Lag Time for Supercar Prices to adjust to Market Conditions

Lag Time for Supercar Prices to adjust to Market Conditions

Author
Discussion

Cheib

20,212 posts

139 months

Friday 10th April 2020
quotequote all
Drl22 said:
Obviously this is not completely representative but I had a pub quiz on zoom last night with around 12 friends, only one of them is not working and he was actually made redundant before COVID all kicked off. They are all good earners as well so perhaps this impact everyone is talking about isn’t going to be quite as wide and deep as everyone is led to believe by the media. I also had a call with my financial advisor who is still very much expecting (some would say hoping but I believe he is better than that) a V shaped recovery. It’s just tax planning he is worried about as we go about repaying all of this free money.

This isn’t to say supercars wont take a hit, they will do for a short while as people put their finances back in order and feel secure again but the hit to jobs, and this sounds terrible, is going to be at the lower end of the pay scales.
I think we’ll paid professionals working in say finance/banking, law, accountancy will largely come out of this out unscathed. People in more creative industries where spending is say more discretionary or those that own SME’s are generally going to have a really hard time.

My sister works in film production in NYC...she’s not working and not expecting to for six months so won’t be earning a penny. There are plenty of people around like that.

It’s actually people who were working in professional/relatively highly paid jobs like that who will potentially be hardest hit. Govt schemes aimed at the average worker, if you were earning say 3 or 4 times that even with mortgage holidays etc some tough decisions to make and the easiest one is not buying toys

GusB

259 posts

123 months

Friday 10th April 2020
quotequote all
For me as someone with a 599 who has been thinking about an F12 or 812 things have been put on hold, however when things start to normalise mine will have lost a % of X and the F12/812 will have lost a % of Y... and therefore man maths will rule once again...

Anyway, much more important things than prices to worry about. Hope everyone on here stays healthy and safe. GusB.

monthefish

19,761 posts

195 months

Friday 10th April 2020
quotequote all
Drl22 said:
Obviously this is not completely representative but I had a pub quiz on zoom last night with around 12 friends, only one of them is not working and he was actually made redundant before COVID all kicked off. They are all good earners as well so perhaps this impact everyone is talking about isn’t going to be quite as wide and deep as everyone is led to believe by the media. I also had a call with my financial advisor who is still very much expecting (some would say hoping but I believe he is better than that) a V shaped recovery. It’s just tax planning he is worried about as we go about repaying all of this free money.

This isn’t to say supercars wont take a hit, they will do for a short while as people put their finances back in order and feel secure again but the hit to jobs, and this sounds terrible, is going to be at the lower end of the pay scales.
It really does depend on how long 'lockdown' goes on for. In the UK at least, we're only just at 2 weeks which is nothing really, and if that's all it was, there would be little effect.
But the magnitude of this situation (i.e. Huge) multiplied by the magnitude of the duration (TBC) could result in a huge effect seen across a whole spectrum.

It is (or could be) like the house of cards effect. Although supercar prices may not be directly effected (although I think they will be), it's the knock-on effect of other factors that will have most impact.

jakesmith

9,032 posts

135 months

Friday 10th April 2020
quotequote all
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.

Lee Jones Jnr

967 posts

134 months

Friday 10th April 2020
quotequote all
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52

jakesmith

9,032 posts

135 months

Friday 10th April 2020
quotequote all
Lee Jones Jnr said:
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52
Alright, well £40k then

Lee Jones Jnr

967 posts

134 months

Friday 10th April 2020
quotequote all
jakesmith said:
Lee Jones Jnr said:
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52
Alright, well £40k then
Haha

sparta6

2,515 posts

64 months

Saturday 11th April 2020
quotequote all
Lee Jones Jnr said:
jakesmith said:
Lee Jones Jnr said:
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52
Alright, well £40k then
Haha
Mass market 911's will tank much more heavily

MisterBigglesworth

64 posts

12 months

Saturday 11th April 2020
quotequote all
TBH the Russian roulette of death by virus made me realise how unpredictable life can be, and it’s too short to worry about a retirement you might not live to see.

As soon as we’re out of lockdown i’m buying an F12 regardless of where the market is or if it loses money. I might not be alive to worry about it’s value next year so YOLO.


Lee Jones Jnr

967 posts

134 months

Saturday 11th April 2020
quotequote all
sparta6 said:
Lee Jones Jnr said:
jakesmith said:
Lee Jones Jnr said:
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52
Alright, well £40k then
Haha
Mass market 911's will tank much more heavily
Nah, not most models. 20 year old 911s start at what? £10k? There’s a limit to what they can lose.

sparta6

2,515 posts

64 months

Saturday 11th April 2020
quotequote all
MisterBigglesworth said:
TBH the Russian roulette of death by virus made me realise how unpredictable life can be, and it’s too short to worry about a retirement you might not live to see.

As soon as we’re out of lockdown i’m buying an F12 regardless of where the market is or if it loses money. I might not be alive to worry about it’s value next year so YOLO.
That's the correct outlook !

