MP4 prices are really plummeting on resale

No just read about it, but I have driven a MP12, and driven any number of other viceral cars of which the MP12 is not one. From what i have read about a F1 and a MP12 they are very very different.

 

What he said, and he has driven one, as has Mr Bean aka Rowin Atkinson and a handful of other people who have driven both and have the same thing to say.

 

You can't have a car that is meant to be a decent Daily Driver And expect it to be heart racing every time you drive it. The Mclaren 12C is designed to be a DD, a long distance car, AND a track car. It isn't aimed at the Ferrari/Lambo crowd that want exotic sounding car for short drives on the weekend. I know of 3 Mclaren's(on the net) who have 15K+ miles on them. Can you show me a 2011 or 2012 F458 with that much mileage on it.

Regarding resale: The ONLY Ferrari that has great sale is the F458 coupe/spider. The California, 599 and FF haven't done as well. Granted they might not be losing 25% in a year but they aren't going to be the "investment" that the F458 is.

 

But Mr. Bean doesn't say ANYTHING!

 

I am not so sure the 458 is such a great deal, all in - here in Dallas it is not cheap to be a member of the inner circle who can actually buy a 458 new, or you have to pay a premium over sticker that I doubt you get back on resale. As the 458 winds into production year 4, I also suspect market saturation and resulting depreciation are about to kick in, just like the generations before it.

 

Already 3 2013 spiders for sale at Cars.com. 2 of which appear to be at MSRP and one appears to be with delivery miles. 289K is about 80K less than you can get a used 458 spider right now. That's a DEAL. I'm totally serious here... If I knew they would not drop much more I'd be tempted.

On the negative, there are now 4 2012 coupes asking under 199K. Ouch.
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The first one is AWD. Huh, really? :banghead:

 

That is alot of car for the money.

 

The Woking-based firm touts "Pure McLaren" as a mantra. And that's what it should've been. A $229k MSRP (pre-TTL), perhaps $10k-$15k (at the most) of optional trim, equipment, and such. A ~$240k 12C. Which seemingly would be ~$200k now in the marketplace. That's $20k/annum depreciation for 2-years ownership; 7%-8% per-year if you will. Call it smiles-per-miles.

Bloat-builds w/ MSRP-creep are what is seemingly self-punishment for the early adopters. The HS bits, MSO stuff, GT3 parts, etc along w/ copious personalization are nice, but when residuals in the near term aren't within expectations, it's not as much as the 12C's fault as it is the actual esoteric & haughty build ($275k? $285k? $295k? ).

A near $300k build on a base $229k is destined for depreciation via market correction. Just as $35k C-Class spec'd up to $55k, a $40k 3-series spec'd up to $65k, a $20k Accord spec'd up to $35k, a $80k 911 spec'd up to $125k, etc.

Sometimes, K.I.S.S. is the way to go...

Lastly, all these '12 12Cs diverted stateside (due to whatever circumstances) should've been marketed for New Delhi & Mumbai & Bangalore, Cape Town & Durban not just Johannesburg, Riyadh not just Jeddah; Sao Paulo & Rio & Panama City & Mexico City & Monterrey & San Juan; BC & Alberta & Quebec not just Ontario; Seoul & Kuala Lumpur & Shanghai & Beijing & Guangzhou; Melbourne not just Sydney; Amsterdam & Warsaw & Prague & Moscow & St. Petersburg. And another close-to a dozen dealers/satellite-showrooms in the U.S. (Houston, Seattle, Las Vegas, DC, Phoenix, Pittsburgh, Atlanta, St. Louis, Detroit, Raleigh-Charlotte).

I see strong future/long-term valuation, regardless.

Kinda-sorta easy being arm'chair QB...

 

Question: What happens if I walk into a Ferrari dealer tomorrow and try to buy a new 458 Spider, having never bought a Ferrari before, and then drive it 15K miles in the first 3 years? How much money did I lose? Probably comparable to the 12C 2 years from now.

