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Supercar pricing headed down?

Discussion in '288GTO/F40/F50/Enzo/LaFerrari' started by 410SA, Jun 10, 2004.

  1. 410SA

    410SA F1 Veteran

    Nov 2, 2003
    8,391
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    Greenspan has spoken. Rates will rise and as with every time that happens for a sustained period, valuable but unnecessary luxuries like exotic vehicles and jewelry and semi rare wines will depreciate. True rarity, as in things that can be counted on ten fingers or less will be least hard hit, but run of the mill type "scarcity" like 399 Enzos, will take a significant hit.

    My prediction is that as rates rise over the coming months, F50's will drop a couple of hundred thousand first. Enzo's, in very short order will drop under a million dollars. I know this is merely of academic interest to just about every living being on earth, except for the 1,000 or so who have the means and the interest in these cars.

    F40's are currently selling at less than their original MSRP and they are truly iconic vehicles. The same thing will happen to Enzos (and F50's) once they are over 12 years old.

    Something about being a teenager that is unattractive to adults. We all love kids until they become obnoxious (around 12). They only become interesting again when they are well into adulthood (over 30). I think the same applies to exotic supercarcars.The only real exception is that very well behaved little english boy MacLaren.
     
  2. bobafett

    bobafett F1 Veteran

    Sep 28, 2002
    9,193
    Pray tell, what does this hold in store for you, sir? :D I have an idea... ;)

    --Dan
     
  3. Varenne

    Varenne Formula Junior

    Nov 8, 2003
    554
    Atlanta
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    Mark
    I think the empty garage in his current profile answers that question particularily well...
     
  4. Napolis

    Napolis Three Time F1 World Champ
    Honorary Owner

    Oct 23, 2002
    32,118
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    Jim Glickenhaus
    The market at the high end is VERY strong. A major F car went for 12.8 million recently and a Picasso sold for 104.2 million. There is huge $ around for major things.
     
  5. BigTex

    BigTex Seven Time F1 World Champ
    Rossa Subscribed Owner

    Dec 6, 2002
    73,135
    Houston, Texas
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    Bubba
    i guess i should thank my lucky stars that both my teenagers are mature well behaved young adults, but that's probably because i've treated them as such since they were small.

    my older one is doing well also, just based upon superior genetics alone!

    call me when i can trade three 308s for an F40. thanks! :)
     
  6. acw

    acw Karting

    Nov 3, 2003
    122
    Sorry for the naive question but why do you think this will happen? After all buyers for these rare goods are all cash buyers. I doubt anyone is financing an Enzo or a rare painting... Is it because higher interest rates make it more attractive for people to invest their money in fixed income investments instead of buying rare goods?

    AW
     
  7. 410SA

    410SA F1 Veteran

    Nov 2, 2003
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    Truly rare items are not subject to real world market forces. One of a kind things need just one buyer, but that's a very different situation from things that have multiple copies (in the hundreds) available.
     
  8. 410SA

    410SA F1 Veteran

    Nov 2, 2003
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    Cash is a relative term here. Availability of cash is more to the point, and you are correct that when rates rise money is often better employed elsewhere, rather than in items that are being devalued and not appreciating. And I don't believe that anything that has 398 fairly recent exact copies of itself is rare. And don't be surprised to discover that several Enzos are financed. It makes perfect sense to borrow cheap money to purchase that kind of asset, write off allowable depreciation while retaining the market capital increase. You win both ways. You get to write off the interest expense and depreciation and you get to own and use the asset. There's no other way I'd buy one.
     
  9. 410SA

    410SA F1 Veteran

    Nov 2, 2003
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    I guess that it's natural to love the ones we created, but how many other teenagers do you have this affection for?
     
  10. 410SA

    410SA F1 Veteran

    Nov 2, 2003
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    Just watching and waiting......
    Any decent 275 4 cams popped up on your radar?
     
  11. BigTex

    BigTex Seven Time F1 World Champ
    Rossa Subscribed Owner

    Dec 6, 2002
    73,135
    Houston, Texas
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    Bubba
    good idea! you can take it on the factory tour of the castles!


    lol! no other teenagers! my gf's son is a real piece of work, but he leaves for college in the fall. he takes after HIS dad!

    we can run naked thru the house! can't wait!


    sheehan has a '65 275GTB
     
  12. Kds

    Kds F1 World Champ

    With all due respect Alex, the only problem that I have with the OP is that current rates are at record lows that I....at 44....have never seen in my lifetime......

    So they go up a bit for a while (say 2-3 points over 3-4 years).....

    I remember where they used to be for a long time.....and it was a lot higher than that. And.....we still sold lots of high end cars back then for stupid money too.

    On a different tack though.......if rates go up.....your dollar gets stronger, which makes "our" Canadian high end used car prices rise somewhat due to the exchange.
     
  13. 410SA

    410SA F1 Veteran

    Nov 2, 2003
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    Everything's relative. A rise of 3% over the current fed rate would be an massive increase of several hundred percent (4% versus 1%) and that kind of increase translates into huge opportunity for those with access to cash.

    Smaller changes, less than an order of magnitude, are significant enough, but changes like the ones I expect are huge in their implications. The flip side of rates being so low is that when they begin to rise off of a very low base, the changes are huge in terms of a percentage increase, thereby having the effect of switching money away from hard assets to interest bearing investments. Nobody cares what happened in the late80's/early nineties, they care about the current situation.
     
  14. DodgeViper01

    DodgeViper01 F1 Veteran

    Oct 1, 2003
    6,760
    New Jersey
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    Woods
    The elite, that can afford the expensives houses, cars, paintings, etc are for the most part NEVER going to be reflected in the economy, when it is up or down. The people looking at these cars, for the most part have quite a bit of money to not have to worry about the economy. The elite will always be buying expensive things, regardless of the time.
     

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