Chinese virus does not discriminate

sparta6

2,515 posts

64 months

Saturday 11th April 2020
quotequote all
Lee Jones Jnr said:
sparta6 said:
Lee Jones Jnr said:
jakesmith said:
Lee Jones Jnr said:
jakesmith said:
There will surely be potential buyers Who can no longer afford to buy, owners who can no longer afford to own / finance / maintain, and investors who need to cash out to cover lost income. I would anticipate some of the cars that have held steady for a few years now dropping maybe 25%ish. 360 Ferarri for £45k that sort of thing. Very expensive hobby those sorts of cars.
Well, let’s be honest, £45k for a 20 year old car that sold for £100k and which isn’t rare is still too much really.

Edited by Lee Jones Jnr on Friday 10th April 19:52
Alright, well £40k then
Haha
Mass market 911's will tank much more heavily
Nah, not most models. 20 year old 911s start at what? £10k? There’s a limit to what they can lose.
Owners of £10K cars can also become motivated sellers, quickly.
Unfortunate times ahead for many.
Time will tell

northo

2,370 posts

183 months

Sunday 12th April 2020
quotequote all
f1ten said:

This is the biggest global event we have ever seen in 90 yrs... Oecd says this is bigger than credit crunch of 08 which saw every single asset class get hammered...
Apart from classic cars.

Cheib

20,212 posts

139 months

Sunday 12th April 2020
quotequote all
northo said:
f1ten said:

This is the biggest global event we have ever seen in 90 yrs... Oecd says this is bigger than credit crunch of 08 which saw every single asset class get hammered...
Apart from classic cars.
Classic cars were relatively cheap in 2008.....not sure you could say that now. Market didn’t really start to catch a big until mid 2000’s and it wasn’t until low interest rates in 2009/10 that people started really piling into cars

sparta6

2,515 posts

64 months

Sunday 12th April 2020
quotequote all
Cheib said:
northo said:
f1ten said:

This is the biggest global event we have ever seen in 90 yrs... Oecd says this is bigger than credit crunch of 08 which saw every single asset class get hammered...
Apart from classic cars.
Classic cars were relatively cheap in 2008.....not sure you could say that now. Market didn’t really start to catch a big until mid 2000’s and it wasn’t until low interest rates in 2009/10 that people started really piling into cars
Classics produced in low volumes will always ride through a slump better than mass produced stuff.

There won't be many 206 GT Dino's available even in a deep recession. Perhaps a few 246's will pop up.

500 Miles

1,685 posts

190 months

Sunday 12th April 2020
quotequote all
GusB said:
For me as someone with a 599 who has been thinking about an F12 or 812 things have been put on hold, however when things start to normalise mine will have lost a % of X and the F12/812 will have lost a % of Y... and therefore man maths will rule once again...

Anyway, much more important things than prices to worry about. Hope everyone on here stays healthy and safe. GusB.
I’ve thinking along the same lines as you, if 812’s drop by a decent amount then I would be sorely tempted. Same with an Urus - at the moment both have quite large downside potentials.

ghost83

4,477 posts

154 months

Sunday 12th April 2020
quotequote all
Ferrari 328gts sold for 50k on collecting cars which is 20k cheaper than the cheapest 328 on autotrader (they range from 69-139k

Cheib

20,212 posts

139 months

Sunday 12th April 2020
quotequote all
sparta6 said:
Cheib said:
northo said:
f1ten said:

This is the biggest global event we have ever seen in 90 yrs... Oecd says this is bigger than credit crunch of 08 which saw every single asset class get hammered...
Apart from classic cars.
Classic cars were relatively cheap in 2008.....not sure you could say that now. Market didn’t really start to catch a big until mid 2000’s and it wasn’t until low interest rates in 2009/10 that people started really piling into cars
Classics produced in low volumes will always ride through a slump better than mass produced stuff.

There won't be many 206 GT Dino's available even in a deep recession. Perhaps a few 246's will pop up.
Possibly but we’ve never had an economic slump with classic cars valued like they are now. Sure the best cars and models made in the lowest numbers will always perform better but they won’t ignore it.

Personally I think that classic cars that can be used and enjoyed will do better than a car that is so mileage sensitive or just worth so much money it can’t be enjoyed. The latter are really just investments and in the next two or three years the opportunity cost of having a lot of capital tied up in a car is probably as high as it’s been in a generation.

Lee Jones Jnr

967 posts

134 months

Sunday 12th April 2020
quotequote all
500 Miles said:
GusB said:
For me as someone with a 599 who has been thinking about an F12 or 812 things have been put on hold, however when things start to normalise mine will have lost a % of X and the F12/812 will have lost a % of Y... and therefore man maths will rule once again...

Anyway, much more important things than prices to worry about. Hope everyone on here stays healthy and safe. GusB.
I’ve thinking along the same lines as you, if 812’s drop by a decent amount then I would be sorely tempted. Same with an Urus - at the moment both have quite large downside potentials.
Buying a Urus downsides - you would own a Urus

21ATS

302 posts

36 months

Sunday 12th April 2020
quotequote all
ghost83 said:
Ferrari 328gts sold for 50k on collecting cars which is 20k cheaper than the cheapest 328 on autotrader (they range from 69-139k
That car is LHD which will have some bearing on it's final price.