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The era of buying top sports cars cheaply seems to be over

The era of buying top sports cars cheaply seems to be over

Henry N. Manney III, a motoring journalist best known for his extensive writing in Road & Track magazine bought a Ferrari 250 GTO in the late 1960s. One of only 36 cars ever built was Ferrari’s $18,000 top-of-the-line sports/racing car in 1962. When the cars first rolled off the line, company founder Enzo Ferrari had to personally to approve.

But less than a decade later, when Mr. Manney bought his GTO, he paid less than a third of its original price. Today the car may be worth more than $60 million, with a 1963 model sold for $70 million in 2018

With that purchase, Mr. Manney, who died in 1988, became a bit of a legend, a folk hero and role model for people of ordinary means who through the miracle of depreciation could buy and enjoy truly special cars. It’s a pastime that ordinary car enthusiasts may not be able to partake in today.

For now, depreciation cycles for high-end sports cars are clearly doing something unusual. In the past, these cars would lose a large percentage of their value soon after being sold. From there it was a long slog to the bottom of the depreciation curve, where cars would often languish for years, sometimes decades, before nostalgia-driven interest pushed values ​​back up. Collectors would tend not to notice until a car’s value had regained its original price.

But lately, depreciation curves seem to have gotten much shallower and valuation seems to be happening much faster than in the past. That could spell an end to today’s middle class that dreams of buying ambitious cars for a penny of the dollar.

“Sometime in the mid-2010s, the paradigm around high-end sports cars shifted,” said John Wiley, valuation analysis manager for Hagerty, the auto insurance company. “While cars like the 2005 Ford GT, 2005 Porsche Carrera GT and 2003 BMW Z8 had all suffered modest depreciation after five years, the next generation of high-end limited-edition sports cars such as the McLaren P1, the new Ford GT and Porsche 918 Spyder was all appreciated after five years.”

Art Mason, a commercial airline pilot living in Pennsylvania, had his own dreams of owning Ferrari. While his dreams weren’t as lofty as Mr. Manney’s, in 2008 he still bought a 1982 Ferrari 308 GTSi, complete with warranty, for $35,500.

“That price was just over half of what the car cost new, and 308s had been available in that price range for almost 20 years,” he said. “For a kid from West Philly who spent his childhood pushing his nose against showroom windows, the idea of ​​owning a Ferrari was a big deal.”

Mason sold the Ferrari for $36,000 about 10 years ago, but today that 308 could fetch $100,000, or a third more than its original list price.

The idea of ​​owning a Ferrari for half the price new or less is fading fast. An early 2000s 360 Modena with a manual transmission is already about $25,000 more expensive than its original price, of about $150,000. Ferrari’s depreciation trajectory is nothing like that of its ancestor, the 308.

“So many people are willing to pay significantly more for cars than collectors were in the past,” said Mr. Mason. “As much as I loved being a Ferrari owner, it just doesn’t appeal to me at the prices the cars are now bringing in. A lot of these cars are just shoved into large collections and hidden away. It seems like proof that enthusiasts like me don’t own these cars. buy more.”

Neil Gellman, a real estate agent from St. Louis, had wanted a Porsche 911 Turbo for most of his life.

About eight years ago, he realized that 911 Turbos from the early 2000s had become conspicuous and almost unbelievably cheap. He bought a 2001 model with 39,000 miles on it for $36,000.

“The car cost over $100,000 new,” said Mr. gellman. “I couldn’t believe I could buy a barely used 911 Turbo for under $40,000, which was essentially the price of a new Camry.”

Today, the value of that car is approaching its original selling price. Afterwards, Mr. Gellman realizes that he bought his car at the bottom of the depreciation curve. “I never expected the car to increase in value so quickly. I might have held it,” he said.

Typically, Mr. Wiley of Hagerty noted, cars like used Porsche 911 Turbos would hit the bottom and then stay there for a while.

“Up until about 2011, a 911 Turbo from the 80s could still be bought for less than half the original price,” he said.

Now new 911 Turbos sell for more than their original price, and no existing model seems to be declining in value. In fact, some 911s of certain vintages appreciate quite quickly, especially those with manual transmissions, said Mr. wiley.

“It’s difficult to come up with a precise explanation,” he said. “The cars have definitely gotten more expensive, and people may be using and valuing them differently, less miles on them, and maybe there’s also a realization that we’re approaching the end of the pure combustion era of the car, and these cars will be like be considered very special.”

Lamborghinis are also increasing in value. The Gallardo was the company’s best-selling car, with more than 14,000 sold from 2008 to 2018. It was a huge number for a boutique manufacturer, who had made a total of about 30,000 cars before the Gallardo came out. By 2019, the earliest vintage Gallardos had bottomed out in the $80,000 range, about half their original cost. Today, those cars cost over $100,000, while the rare manual transmission Gallardos sells for over $200,000.

There is also the current supply-demand reality.

Many of the new sports cars being produced in smaller numbers actually start at prices significantly higher than the actual retail price. Recently, Mr. Mason, the Pennsylvania pilot and former Ferrari owner, bought a new Porsche 718 Spyder.

“I may have been the last regular person to buy one at list price, and I would never have paid a premium, but from what I understand, people pay over $30,000 over the MSRP to get one. Although a buyer under In those circumstances that extra dealer price may not recoup, I don’t expect my car to drop in value much.”