The depreciation will be dulled if you just keep the car a few more years and drive it regularly. The depreciation should slow tremendously. A 12C will not be $150K next year or $100K in 2 years. 3 years from now I think the a 2012 will be $150-160K. If your spec was $260K then you lost $100K over 4 years which really isn't going to be that bad compared to high-spec 2010 458 if you paid sticker. If you had to pay over sticker, it will probably be the same. Might not seem fair to compare a 2010 458 to a 2012 McLaren, but I bet you'd get punished much worse for miles on a Ferrari than a McLaren -- most of the 2010's I see on eBay have like 5K miles on them!

12C depreciation encourages you to keep the car and drive it. 458 prices encourage you to sell soon and barely drive it.

Also, at least you can walk into any McLaren dealer and buy any model with any spec at MSRP no questions asked, and get it reasonably quick. Try that with a 458 Spider.

 

BTW, I question the idea that McLaren will die if they can't stop depreciation. Bentley and RR probably lose $100K in the first 2-3 years but they are still around. AMG Mercedes get crushed. Aston Martin has terrible resale. A 991 is already $20K under MSRP after 1 year. None of these companies seem to have any problems selling new cars even with massive amount of used inventory available at deep discounts.

Depreciation is bad, but no one seems to be telling that to Bentley, RR, AM, or AMG, let alone their customers.

McLaren doesn't have all that product platform synergy and cost savings that those compaies do I suppose. Either way, they will not go out of business. The brand is quite valuable, as is their technology. McLaren will be bought by VW before it goes under.

 

I very much agree with your thoughts.Plus I think future engine supplier Honda
can bring some synergies as well as make a high revving engine on par with Ferrrari

 

The MP4-12C engine revs to 8500, the 458 to 9000 - I'd call both high-revving and F1 is going to mandatory smaller displacement turbo engines, so I'd say a twin turbo engine has a valid place in a vehicle produced by any company with a serious F1 presence and connection.

I'd be willing to wager that Ferrari produces a turbo engine in the next generation that replaces the 458. In today's world they can't just keep upping displacement (and increased revs are unlikley to give the the bump they need to get to at least 625 hp to eclipse the MP4's 616 hp).

 

Or how about KERS appearing on a V8?

 

I keep telling you guys... McLaren did only one thing wrong -- they made and shipped too many cars.

If they had made 30% less of them, there would not be extra 2012 inventory, there would not be dealers doing 30K off MSRP on cars on the showroom floor, and everyone would be screaming for them.

This is not a fault of the car. It's the fault of the higher ups in Woking. And, it did not need to happen.

McLaren right now could be saying to it's new customers -- it isn't just Ferrari that holds it's value. Unfortunately, they can't. Anyone shopping for a new one now must be looking at what's going on in the used market. There are some great bargains out there.

Dropping resale values not only hurts early adopters, it places more pressure on them to produce a new 911 fighter model at a lower price point in 2 years. Why buy a lesser car at $150K when good, low mileage Mp4-s may be about the same or even less?

None of this needed to happen if they had kept supply tight and listened to the market.

Making excuses that "other brands devalue" is just an excuse for poor product planning of what is supposed to be a limited supply, exclusive, and expensive luxury item.

 

If you're right it sounds a bit typical. Short term demands for cash flow vs. long term product strategy.

 

+1

 

I'd prefer Mrs Klatten (BMW). Back to the roots of the F1 and lots of carbon fiber know how. But I think neither will happen. If McLaren needed money it would come from the gulf region. And if you guys want McLaren to succeed buy one now!

 

This is true, though that would seem to be a short term issue. There are only so many 2012s available and none are Spiders. 2013 will be more than 60% Spiders I think, so that will also help the coupe market a bit as well.

The affects of this initial year depreciation are not quite certain. Yeah, there are lots of barely used cheap cars on the market, but that's true for every brand and it hasn't stopped people from buying new. How is Ferrari selling 458's when there are plenty of really nice, barely used ones at $20-40K under MSRP? The depreciation stung for some people for sure, but there are a lot of people who didn't care too. Tons of people traded in on Spiders knowing full well of the loss on their coupe. The guy who traded in mine probably lost like $100K, but he still did it. There are still plenty people who just don't care about the depreciation and want the car that they want.

