Maintenance Costs: Our McLarens – Update 2023

Maintenance Costs: Our McLarens – Update 2023

When people find out I have owned a number of McLarens, they tend to ask a lot of questions about maintenance costs and reliability.  As we have just completed another annual service cycle, the following is the updated list of all the maintenance costs and reliability issues we have had across the ten McLarens we have owned over the past decade plus.  Personally, I have tended to view this as a highly dangerous topic to publicly document given Mrs. SSO does read all the articles I post.  However, having now done it several times without serious repercussions, I believe the risk is manageable.  I have always tried to be quite religious with annual services which I’m sure has helped finance better lives for quite a few very talented mechanics.  In addition, any issues that come to light during these annual pilgrimages to the service center get taken care of right away.  My philosophy has always been that small problems only grow into big problems and it is much less expensive to take care of things immediately than to wait.  I do believe this has been a contributor to the very low level of reliability issues we have had across all the cars. 

As a reference point, when evaluating the annual maintenance costs (I define maintenance as annual servicing cost plus replacement of wear & tear items), I take into account the original list price and not our acquisition cost.  A car that cost $250,000 new is always going to have $250,000 car type service costs regardless of what you might be able to buy it for 5 or 10 years later.  Unfortunately, unlike a car, service costs don’t depreciate over time, if anything they move in the opposite direction as more of a car’s components wear out with age and need to be replaced (for the younger Ferrari owning generation: depreciation is an ancient phenomenon where the value of a new Ferrari would decline for multiple years after purchase, this happened back in the olden days when the only person anyone had ever heard of eating a bat was Ozzy Osbourne).

In order by date of acquisition here is our McLaren maintenance and reliability history.  For the sake of simplicity, I have kept the costs in the currencies they were incurred in.

McLaren 12Cs – We owned three 12Cs over a 3-year period.  While on paper this sounds a bit daft, there is a logical explanation to it that involves two moves and three countries during that period (Our McLaren History).  Across the three 12C’s in the 3 years, we only had one bill for an annual service.  The invoice came to £3,265 and included £1,530 for the hardware upgrade from the less than useful 1st generation IRIS infotainment system to the 2nd generation.  This is one case where I still believe McLaren got it wrong. IRIS was a £5,320 option that was substandard at best and should have been replaced free of change for all owners of early 12C’s.  We did take our final LHD 12C Spider in for service but right after we dropped it off, we got the offer to trade it in for a 650S Spider so I never did see the invoice.

In terms of reliability across the three 12C’s, our first McLaren, the 2013 RHD 12C Spider, was the only one we have owned that had steel brakes.  I made the mistake of washing it once and putting it away with the brake discs still wet.  The right rear caliper froze on the disc and we had to flatbed it to the service center to get it released.  On the second 12C, a 2012 LHD Coupe, their was a faulty left front tire sensor.  I had to take the car in twice before it was finally rectified.  The last 12C was a 2014 LHD Spider.  This 12C had one issue, a temperature sensor that needed replacing.  The car was out of service for a day. The final 12C Spider was my daily driver for a bit over a year.

McLaren P1 – We owned the P1 for a bit under two years. During that time, we had it service once at a cost of $2,880 which seemed quite reasonable given the value of the car.  To date though, the P1 is the only car we have sold due to fear of a large six figure maintenance bill (P1 Farewell) if the hybrid battery had failed.  I do regret having let it go and would love to get another one at some point in the future.

We did have to two reliability issues with the P1.  The first was a loose rear side turn signal light that took 5 minutes to fix.  The second was IRIS Infotainment System failed and needed to be replaced under warrantee.  There was also a recall notice for the front hood latch.

McLaren 650S Spider – The 650S Spider has been with us for 8 years now.  From delivery up until Covid, it has served as my daily driver.  The bills to date are: 1st service $1,410, 2nd service $2,275, 3rd service $1,836, & the 4th service $5,570 which included $2,100 for four new tires and $880 for the alignment.  Four years of driving around on Dallas’ horrible roads definitely took its toll.  The first four services were all done by McLaren Dallas and they were terrific to deal with. 

Year 5 saw us decamp from Texas and move back up to the Northeast.  The last several services have been completed by McLaren Boston, who have been just as great to deal with as McLaren Dallas.   The year 5 service cost was very much in line with the year’s 2 and 3 at $2,196.  However, it turns out that the roads up North are no more friendly to 650S tires, and a large nail led to a $610 bill for a right rear replacement shortly after the 5 year service.  The Year 6 service at $4,778 has quite a jump up again as there was an issue that had come up that I wanted addressed.  The small left hand menu stalk had stopped working properly.  The control module had failed and needed replacing at a cost of just under $2k.  Year 7 at $1,675 was a much more in line with most of the early service costs as there were no additional issues that needed addressing.   In addition to the forementioned small menu stalk failure, in a separate trip to McLaren Boston, we also replaced the high mounted rear brake light for $915, ordered two new keys at $422, and replaced all four suspension accumulators at a cost of $3,785.  Year 8 was a bit harder on the wallet with total costs coming in at $5,733.  That included $2,535 for a set of new tires, $450 for two wheel refurbishments after the 650S lost an argument with a curb in Providence, $479 for the four wheel alignment for the new tires, with the actual service being a reasonable $2,269.

