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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November 2023