the same for a 2 year old one than a new one…..which is madness. semi-conducted shortages or not, I just don’t get it (and no, I don’t want a 992).

Inflation, plunging stock markets, war, energy and fuel prices, cost of living crisis………surely luxury cars can’t be immune to all of this ?

Anyway, keen to know what other people think too.

[Graze01]

Ry

I cant understand it either, share markets are still very buoyant, asset prices are still up (houses, cars etc ) both here (Australia) and the US and I expect UK as well.

Inflation is on the rise worldwide from shortages, shipping issues etc and now war (where will that go?)

I cant see them staying up

History would suggest that as soon as inflation really bites & world central banks have to increase rates (I understand the UK has started, unlike US & Aus), property will stall, markets should fall, margin loans will get called in and suddenly cars will start being offloaded because people need money

but maybe central banks will just keep flooding the world with cheap money & governments will double down on debt & stimulus and the merry go round will keep going???

or war will save the world economy? is that even possible?

So maybe I'm wrong

Graze

[Ian187]

I wondered the same before just buying my Vantage...
Reports from KPMG in US suggested there could be a correction of 20 - 30% (but this was not the premium marques).
Other reports suggested a much more likely 3% correction (over the next couple of years).

My own thoughts were that people buying luxuries are not affected in the same way as standard cost of living items and the price of petrol etc. isn't going to stop me driving a 5L car, however saying that I think the price of luxury cars 10 years ago started going up considerably, not because of chip shortage etc. but because inflation was low, so people with savings were putting their money into cars (and paintings etc.)..

Now inflation is going up, there undoubtedly will be people with expensive cars in the garage not being used and they decide to cash in and put the money in a savings bond or offset against mortgage etc. An increase in cars on the market will drop prices, but personally I think it will organically drop steadily potentially down to a pre-pandemic level, rather than a panic..

So all in all, my conclusion is, yes prices will probably come down, but I don't think they are going to crash. Yes maybe the sensible thing is to wait a bit before committing to a luxury expense, but then buying an Aston Martin (or other Marque) is difficult to argue as a sensible financial decision even in this forum

Edited by Ian187 on Saturday 5th March 08:38

[geresey]

Possible example? Very nice car by the way, love the ceramic grey

[Jon39]

Ian187 said:

My own thoughts were that people buying luxuries are not affected in the same way as standard cost of living items and the price of petrol etc. isn't going to stop me driving a 5L car, however saying that I think the price of luxury cars 10 years ago started going up considerably, not because of chip shortage etc. but because inflation was low, so people with savings were putting their money into cars (and paintings etc.)..

I can never tell what is going to happen in the short-term with financial markets, or economies.
All I can offer is an historic observation.


Andy Palmer at the IPO time, said AML was a luxury goods business and therefore would not be affected by boom and bust.

Go further back to 2008, the banking crisis. The 4.3 Vantage was at run-out time, prior to the introduction of the 4.7. Customers were cancelling orders, some 4.3 models were eventually sold a year after being built, Gaydon production fell considerably and employees were made redundant.

So much for not being affected. Possibly not all Aston Martin buyers are ultra wealthy, but there was also another aspect during the 2008 financial crash. With so many people facing hardship, many wealthy people did not want to be seen with brand new expensive cars.

[Finding Neutral]

Who knows. Markets go up and down all the time.

I didn’t buy an Aston Martin with much care for values tbh. They’re never really an investment with how much they cost to run anyway. If it drops, it drops. If it goes up, it goes up.

People that buy them thinking “investment” roll the dice of luck. If they drop, most other vehicles drop as well. You’re only really up st creek if you’ve got everything financed up to the eye brows or you’ve stuck in loads of cash that you shouldn’t have on something that was grossly overinflated in the first place. I tend to think some Porsche GT owners 991> have been stung by this over recent years.

Edited by Finding Neutral on Saturday 5th March 10:33

[hornbaek]

Finance cost will rise significantly due to increased risk. That will drive down demand as less people will be inclined to use finance (or be able to afford higher rates) - so yes, we will have price falls across the board. Right now prices are held up artificially due to supply chain issues but that will eventually be taken over by a decline in demand and then prices will adjust on a much lower level. The boom is definitely over.

[AdamV12V]

Ive been feeling there is a huge correction / recession coming since the middle of the Covid crisis, yet we have not only recovered but seem to have a crazy mini boom! Driven I think by all the free money generated for some people by both gov subsidies and increased saving when things were shut down.

That said all bubbles burst eventually and without doubt the war situation is a huge additional pressure on top of all the other dynamics at play, so yes I feel more sure than ever a correction is coming.

Just pay what you are comfy with for a car, and keep it forever this time

Then it really doesn't matter what its worth, as long as you were happy at the time of purchase.

[Dewi 2]

AdamV12V said:

Just pay what you are comfy with for a car, and keep it forever this time

Then it really doesn't matter what its worth, as long as you were happy at the time of purchase.

I have been used to keeping my old cars (I always try to look after them, so at the eventual replacement time, the condition is far better than the few hundred Pounds they could be sold for).

When buying my Aston Martin, I was just pleased to find the exact specification that I wanted, in as new condition and at half list price. I did not give a thought to depreciation (other than the 50% which the original owner had lost), because with a keeper it is not important.

Being my first 'exotic', I just assumed it would eventually depreciate to £1,000, like other cars.
I eventually realised that Aston Martin owners do exceptionally well regarding depreciation. After 10 years, my car is supposedly still worth quite a lot. For example, 20 year old Astons seem to be worth far more than old Jaguar sports cars.

With keepers though, enjoyment of the vehicle is all that really matters.
Buy at 3 years old, if you are a bit --- fill in your chosen word ---, like me.