FYI: Depreciation is a key factor when purchasing a vehicle, particularly concerning high-performance cars, which rapidly lose value over the years.
D is for Depreciation
For many buyers, depreciation is an indispensable factor when purchasing a new vehicle. It’s essentially money vanishing from your pockets, never to be seen again. This is particularly irksome given that a car, besides a house, is typically one of the most significant purchases most people will make in their lifetimes.
Credit: Alamy Stock Photo
According to iSeeCars, before the COVID-19 pandemic, the average car would lose approximately 50% of its value over five years. As of 2023, the depreciation rate has decreased slightly to 38.8%, which is still substantial. Electric vehicles are among the worst hit, depreciating around 50% in value. Supercars fare no better.
Hagerty provides insights into the depreciation trends of modern supercars, noting high-performance cars typically lose about 20% of their value within three years. For instance, Ferrari models like the 488 Pista depreciate less compared to the Porsche 911 GT2 RS, which can lose up to 30% of its value.
Factors Influencing Supercar Depreciation
Several factors contribute to the depreciation of supercars:
- Market Demand: High initial demand may weaken over time, reducing value.
- Hype at Launch: Initial excitement can diminish quickly, impacting resale values.
- Regional Differences: Depreciation rates can vary by region, with Italian brands generally performing better than German and British models.
- Specifications: Attributes such as power and technology don’t always shield a supercar from severe depreciation.
Combating Depreciation on Supercars
While depreciation is unavoidable, here are some strategies to help preserve a vehicle’s value:
- Buy Pre-Owned: Purchase a well-maintained used supercar to avoid the initial depreciation hit. Used car prices vary by state, so consider using a transport company for car shipping if you find a good deal.
- Maintain Meticulously: Adhere to the manufacturer’s maintenance schedule and keep detailed service records.
- Limit Mileage: Use the supercar selectively to keep mileage low.
- Proper Storage: Store your vehicle in a climate-controlled garage and use a car cover to prevent wear and tear.
- Keep Original Condition: Avoid modifications; if necessary, make sure they are reversible and retain the original parts.
- Choose Models with Better Resale Value: Research models with historically better resale values.
- Opt for Limited Editions: They tend to retain value better due to rarity.
Beyond these strategies, it’s essential to enjoy your supercar. Balancing usage with preservation can make the experience gratifying while maintaining some value. Remember, if the goal was purely financial preservation, a supercar would not have been the purchase of choice.
Maserati GranTurismo
Credit: Top Gear
Initial Price: $159,995
5-Year Depreciation Rate: Approx. 67%
Despite its elegance and performance, the Maserati GranTurismo is notorious for high depreciation costs. The car’s lack of reliability and the exorbitant maintenance and repair costs contribute to its rapid value decline. Additionally, the limited number of Maserati dealerships in the US further complicates maintenance, leading to higher expenses.
Jaguar F-Type SVR
Credit: CarBuzz
Initial Price: $123,600
5-Year Depreciation Rate: Approx. 66%
The Jaguar F-Type SVR, despite its stunning performance and aesthetics, suffers from poor reliability. Producing 575 horsepower and a top speed of 200 mph, it’s overshadowed by its expensive maintenance and frequent repairs. This has considerably affected its value even within the first year.
McLaren 570S
Credit: Piston Heads
Initial Price: $192,500
5-Year Depreciation Rate: Approx. 65%
The McLaren 570S, a high-performance, visually arresting machine, is another example of severe depreciation. Contributing factors include a perception of less robust build quality and oversupply, which adversely impact resale values.
Tesla Model S
Credit: CarBuzz
Initial Price: Starting at $74,630
5-Year Depreciation Rate: Approx. 63%
The depreciation of electric vehicles, including the Tesla Model S, is driven by rapid technological advancements and frequent new model releases. The lack of government subsidies for used Teslas further diminishes their appeal. Battery degradation and the high cost of replacements also contribute to the steep depreciation.
BMW i8
Credit: Piston Heads
Initial Price: Starting at $148,495
5-Year Depreciation Rate: Approx. 63%
The BMW i8, with its futuristic design and hybrid technology, presented an exciting plug-in sports hybrid. However, its high initial price, niche market appeal, and competition from more established supercars led to significant depreciation.
Conclusion
Depreciation is an inevitable aspect of owning a supercar. While certain strategies can help mitigate this decline, it’s essential to strike a balance between preservation and enjoyment. Ultimately, the thrill of driving a high-performance car outweighs the financial considerations for many enthusiasts.
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William Rapp, Editor of Automotive.fyi
Email: tips@automotive.fyi
X: @automotivefyi