McLaren 675LT Spider – The 675LT Spider is six years old now.  During this period, it has been our road trip car of choice, so it’s done plenty of long trips.  The 675LT Spider has also spent the majority of its life in the mountains of Montana enjoying some of the more challenging roads in the US.  The six annual service’s so far have run: 1st service $1,755, 2nd service $2,405, 3rd service $1,700, 4th $2,671, the 5th $2,066 and the 6th$2,099.  As per the 650S Spider, the first several were completed by McLaren Dallas and the last three have been done by McLaren Boston.  In addition, we had to replace the windshield in September 2019 at a cost of $5,610.  Despite being a Limited Edition car, the LT has been less expensive to run than the 650S Spider.

In terms of reliability, we have not had a single issue with the 675LT Spider and it has only seen the inside of the McLaren service center for its annual services.

McLaren 720S – We owned the 720S Coupe for just under two years and had it serviced twice at costs of: 1stservice $1,625 & 2nd service $2,925.  The costs are very much in line with the bills for the other models. These were the only two times the 720S went back to the service center.  In a departure for our normal practice of waiting for late production cars, the 720S Coupe was a fairly early build.  It was traded in for the 720S Spider.

McLaren Senna – We have owned the Senna for a bit over four years. During that time, we had it service by McLaren Boston at a cost of $1,770 for the 1st service, $2,129 for the 3rd service and $2,302 for the 4thservice.  The 2nd service was done free of charge as McLaren North America picked up the bill.  Overall, the costs seem very reasonable for a car of its complexity.  In fact, they have been just half the cost of a P1’s service and the Senna’s annual service costs are very much in line with the other McLarens.  The Senna’s also had two recalls and one warrantee issue which were taken care of during the 1st service.  The free service was related to the warrantee issue which was very professionally handled by McLaren.  As a benchmark, the total for the 3 services on the Senna is $6,201.  Aston Martin offers a pre-paid three year service plan for the Valkyrie for £230,000 +VAT.

McLaren 720S Spider – We owned the 720S Spider for just under two years.  It was serviced once at a cost of $1,773.  The 720S Spider also made two extra trips back to the service center.  Once for a minor issue with the air conditioning and once to replace a misbehaving electric module for the roof.  The 720S Spider was traded in late last year for the 765LT Spider.

McLaren 765LT Spider– The 765LT Spider arrived earlier this year.  It already has well over 1,000 miles on it and has been completely reliable.  The first service was this May and it totaled $1,711.  In addition to that service, the 765LT Spider did make a second trip to McLaren Boston for a check engine light.  It turned out to be faulty sensor that was replaced under warrantee.

I’m not sure what conclusions to draw from this exercise other than McLarens are not inexpensive but also are they are not unreasonable to run.  However, I’m not going to add the costs all up as that just seems counterproductive.  The annual maintenance costs seem very consistent across the range from 12C through to the Senna with the P1 being just a bit more.  The fact that the P1 is a bit more is not surprising given the complexity of that car.  So far, outside of a few issues with the 650S Spider a couple of years ago, we have been fortunate to avoid any major “wear & tear” bills that can generate the big hits to the wallet.  The 650S Spider issues I see more as the end result from the many years of daily driving over crappy potholed roads in Dallas.  On a positive note, none of the McLarens have ever left us stranded. 

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December 2023

 

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The SSO Holiday Gift Guide

The SSO Holiday Gift Guide

Figuring out what to get a loved one for the holiday season can be a daunting task.  In our family, it’s a never ending string of text messages and emails asking the same “what do you want for Christmas?”   It only stops when some ideas are finally coughed up, half the time in a fit of desperation, just to get the nagging to end.  To try and help my fellow petrolheads, this year I’ve pulled together a few ideas across different price points.  Starting from free and ending at a couple of million:

 

Free

A subscription to karenable.com (karenable). Just send the recipients email address to SSO@karenable.com and they will get a notification every time a new article is posted.  This is even better value for money than a Ferrari Carbon Fiber drink holder.

 

Also in the free category, sign up for the Sunday Drive Newsletter. It’s put out by the team behind the Stuttgart Market Letter and goes a great job of capturing interesting motoring content from the past week.

