What factors most influence the value of modern supercars
Discussion
Having had supercars since the 90s I would say the single biggest factor has been availability of cheap finance which has led to a corresponding explosion in supply (and over-supply). Cars such as F40's are an outlier as they were always undervalued and global collectors have long since woken up to this, but for an average V8 Ferrari or equivalent there is absolutely no rarity at all now.
Over the past ten years manufacturers have made unprecedented increases in numbers of cars (in the 90s it was very rare to see any Ferrari or Lambo, old or new) which corresponds with cheap and easy money.
This may well change going forward as all signs are the FCA is likely to apply much more stringent lending criteria similar to the mortgage industry based on stricter risk assessment. Where this leaves manufacturers who have tons more cars to shift with a dwindling audience (see multiple McLaren threads) will be interesting to watch. Those who study the business pages will see the quite serious issues a well known manufacturer is dealing with at the moment with cashflow all a result of over-estimating the market and audience.
Over the past ten years manufacturers have made unprecedented increases in numbers of cars (in the 90s it was very rare to see any Ferrari or Lambo, old or new) which corresponds with cheap and easy money.
This may well change going forward as all signs are the FCA is likely to apply much more stringent lending criteria similar to the mortgage industry based on stricter risk assessment. Where this leaves manufacturers who have tons more cars to shift with a dwindling audience (see multiple McLaren threads) will be interesting to watch. Those who study the business pages will see the quite serious issues a well known manufacturer is dealing with at the moment with cashflow all a result of over-estimating the market and audience.
DayaB said:
Hi, I am doing an essay for my A-Levels on the factors that influence the value of modern supercars the most. I.E. what causes them to appreciate/depreciate the most in price. Feel free to add useful input. Also how you would define a modern supercar would be useful.
Economic uncertainty/recession- 2008 prime example, everything car wise crashed in price, to the point where early Gallardos were available for £50,000- they are worth more today.Supply and demand theory (when I purchased my car, they were selling over list price due to lack of availability, when I sold it there was a large amount of cars for sale and not enough buyers and the prices crashed causing the values and residual to plummet (ouch, I’m still in pain from it)’
More the point above, limited cars such a GT model Porsche/certain Ferrari’s often attract a premium over list price and they hold their value well- the Ferrari 458 Speciale not that sought after when it was released, you didn’t have to be a buyer with massive buying history to purchase one but when Ferrari announced the model superseding it was not ‘naturally aspirated’ it created a huge demand for the model and hence prices went up a lot to over the initial list price and remain there today.....
The release of a ‘new model’ can cause heavy depreciation if the new model is better in terms of what it does/how it performs/looks better.
Hope these point helps.
I'd say a combination of brand strength, limited availability, looks and driving dynamics drive the market for supercars to a large extent. Brand strength and limited availability have the largest impact on value retention / value loss (e.g. a Louts might well be limited availability and an excellent driving tool, but still does not trade at the same premium as a limited Ferrari does [arguably not a supercar, so maybe less relevant for the comparison - an alternative example would be a Noble M600]).
Driving dynamics and looks also play a major role - stuff like a Speciale and GT Porsches are very good cars on top of being to an extent limited (while not all that limited). As an example, I would have thought a 550 Barchetta should trade at a much higher price when compared to say a F12 TDF if going purely by number of units produced (c 400 vs c 800), but it clearly does not (same applies to the 599 GTO which is also rarer than the TDF)
Cars also need a while to find their true value in the market, there are often very high premiums paid for getting an early car, which over time will deteriorate again.
As pointed out by a previous poster the overall market over the last decade was largely driven by cheap money and possibly a lack of good investment opportunities / might as well buy cars, watches etc if by bank account pays me zip
Driving dynamics and looks also play a major role - stuff like a Speciale and GT Porsches are very good cars on top of being to an extent limited (while not all that limited). As an example, I would have thought a 550 Barchetta should trade at a much higher price when compared to say a F12 TDF if going purely by number of units produced (c 400 vs c 800), but it clearly does not (same applies to the 599 GTO which is also rarer than the TDF)
Cars also need a while to find their true value in the market, there are often very high premiums paid for getting an early car, which over time will deteriorate again.
As pointed out by a previous poster the overall market over the last decade was largely driven by cheap money and possibly a lack of good investment opportunities / might as well buy cars, watches etc if by bank account pays me zip
The market is very different for different individual marques and individual products.
The depreciation profile for a GT3 RS Porsche is very different to a Porsche 911 Turbo S for example even though they are very similar on paper, and this is (IMHO) down to the perceived scarcity of the GT model even though they make thousands of them.
Whilst the overall market and availability of cheap credit has see a growth of the sector, within the sector some manufacturers are managing the future values better than others. The manufacturer has an important role to play with marketing and production numbers too. Enzo Ferrari used to say he will always make one less car than he can sell which set the foundations for their perceived exclusivity. McLaren and Aston Martin seem to take a very different view 'if we build them, the dealers will sell them.....!'. The over-supply by McLaren / Aston Martin (for example) leads to dealers discounting new cars, which leads to accelerated depreciation on the used markets, which leads to the view that they have a problem with depreciation, which leads to reduced demand, which leads to further discounts, and the cycle goes on...…
The depreciation profile for a GT3 RS Porsche is very different to a Porsche 911 Turbo S for example even though they are very similar on paper, and this is (IMHO) down to the perceived scarcity of the GT model even though they make thousands of them.
Whilst the overall market and availability of cheap credit has see a growth of the sector, within the sector some manufacturers are managing the future values better than others. The manufacturer has an important role to play with marketing and production numbers too. Enzo Ferrari used to say he will always make one less car than he can sell which set the foundations for their perceived exclusivity. McLaren and Aston Martin seem to take a very different view 'if we build them, the dealers will sell them.....!'. The over-supply by McLaren / Aston Martin (for example) leads to dealers discounting new cars, which leads to accelerated depreciation on the used markets, which leads to the view that they have a problem with depreciation, which leads to reduced demand, which leads to further discounts, and the cycle goes on...…
The Surveyor said:
The manufacturer has an important role to play with marketing and production numbers too. Enzo Ferrari used to say he will always make one less car than he can sell which set the foundations for their perceived exclusivity.
True. Ferrari used to be great at managing supply v demand.The key being "used to be". Now they are as bad as McLaren and Aston. (See 488 prices for evidence.)
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