Additional reason why values are climbing?

Sticker on my fully loaded 2003 360 Spider was $199K.


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I don't think poor returns are driving prices. To the contrary, I think all the strong returns over the past several years have provided the upper classes more disposable cash for luxury items like cars. While there is some buying for investment purposes, most are not buying as an investment.

Also, I don't see prices having risen greatly out of pace with inflation. As another data point, my scud cost $308,000 in 2008. MSRP for a Speciale is around that point (more of course after options).

 

because racecar

vettes and vipers are now $100k....

 

When I spec'd my 488, it came out to 355k. I hardly went crazy w options...just the expected carbon race seats, some interior carbon trim, cavallino & stitching, rosso mugello paint...Once upon a time, I also fiddled with spec'ing out a 458 Speciale in Bianco Italia and it came out to $402k...and I didn't even have engine bay carbon panels...*cry*

So, ya, I'd agree the higher priced new models could be a factor and also the fact that the new era "limited" editions aren't really "limited" when comparing to its predecessors. I think the term "limited" now simply means "less than" the normal base models.

The economy in general also seems to be strong, so that is also probably what's pushing prices up as well.

 

Just a theory: the radical change in the drive technology has now been introduced and is unstoppable. Over the next two car generations the combustion engine will be pushed into the background and will completely lose its present character as a main power source.

Enthusiasts (...and speculators) buy now all the beautiful sport cars with its excellent combustion engines (NA and/or turbo), this time will never come back.

But as mentioned earlier, this is just a theory.

 

Six years of unprecedented central bank easing and money printing contributes as well to the inflated values! You see it in exotics, also high end art setting records etc. i also agree with the points made about the desirability of these cars given the inevitable shift to electric cars, turbos, etc.


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6 years? I thought the low interest rate started with Greenspan right after the tech bubble.

 

I believe he is referring to the Quantitative Easing implemented by the federal reserve after the financial collapse in 08

 

Speculative purchases driven by unnaturally low interest rates and inept Fed that panders even more to the market (long market) than Greenspan (and Greenspan was pretty awful).

 

This.

There's a lot more disposable wealth chasing the same number of cars.

 

I am a bit more skeptical of wealth creation.

The only value society creates (in terms of new incremental value per person) is improved productivity.

A lot of the rest is an illusion through debt / leverage. There has been some real wealth creation from emerging economies becoming more productive, but tremendous volatility too given the social structures.

Productivity growth in the vast majority of developed countries has been extremely poor. U.S. in particular has seen some very poor growth over the past decade.

I just don't see much wealth creation. I don't know how much "value" today is created or captured by many of the new tech companies.

That said, I agree that the asset value run up in other areas drives a lot of the ability to purchase today. That is exactly what happened in other areas of the economy in 2007 when everyone felt rich because house prices were high...

 

Well, for a period of time, then they went back up to normal, and then crashed down again.

Fed has been playing the game of stabilizing agent over periods of time, trying to avoid near term vol at the expense of far more severe event vol.

 

True, but I didn't say "wealth creation." I said more disposable income, in that the wealthier end of the US population has seen a vastly greater increase in assets. The Dow has gone from 7,000 to 17,000 since 2009, and real estate is up sharply -- which benefits people who could afford to own homes to begin with. Our system in the US redistributes wealth "upward" due to tax laws, capital gains, etc. The segment that would even consider a Ferrari to begin with has more means now than ever in our lifetimes.

 

I don't think that anyone thinking rationally can say that appreciation like what we've just all witnessed can continue on and on. However, what none of us know is more likely the "true" value of these cars (here come the morons with the "true value is what someone else is willing to pay" bs). In other words, when interest rates normalize and there are more ways to earn a passive income from just capital gains, where will these cars settle? It's not a broad swath that paints everything. Some will stay the same, some might go a little higher, and many will come down.

So at this point, someone buying a car has to feel okay about the money they're spending for the car itself, not any future appreciation (or depreciation). Certainly, however, you can look at many cars and just know that they're worth owning at their current prices, heated market or not, and vice versa.

 

I think this is exactly it.

People need to value the cars independently of other cars (in the same "category") during times like these.

More important to think, how much any individual values the car, rather than thinking about what others may value the car at nor or in future. Speculative thinking is the latter.

 

That's $284,220.02 in 2015 dollars, so on par with current prices, and a 1988 TR that sold for $120K is $241,364.33 now. I do know is that is enough of a delta to draw any conclusions.

 

there is a term for all these increases in price... it is called "inflation" :=)

 

an area that is overlooked in the rising new car prices is the content that is available or mandated. Prior generation cars had limited content. The current crop of cars have a multitude of electronics and general automotive advancements in addition to mandated safety equipment that was not available back then. Strip out the mandated items and advancements, the current price probably has not advanced as much as indicated by the content and fully optioned full price.

 

United States Inflation Rate | 1914-2015 | Data | Chart | Calendar

Inflation is close to zero now and has been at historically low levels the past decade. We actually had deflation briefly in 2009.

The current climb in values is due to speculation, IMHO. We'll see how it ends in due time.

 

Listen to the man. He speaks the truth.

 

Yes its specualtion, but also specualtion driven by an expanded money supply and low ineterest rates. That means it can continue for a while, but like all speculative bubbles deflate or pop eventualy.

Yet the expanded money supply part of the equation means prices will not go back to their former level.

 

Speculation is still speculation. Real enthusiasts didn't wake up last year and started buying en mass certain models after they were languishing for 20 years.

People believe prices are going up so they are buying because they are going up. When they don't....

Exotics are modern day tulips.