 

Under $100

A year’s subscription to Road Rat Magazine. (Road Rat Subscriptions) Road Rat is no ordinary car magazine.  It is published 4 times a year.  Each edition is beautifully written, the articles deeply researched, and its exquisitely crafted.

 

Chris Harris’ 1st book: Variable Valve Timings: Memoirs of a car tragic.  (Variable Valve Timings).  Before he became a TV Presenter and petrolhead icon, Chris was a well-respected journalist whose honesty got him banned by Ferrari.  However,I have heard that Chris’ true claim to fame is that he served for several years as the number 3 driver for the British motor racing team, Garage 59..

 

McLaren: The Road Cars 2010-2024 by Kyle Fortune. (McLaren: The Road Cars) The book is now available for pre-order and will ship in Jan 2024.  It promised to be the definitive history of McLaren Automotive.  The forward is by Jay Leno.

 

If you have forked out $2k+ for that Maranello carbon fiber drink holder, then you need the right travel mug to go in it.  The Yeti Travel Mug gets top karenable ratings (Yeti Travel Mug).

 

A CTEK battery conditioner (CTEK). Since we started keeping all of our cars on CTEK battery conditioners whenever they are in the garage, we haven’t had a single battery or electrical issue.  They are brilliant.

 

$200-$500

The Escort Max 360 Radar Detector (Max 360).  Sometimes your right foot just slips a little and an Escort Max 360 will help keep you out of potentially expensive trouble.

$500-$1,000

The Car Shoe was the original driving shoe and is my favorite.  They are beautifully crafted, very comfortable, and wear well.  They have two stores in Italy and can be ordered on-line (www.carshoe.com).

 

$1,000-$5,000

A pair of ticket to The Quail, A Motorsport Gathering (The Quail).  It is the ultimate automotive food and champagne festival and Mrs. SSO’s favorite automotive related event.

 

$5,000-$10,000

A Loro Piana Roadster Jacket. (Roadster Jacket) Created to celebrate the 75th Anniversary of the Concorso d’Eleganza di Villa d’Este on Lake Como.  It’s beautiful tailored out of the world’s finest cashmere.

 

$10,000-$25,000

Pure McLaren Artic Experience (Pure McLaren Artic).  This should be in every supercar owner’s bucket list.  Now if I could only convince McLaren to hold an ice driving experience on a frozen lake in Montana.

 

A Podium 1 Racing P2 Sim Rig (Podium 1 Sim).  Podium 1 builds about the best racing sim rigs on the market and the P2 rig is a great balance between cost and performance.

 

$25,000-$50,000

For the Ferrari F40 owner in your life, nothing says I love you more than a set of ceramic brakes from DK Engineering. (F40 Ceramic Brakes).  They are spectacular and utterly transform the F40’s stopping ability.

 

$50,000-$100,000

The full Ferrari Corso Pilota Program (Corso Pilota) starting with “Sport” and ending with “Race”.  Ferrari does these sorts of programs brilliantly.  For a Ferrari owner, this is an experience that will both enhance your skills and provide a lifetime of memories.

$100,000-$500,000

A McLaren 750S Spider (750S Spider). This is likely the last non-hybrid production series supercar from McLaren and it may just be the best.  While the order book is growing on the 750S, I believe there are a few late 2024 build slots still available.

 

$500,000-$1,000,000

A Glickenhaus SCG 004S or a 004CS (SCG 004)  It’s a fully US road legal 3 seater with a center driving position.  Toss in a full Carbon fiber chassis and you have what is likely to be the ultimate American made supercar.  If that isn’t appealing enough, the “S” comes with a manual 6 speed transmission.

 

$1,000,000 and up

While the boat has long sailed on the GMA T.50, I have heard there might be a few build slots for GMA’s next car, the T.33 Spider still available (T.33 Spider).  If the T.33 turns out to be even half as good as the T.50 is reported to be (see: La Source: T.50 vs. McLaren F1) it will be epic.

 

I’ve been quite impressed with the development of the Praga Bohema (Bohema).  It has potential to be the best of the current series of track focused hypercars.  Praga will only produce 89 Bohemas with deliveries starting in 2024.   Like the T.33 Spider, from what I have heard, there are still a few build slots available.

 

I hope this list is at least semi-entertaining and moderately useful.  Good luck with the Holiday shopping.

