Supercar Market Update – Q4 2019

Following up on the Q3 car market article (Car Market Q3 2019), I’ve continued to track the Ferrari F355, Ferrari 365 GTB/4 Daytona, and the Porsche Carrera GT, as I believe these are good bellwethers for the market in general.  On occasion, I also take a glance at Koenigseggs, the McLaren P1, and the Special Series Ferraris out of personal interest.  It’s wasn’t too long ago the F355 Spiders were regularly selling in the $90-100k range and market experts were predicting Daytona would be $1 mil cars.  The one car that has held steady in value is the Carrera GT.  CGTs have been rock solid in the $700k range for the past year.  

A few Q4 results of interest are:

NA Mile 1973 Ferrari 365 GTB/4 Daytona, Sold $484k

6k Mile 1970 Ferrari 365 GTB/4 Daytona, Not Sold at High Bid $700k

NA Mile 1972 Ferrari 365 GTB/4 Daytona, Not Sold at High Bid $500k

2k  Mile  2004 Porsche Carrera GT, Not Sold at High Bid of $735k

36k Mile 1995 Ferrari F355 GTS 6-Speed, Sold $48k 

33k Mile 1996 Ferrari F355 Spider 6-Speed, Sold $76k

26k Mile 1996 Ferrari F355 Spider 6-Speed, Not Sold at a High Bid $45k

600 Mile 2014 McLaren P1, Sold $1.27 mil

1,200 Mile 2015 McLaren P1, Sold $1.12 mil

175 Mile 2015 Porsche 918, Not Sold at a High Bid $1.05 mil

700 Mile 2015 Porsche 918, Not Sold at a High Bid $875k 

550 Mile 2015 Ferrari LaFerrari Sold $2.2 mil

1,200 Mile 2014 Ferrari LaFerrari, Sold $2.3 mil

2,700 Mile 2014 Koenigsegg Agera R Sold $1.35 mil

Which are very consistent with the trajectories seen in Q3.

If the speculators weren’t gone before, they have certainly left the building now. The last generation of limited edition hypercars (No Longer the New New Thing) are yesterday’s news.  In fact, both the McLaren P1 and Porsche 918 are now changing hands below their original list prices.  The people buying supercars today are collectors and enthusiasts.  The collectors only want the best low mileage examples and the enthusiasts want cars they can actually use, enjoy, and afford to keep on the road.  For this second group maintenance and running costs do matter.  A $120K+ battery replacement on a McLaren P1 or a $8k cambelt change on a Ferrari F355 are significant expenses that impact values.  Demographic shifts are also playing a role as the younger generation entering the market has been raised on cars with plenty of driver’s aids and only two pedals to navigate.  It’s pretty easy to put in an impressive lap time in a Ferrari 488 Pista after just a couple of hours out on a track.  Try pushing an F40 to the limits after just a few laps behind the wheel and it is likely to end in (expensive) tears.   

When looking at the each of these cars, different factors are impacting values.  Of all the cars listed above, the Ferrari 365 GTB/4 Daytona wins the award for most demanding to drive, by a considerable margin.  If many of the 50’s classics can be described as “tractors to drive”, by the late 60’s they had evolved to slightly more driver friendly “trucks”.  If trying to navigate a Daytona around town is a full upper body work out, getting a Daytona to slow down sufficiently when entering that town can be an underwear soiling experience ( Driving a Daytona ).  Not too long ago a lot of speculators scooped up Daytona’s expecting them to be the next $ 1million Ferrari.  When that didn’t happen, a lot of these cars started reappearing on the market with the odometer having barely, if at all, moved.  Sellers outnumbered buyers and prices started dropping.  The number of Daytona “no sales” at auctions over the last several years is exceptional high and that trend has continued in the last several quarters.  For today’s coming of age enthusiast, the Daytona is ancient history and not the car they lusted after in their youth.  About two years ago I expected Daytona’s to retreat back from $700k to $500k.  Recent results are already under the $500k level and I would not be surprised if Daytona’s drop to $400k in 2020.  