If it is in fact a problem, which I don't entirely think it is, it can be remedied quite easily because it only has one year of inventory out there. It will not be that hard to dry up coupe inventory with only a launch years worth of cars out there and the amount of future sales that will be Spiders. There are a ton of enthusiasts jumping on these deals and lots of 2012s have been moving lately. Every day I'm seeing new owners on ML who rave about the deal they're getting. This makes me think that the enthusiasts and prospective buyer who are more sensitive to price, and know a good deal when they see one, are not going to unload them so quickly like the original owners. When a car that's $100K more than your budget suddenly appears in your budget, while no other comparable cars do, I think you tend to keep it longer.

I for example would never buy a $300K car -- $200K is the most I like to spend. Unless a better car shows up at $200K or less, I'm not gonna get rid of it. This will eventually happen, but until it does, I'm gonna keep it. I think this will be the attitude for a lot of the used buyers. I mean, what else is there at this price that wasn't available a few months ago that is going to make them sell? 560's have been cheap for years now and aren't even close in terms of performance. Next Gallardo will be probably $250-300K. Next R8 is still probably 2 years away still and may just have similar performance. 458 prices are still $40-50K higher. Not much competition for this car at these prices. This could really help to soak up the excess inventory while they manage supply.

 

Is the idea of Ferraris holding there value not really a myth. Ye sin the managed Ferrari world owner no 1 trades in within a year, and due to demand gets a good price. But a 4 or 5 years old ferrari has lost 30- 50% of its value like other cars.

Fearris depreciate like others, its just that limited prod, brand image and mamagement mutes the depreciation for the first year, since there are relatively speaking a lot of ferraris traded in year 1 this tends to make one believe they hold their value, but in reaLlity that is only in the frst 18 months. If you throw in depreciation after that and running costs after warranty a ferrari is poor value. In fact mclaren running costs and parts costs seem to make it a far better longeterm prospect.

So yes as some have said had Mclaren shipped less cars year1 trade in values would be higher. The way for Mclaren to improve year one trade in values is to increase desrireability of the product or sell less. It hink it would not take that much to increase product desireability. Real steering a better front end and if it must be a turbo, something more explosive in the power dleivery. You know more F40 like. Plus make the motor more refined, a feeling of twinned 4's with blare and a bit of bucket of bolts feeling is not what a 250K+ exotic should feel like. There is a difference between blareful noise and tuneful sounds, there is a difference between the feeling of power and bad vibes, raw energy vs rough and ready. A car in this price range is like a fine watch, it has to have the feel in all its movements, Nissan at 100k can get away with things Maclaren cannot. The Jag 220 put down the numbers but the motor let it down.

 

I tend to agree. I was not a customer at near $300K but am now and I tend to keep my cars 5+ years and drive them.

 

This. The MP4 was on my shortlist back when introduced - right until I saw the very uninspiring design (and partly the impractical doors for daily use). I love the concept, but they need to get a new designer, especially that front.

Resale wasn't even a consideration (given that this was at introduction). Yes certainly producing fewer would have helped resale prices, but to begin with they should have made a better looking car.

However - as someone mentioned - the option lists are getting out of control as well. Spending a further 1/3 of the base price on options is just insane. But this isn't isolated to Maclaren - Ferrari takes the crown for stupid option pricing nowadays.

 

So true on the Options, but on the design it is a Personal Thing. I own a 12C and just sold my 430 and they were both designed by Frank Stephenson who was the designer at Ferrari. IMHO the 12C's looks over time will age fine, as far as the front is concerned there is an optional bumper that makes it much more aggressive.

 

So once all the excess (of production) 2012 12C coupes dry up ...... won't the prices start to adjust back upwards ? Very few coupes will be available (2013 coupes are almost nonexistent); the fire sale will be history.