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December 2023

 

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Supercar Market Insights & Analysis – Nov 2023

Supercar Market Insights & Analysis – Nov 2023

Since I did the last Supercar Market update in July 2023, the world has changed……again.  We have two wars raging with the surrounding areas looking highly volatile.   Money is now very expensive and might get even more so in the coming months.  Mortgage rates in the US are now at a 20 year high with the Fed threatening to push rates even higher if inflation doesn’t come down soon.  Credit card and auto loan delinquencies are now well above pre-COVID levels and expected to peak in 2024 at around 10%.   The US House of Representatives was brought to a standstill and the Speaker of the House unceremoniously deposed by a Congressman currently being investigated by the House Ethics Committee for sexual misconduct, illicit drug use, and assorted other misconduct.  The new Speaker of the House of Representatives, who is also 2nd in line to the US Presidency, voted against certifying the 2020 US Presidential election.  The US now has a sitting President whose son has been indicted, and a former President who is facing criminal charges in 4 different jurisdictions.  Just to add a bit more legal excitement this year, that same former President was found liable for sexual abuse and defamation plus it turns out he committed fraud by shockingly inflating his assets by just a few billion.  The ghost of Richard Nixon has to be complaining that he was born fifty years too early.  It all makes Boris Johnson look pretty boring and down to earth. 

There are signs that something resembling normalcy might just break out again, David Cameron, the last adult to be British Prime Minister, was just brought back into the Government as Foreign Minister. Liz Cheney must see that as a sign of hope. However, as a true sign of the times, the Associated Press recently tweeted: “We recommend avoiding general and often dehumanizing ‘the’ labels such as the poor, the mentally ill, the French, the disabled, the college educated.” It wasn’t exactly well received in Paris.  I would like to note that the “French” fall between the “mentally ill” and “the disabled” while the “college educated” rank dead last. 

The Macro Situation

Which brings us to today. The rise in interest rates over the last year and a half has finally taken a real bite into the economy.  The housing market is just plain ugly right now with mortgage rates at a 20 year high.  To a large extent, the market has frozen up as many current owners can’t afford to sell or trade up as they would lose their current locked in low mortgage rate.  Despite threats from a number of quite angry high-profile CEOs demanding their staffs return to the office, remote and flexible working are here to stay.  The pendulum on DEI/ESG has finally begun its long swing back towards the center but some of the insanity around it will take a long time to work through (as an example a good friend recently lost out on a Board seat for which she was highly qualified as the company decided they wanted a Latina and didn’t realize she was Italian until the final round of interviews).   Several of those companies that seem to be talking the loudest about DEI/ESG have stock prices going sideways the fastest (example: Colgate-Palmolive).  A number of major money managers are closing EGS focused funds and the number of companies talking about it in the latest round of quarterly earnings has dropped by over half in the last 2 years.  In fact, Larry Fink at Blackrock refuses to mention it at all. Long term the companies that return to choosing the most qualified candidate for the job and focus first on investor returns will win in the marketplace. 

Inflation is finally starting to cool behind the Fed taking interest rates from basically 0% in 2021 to 5.5% as of July 2023.  The stock market has recovered a bit in 2023 with the DOW up 5% YTD after a torrid November rally.  After hitting parity to the $ back in late 2022, the € has stabilized and now sits at €1 = $1.10.  The British £ seems to be locked into a $1.20-$1.30 trading range long term now and currently sits at $1.27 = £1 but is still well off its pre Brexit levels.  I have a few UK based friends that are predicting that the UK will eventually return to the EU and I can’t see the British £ returning to a 2:1 $ exchange rate unless that happens.  After an extended mud throwing session, the US and China are finally looking to cool the temperatures as the Chinese economy has cooled off.  Putin’s mad foray into the Ukraine is looking more and more like it will drag on for years.  The harsh reality is this is probably in NATO’s best interest as having the Russian army tied up and being ground down in Ukraine keeps it from creating trouble elsewhere. 

Instead of going through a methodical analysis of different parts of the Supercar market, as there are plenty of better informed people who already do that, I thought it might be more interesting to layout a few things that have caught my attention.

The Modern Era (2010 ->)

The Hypercar Trinity

Prices on the 2013/2014 Hypercar Trinity, which include the oddly named Ferrari LaFerrari, the McLaren P1, and the Porsche 918 have been very stable through 2022 with not a lot of cars changing hands, at least publicly.  LaFerraris now sit squarely in the $2-$4 mil. range depending on spec and mileage with the higher number being achieved by LaFerraris that have sadly never felt a leaf, rock, or pothole under their tires. The number of LaFerraris coming into the market has dropped off this year rather substantially.  My guess is existing owners are holding onto their cars now waiting to see what Ferrari announces as it successor which is expected to happen in the next year.  Both McLaren P1s and Porsche 918s moved up from early Covid lows of $900k.  918s now sit in the  $1.1-$1.4 mil range which is off about $200k from 2022.  P1s are a bit of a different story, two crossed the auction block this year at $1.05 mil and two were in the $2 mil.  range.  The two high value P1 were both MSO special projects and have spent almost their entire life under a car cover.  The two others had been driven a few miles but still well under 5k. Where P1 prices go from here will be very interesting to watch but the market seems to be bifurcating dramatically between garage queen museum pieces and drivers.  I expect the next generation of Hypercars to be announced by at least two of the three manufacturers in 2024.  What this does to values on the last generation will be interesting to see but at least initially I doubt it will have a positive effect. The LaFerrari is a possible exception if Ferrari makes current LaFerrari ownership one of the critical criteria for getting an allocation of its next hypercar.  All of these models are falling into the exploding maintenance costs category as their hybrid technology ages.  When annual service bills start approaching the cost of a nice used Ferrari 458 or McLaren 650S, it will have an impact.  These are also not cars you can just park in a warehouse and forget.  They need to be constantly on life support (i.e battery chargers) and do much better when used regularly than when they sit.