Much to my chagrin, as the Carrera GT has been high on my bucket list for several years now (Garage Goals), Carrera GT values are holding steady.  Many of the same factors that have been driving Daytona prices south, have been supporting Carrera GT values so far.  CGTs are the cars that the new generation of buyers lusted after in their youth.  New tire technology has made CGTs significantly more drivable and a track outing is far less likely now to end in a life insurance payout.  Where I do see a bit of a disconnect with the CGT though is between its reputation as being one of the greatest driver’s cars and the fact that of the 11 CGTs currently listed for sale in the US, 4 have under 1,000 miles on the odometer and only one has more than 5k miles.  Even the highest mileage car listed, at 7,134 miles works out to an average of under 500 miles per year.  If I look at Ferrari Enzos, which are a similar age, 3 out of the 5 sold at auction this year are well over 5k miles. Whereas many Ferrari owners are very sensitive about putting miles on their cars, Porsche owners tend to be the opposite.  The question therefore is why, if CGTs are such great driver’s cars, are so many not getting driven?  My guess is these ultra-low mileage CGTs were purchased as investments and now that it’s clear that prices have stabilized, those owners want out.  Question is are these owner’s patient enough to ensure that demand and supply stay balanced or do a flood of low mile CGTs now hit the market driving price back to 2014 levels?

I believe the Ferrari F355 is today’s “starter” Ferrari (Our 1st Ferrari).  With prices continuing to slowly recede into the $40-50k range, the F355 is just a bit over half the price of a new Porsche 718 Boxster.  The F355 is modern enough so the learning curve is short, and it’s got enough drivers aids to provide a decent level of comfort for the less experienced supercar driver.  The F355 is usable car by supercar standards with enough luggage room for a multiday trip which certainly aids in its appeal.  It doesn’t hurt that the F355 is one of the prettiest Ferraris to ever emerge from Pininfarina’s pen.  Given Ferrari built over 10,000 F355s there are always plenty for sale and a strong community of owners who can be called upon for support.  F355 prices will also be held down by very high maintenance costs.  Cambelt changes every four years and a long list of known issues will always make this an expensive Ferrari to own. My guess is F355s are now well priced and will hold around current prices.

Koenigseggs have operated in a very different value universe for multiple years now.  In less than a decade Koenigseggs have gone from little known to quite famous.  Prices on their new cars have risen astronomically and they have developed quite a following.  In the recent past, Koenigesgg has gone to considerable lengths to make sure it’s cars sold at or above estimates (Car Market Q3 2019) when one has shown up at auction.  I’ve also seen a number of used Koenigseggs move from dealer to dealer with ever inflating prices so what they are really worth to a buyer who actually is interested in owning and driving one, is hard to tell.  However, recently a 2,700 mile 2014 Koenigsegg Agera R was sold at auction for $1.35 mil. (vs. an estimate of $2-2.5 mil).  The original list price on an Agera R was $2.1 mil. Assuming this car was still owned by the first owner and with a few options thrown in he paid around $2.2 – $2.4 mil, each of the 2,700 miles driven came at a cost of $315.  In terms of depreciation percentage, not only has my McLaren 650S Spider done better but when compared to other similar age hypercars (P1, 918, LaFerrari), this Agera R is by far the worst performer in terms of holding value.  The question is does this result finally pop the bubble and put Koenigsegg’s whole inflationary pricing strategy at risk.  

In summary, the Porsche Carrera GT is at a potentially interesting inflection point. Prices may continue to hold, or a modest drop may be in the not too distant future if many of the “investment” acquisitions of the 2012-2016 era are dropped back into the market. Both the Ferrari 365 GTB/4 “Daytona” and the F355 rode the market up in 2013-2016 and while the F355 has more or less settled, the Daytona will likely still fall further. Koenigseggs prices might have just had their Titanic moment, with a large hole now ripped in the side of their pricing strategy. 2020 will certainly be an interesting year.

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One Thought on Supercar Market Update – Q4 2019
    CraigM
    25 Dec 2019
    12:58pm

    There are some CGTs which are being used appropriately at least, admittedly it took a rebuild to trigger this use, but never the less its good to see some enthusiastic use rather than speculative storage … https://www.theoctanecollection.com/cars/porsche-carrera-gt-4-for-sale/

    Seems a worthwhile purchase if you are really a driving enthusiast looking to load the miles. 😉

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