And a brief word on the McLaren Elva

Elvas are an interesting case.  To start, they had a rather difficult “birth” with production numbers being cut twice before settling at 149 units.  Long term, the low production numbers should help values, but this could take a decade or longer before it plays out.  In terms of values today, it is very hard to peg.  List price was $1.7 mil. but by ticking a few boxes on the option list, you could easily be in for north of $2 mil. by the time it landed in your garage.  Six times an Elva crossed the auction block between Oct 2021 and Aug 2023 and not a single one of them was sold.  High bids on each ranged from a low of $1.3 mil. to a high of $2.1 mil.  Finally in Nov 2023 an Elva was hammered sold for $1.38 mil.  The insanity on this sale is it was the third time that car had been put up for auction.  The first time the seller rejected a high bid of $2.1 mil., the second time it was $1.6 mil. before finally accepting $1.38 mil.  Go figure.

The Ferrari F12 & 812: Still Depreciation Champs ?

I have been following the Ferrari F12 and 812 market fairly closely for 2 years now.  Adding a Prancing Horse badged V12 GT to the garage has been high on my list for quite some time, but I am not in a rush and refuse to pay a premium for a car that has traditionally been the depreciation champion of the Ferrari line up.  One that was close to an ideal spec recently popped up on the Ferrari Preowned site but it just happened to be at the one Ferrari dealer I would rather drop something heavy on my foot than ever deal with again.  The number of F12s on the market is consistent with 6 months ago but twice the number of 12 months ago.  Today there are 15 F12s on the US Ferrari preowned website ranging in price from $230k to $305k and 39 on Autotrader starting at $209k.  Prices on F12s look like they have dropped by at least $40k in the last year with $10k of that in the last 6 months.  F12 prices have been pushed down mostly by the recent drops in values on the 812 Superfast, which replaced the F12 in the Ferrari line up.  For the 812, inventories are substantially higher today vs. 6 months ago with a whopping 52 812s on the US Ferrari preowned website ranging in price from $320k to $440k and 89 on Autotrader.  I expect we will see the next big move south in F12 values when the first 812 is listed on the US Ferrari preowned website below $300k.  The way the market is moving, this is highly likely to happen in the next 3-4 months.

Aston Martin Vanquish Gen 2 2012-2018: The V12 Bargain Buy?

The 2nd generation 2012-2018 Vanquish was basically an evolution of the DBS.  The Vanquish is built off the same platform with a few styling cues swiped off the One-77 added.  The Gen 2 Vanquish was only sold with an automatic gearbox.  Early models came with a 6 speed autobox with later (mid 2014-2018) switching to a much improved 8 speed ZF automatic.  A further update with increased horsepower and revised aerodynamics was delivered in 2017 with the cars now being badged Vanquish S.  Today you can find higher mileage coupes starting at $70k with Volante’s starting at $105k.  The later “S” models of both have dropped by $30k in the last 6 months to $170k.  The low end of the market has dropped by $10k in the last 6 months and post 2014 Volante’s are down by $20-30k with cars sitting on the market for extended periods.  The later model Vanquish and Vanquish S’ are still depreciating, and I would expect that they will eventually settle down at a similar price range as the DBS.  With 52 listed for sale on Autotrader plus an additional 7 on Aston Martin Preowned USA right now, it is a buyer’s market.  Six months ago, there seems to be a $20-30k spread between similar cars listed on independent dealerships vs. at official Aston Martin dealerships.  That spread is now closer to $10k which probably reflects the recent decreases in values but points to a more stable market going forward.  At 60% of the cost of a compatible Ferrari F12, the Vanquish is an intriguing option.

The Classics (90’s & 00’s)

The Ferraris: Steady as She Goes….

This one’s a bit painful to write as we sold our Ferrari F50 back in 2014, but over the last decade, F50s have gone from the ugly unloved stepchild in the Ferrari limited edition line to the most lusted after of the group, and for good reason.  An hour’s drive in one provides all the proof needed.  F50s have risen from just under $2 mil. in 2019 to topping out at $4.9 mil. in Dec 2022.  The march up has been very consistent until this year.  Since then, the market has stalled and with the last one going for a more modest $3.9 mil.  Ferrari Enzos on the other hand have been trading in the $2 – $3 mil. range depending on color and mileage for most of the last decade.  In 2023, on fairly thin data, it looks like they might have taken a bit of a step up to be more in the $3 – $4 mil. range with the last sale of a very low mileage Enzo crossing the $4 mil. line for the first time.  While the F50 has aged brilliantly and it is as engaging and rewarding to drive today as it was 25 years ago, the Enzo and its first generation F1 gearbox has aged more like fresh seafood. 

The 430 Scuderia is another Ferrari that has aged well with prices in the US rising from $180k in 2019 to $100k more for a similar car today.  The final generation F1 gearbox in the 430 Scuderia is a joy to use and has aged well.  In fact, I would rate the 430 Scuderia as the best of all the 2000-2010 Ferrari models.  What is a bit strange is while prices of 430 Scuderia have jumped in the US, they have only risen slightly in the UK. Probably the biggest head scratcher though is the huge jump in values on the Ferrari F355 GTS that continues to this day.  It seems to be mostly driven by Bring A Trailer.  The F355 GTS has gone from $70k a couple of years ago to an insane high sale at $307k for a Euro F355 GTS 6 speed in June.  They now sit regularly in the $150-200k range and command a $50-70 premium over F355 Spiders.  The F355 GTS was the first Ferrari I owned and of the three F355 variants (Berlinetta, GTS, Spider) I would have put it squarely at the bottom of the pile.  Leaky roof panels, vague steering, and with reliability that both EasyJet and RyanAir would be horrified at, just doesn’t have that much charm.  Ferrari 599 GTB values have remained very steady over the last several years in the $140-200k range depending on year, spec, and mileage.  As 812s continue to drop in value, I would expect that this will have a bit of a knock on effect on 599s over the next 1-2 years.

Porsche Carrera GT: Poster Child

If there is a poster car for the COVID supercar market price jump insanity, the Porsche Carrera GT would be a leading contender.  For most of its first decade of existence, Carrera GTs were $300k-$450k cars.  In 2014, they started climbing and by late 2015 the new range was $600k-$800k.  This held until the beginning of 2022 when suddenly Carrera GTs jumped by $1 mil. to $1.8 mil before finally hitting an all-time auction high of $2 mil. in March 2022 for a 182 mile grey car.  Since then, it’s been a downward slope with most auction sales closer to the $1 mil. mark than the $2 mil. mark with a couple falling back under $1 mil. In fact, 4 of the 10 Carrera GTs sold at auction this year were under $1 mil. I had one Porsche expert tell me early in 2023 that he believes they will drop back down to the $800k range.  He was spot on as a silver Carrera GT that had a few miles on it went for $834k in October. Longer term it looks like Carrera GTs are now $800k-$1.4 mil. depend on color and how much of their life they have spent under a car cover. 

The 90’s Jaguar Supercars

After not a single Jaguar XJR-15 crossed the auction block in 2018-2020, seven have done so in the last 2 years.  The first of these was the high sale at $1.7 mil. in Aug 2021, the next closest XJR-15 made $1.2 mil. and the low was $900k.  Given that XJR-15s might be beautiful to look at but are completely demonic to drive, and there are only 50 (or 53 depending on who you ask) of them, this $900k-$1.2 mil range is probably where they will now sit.  To give you an idea of how completely demonic they are to drive, the XJR-15 is a 31 year old car now.  Of the seven that have come up for auction, the highest mileage car was still under 1k miles and three of them were under 200 miles. 

XJ220s are a bit of a different story, as one of the 90s most unloved supercars, unlike just about everything else, they never really have had a major run up in values in the last several years.  The peak was around $600k whereas today they are $400-500k cars. Most XJ220 have rarely been driven and around half the cars coming up at auction in the last couple of years had under 2k miles on the odometer. 

Vintage (60’s – 80’s)

70’s Ferrari Fiberglass

Ever since I owned a Ferrari 308 GTB “Vetroresina” well over a decade and a half ago, I have always been intrigued by them.  These are the 1st generation Ferrari 308 GTBs produced in 1975-77 with fiberglass bodies.  Just over 800 were produced, making them rarer than either a similar era Ferrari Daytona or a Ferrari 512 BB.  In fact, I would put it in a similar category with the Dino 206 which preceded the hugely popular Dino 246 GT.  For the better part of the last decade these “glass” 308s have commanded over a 100% premium vs. the far more common steel bodied 308s.  In the Covid era, they have traded hands remarkably consistently in the $150k range up until the last year.  Values declined consistently through 2022 hitting a low of $108k in December 2022.  This year has been a bit more of a rollercoaster with a concours quality restored blue Euro fiberglass 308 GTB going for $280k in March at RM Sotheby’s Amelia Island auction but the latest two sales were at $85k and $111k.  My guess is a number of speculators were hoping that the 308 GTB Vetroresina would be the second coming of the Dino 246 GT and values would skyrocket into the $400k range in just a few years.  At this point it looks more like the second coming of the 512 BB with values off by a 1/3 vs. Pre COVID bubble highs.

I looked at two 308 GTB “Vetroresinas” this year.  Still waiting for compression test numbers on the first and never did hear back on the second after pointing out that it was well overdue for a cambelt change. 

Vintage Ferraris (the 60’s)

If you look at the longer-term trends on a few of the better known of the 60’s Ferrari models, it is a bit of a mixed bag but the direction does seem clear.  The Ferrari 365 GTB/4 Daytona’s sits at the bottom of the 2 seat GT pecking order and they are now rock steady in the $500-$600k range.  The hype a few years ago that Daytonas were about to become $1 mil. cars has aged about as well as a Jared Kushner’s Middle East peace plan. Ferrari 275 GTB’s look to be $1.5 mil. to $3 mil depending on length of nose and number of carburetors.  The slide in 275 GTB’s has ended, and prices have stabilized over the last 2 years.  The Ferrari 250 Lusso is on a similar track to the 275 GTB.  Back in 2015 they were $2 mil. cars and now $1.2-$1.5 mil. is where the market sits.  One 250 Lusso did bring $2.6 mil at auction in August 2023 but it was a rare perfectly restored car with a fully documented history.  The most recent sale at auction was for $1.3 mil. for an older restoration that would now be described as a very nice “driver”.  Values on the 60’s 2+2 Ferraris look to be off Pre Covid highs by 20-30% now and will likely fall further.  These models all have the same eye watering maintenance costs of other 60’s Ferraris worth multiple times as much.  The maintenance costs were easy to justify when values were rising but in a stable to declining market it becomes far more difficult to.  Demographic shifts will continue to put pressure on the older cars with the less valuable or well known models taking the hit first.  These Vintage Ferraris are less appealing to the younger generation of enthusiasts who did not grow up with them on their bedroom walls.  These are also all cars that take real skill to drive and punish mistakes with massive repair bills with a high potential for broken bones.  The other issue is with each passing year, finding a skilled mechanic who can care for the car is becoming increasing difficult. 

Vintage Aston Martins DB5 & DB6

If you look at the longer-term trends on the main 60’s Aston Martin models, the direction does seem clear.  Back in 2020-2021 I couldn’t find any DB5 sales where the number began with anything less than a “5”.  This year there have been several sales on the $300-400k range.  DB5s look to have now settled in the $400k-$550k range depending on condition and spec.  This is down from $700-$850k for a similar car a few years back.  It’s the lower value DB6 coupes that have held value better.  For the last 2 years they have been reliably $150k-$200k cars.  The higher powered DB6 Vantage still commanding a 50%-100% premium over the base DB6 depending on condition.  Like with the 60’s Ferraris, demographic shifts will continue to put pressure on the older cars, so I don’t see these rising in value again anytime soon.  Vintage Aston Martins are cars that take real skill to drive well and are a bit of an acquired taste as light and nimble are not words normally used to describe any of them.  Condition on all is a huge driver of value as restoration costs on all are eyewatering. 

Summary

As of November 2023, we have a supercar market that is generally holding stable for the  vintage cars but is in decline on most of the more classic & modern models.  Interest rates have likely peaked, but a lot of the pain from that peak is still to come.  Those models that have exploded in value during the Covid era are the ones most likely at risk of a second rapid decent.  The Hypercar bubble is history, the latest ones launched are at best holding at MSP.  Demographic shifts, as the percentage of the population that knows how to drive a manual car continues to decline, will likely continue to put pressure on the vintage market over the coming years.  However, if you have the cash, the coming year will likely be a good time to start looking for your next garage addition.

 

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Ferrari vs. Aston Martin: Truly Competitors?

Ferrari vs. Aston Martin: Truly Competitors?

There was one exchange on the recent Ferrari Q3 earnings call that really caught my attention:

 

Question: Giulio Pescatore – BNP Paribas

And first one, I want to come back on a comment made by one of your competitors. I know you don’t comment on competitors, but it was striking because they were calling out weakness in luxury cars demand, especially in North America. And what they said, it seemed very stark contrast with whatever you’re saying today. So, I’m not asking you to comment on competition, but just what do you think is making the difference here? Why your demand is so much healthier and resilient than some of your peers?

 

Answer: Benetto Vigna – Ferrari CEO

I think when we’re talking about Ferrari car, we are talking about an ultra-luxury car that is also addressing maybe demographics that is different from other brands. But the second I have been — in these 2 years, I have seen, and I’ve met many people that are touching our brand and they have seen an attachment, a sense of bonding that is really unique. I mean, I was in Mugello last weekend, I was in Pebble Beach. And I can tell you, Giulio, that right after the car was shown, it was fully allocated. I mean the car — there was a client close to me that started to cry, literally.

 

Which is a wonderful way of saying we don’t comment on our competitors because we don’t believe we really have any.  We operate in our own unique environment and ecosystem.  Whatever weakness they are seeing might be happening in their market but certainly not ours.

The competitor that Pescatore was referencing is Aston Martin Lagonda as they referenced weakness in North America in their Q3 commentary the day before.  Now Aston Martin’s Executive Chairman, Lawrence Stroll has stated repeatedly over the years that:

Our vision to become the world’s most desirable, ultra-luxury British performance brand.

 

This would indicate that Aston Martin sees itself in the same competitive reference group as Ferrari.  In fact, to try to bring his vision to life, Stroll has seeded Aston Martin’s management ranks with a significant number of Maranello refugees, including Aston Martin’s current CEO, Amedeo Felisa.  In many ways, the current Aston Martin executive team is a pretty close recreation of Ferrari’s management team circa 2015.

 

The question therefore is do the Financials suggest Ferrari and Astin Martin are true competitors.

 

Starting with a few basic numbers and then looking into the most recent results in terms of both Q3 2023 and YTD 2023.  Today Ferrari has a market cap of $65 bil. and Aston Martin’s is $1.9 bil.  If you invested $100 in Ferrari on the day Vigna took over as CEO, you would have $165 today.  The same investment in Aston Martin on the day Felisa took over would leave you with $31 now. If you are in London, it’s basically the difference between dining at the River Café or being relegated to Pizza Express.  While brand strength and equity value are as much perception and can vary greatly depending on the eye of the beholder, where the undeniable truth does shine through is in the financial results.

 

Ferrari’s financial results in both the latest quarter and for the year so far this year have simply been stellar:

Aston Martin’s financials at the top of the P&L are quite positive, but it all turns very pear shaped as you drop down.

Getting into a few more details just on the volumes, Ferrari’s numbers are very healthy across the board with only one minor negative in Q3 in China, HK, & Taiwan.  This is more due to model transition than any market weakness.  It’s also important to note that Ferrari’s dealers carry no stock of new cars.  With an order book that now stretches to the end of 2025, all the cars Ferrari produces are to order so wholesale and retail are identical numbers. 

Aston Martin’s numbers are strong on a YTD basis but in Q3 they are starting to show weakness.  The Q3 Americas number, which is Aston Martin’s largest market is very concerning.  Aston Martin claims that they only produce to demand but a quick survey of Aston Martin’s US dealers would indicate that Aston Martin has a very liberal and creative definition for demand.  Aston Martin’s order book for its latest DB12 is best described as “light”.  While the order book Ferrari’s full portfolio extends to over 24 months, in the Q3 earnings call, it was revealed that the ultra-hyped DB12 orders only extend to Q2 2024.

When you start drilling into the cash flow and debt loads the differences are massive .  Positive and growing free cash flow is the definition of a healthy business.  Its near impossible to stay in business long term if you can’t generate positive cash flow.

 

Ferrari’s Free Cash Flow numbers are simply world class

Aston Martin’s Free Cash Flow numbers are positively abysmal. 

The delta on YTD Free Cash Flow between the two is € 976 mil. Because of this, Aston Martin is having to continuously raise new equity to keep the lights on and service its debt.  That delta is almost the size of Aston Martin’s YTD revenue number.  That great Free Cash Flow is also what allows Ferrari to invest heavily in developing its portfolio and emerging technologies which serves to continue to widen the gap to the competition. 

 

In summary, Ferrari is a cash machine. As a business, Ferrari is in a league of its own and has no discernible competition.  While that gap today is huge it is likely to only widen as Ferrari is consistently and continuously able to invest in developing world class market leading supercars.  With its very tight cash position, Aston Martin on the other hand is limited to facelifts of current models (see DB12) or very extended development times on new (Valhalla). The stock market has clearly voted in Ferrari’s favor as its market cap is over 30 times that of Aston Martin.  On a final note, as far as Brand equity is concerned, the comparison is a bit more subjective without access to Brand Equity measures which neither company share.

 

Note: I do not and have never owned any AML or RACE (Ferrari) shares.

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