The simplest way to predict the future value of any car is to research the market.
Frankly, I’ve been doing this long enough that “I just know”.. but that’s not an acceptable answer.
If I was starting from scratch with no car knowledge and I had to learn all over again, here’s how I would research where the value of a car might be going.
Prior Model Years
For cars in the same generation, this is the easiest way to tell where the value is going. For example, the F10 M5 was sold in the US from 2012-2016 model years.
If I was looking at a 2015 with 30,000 miles, and I knew I wanted to keep the car for two years and put 10,000 miles on it, I’d start looking at where 2013s with 40,000 miles are priced today.
The 2015s with 30k miles are listing around $50k today (March 2021), and 2013s with 10k more miles are priced around $40k.
That tells me that buying at retail my risk exposure is $10k, or ~$416/mo.
So my objective would be to acquire a 2015 M5 in the low 40s (using the negotiation techniques taught in Exotic Car Hacks) to cut the risk exposure to closer to $200/mo, which, to drive what was once a $100k car for two years, is an excellent hack.
What happens to values when a new generation of a model comes out, like the new 911 or the new M3?
Again, we look to the older ones.
The 911 is probably the easiest example to illustrate because there are so many. We’ll stick with the water-cooled generations, the 996, 997, 991, and now 992.
Today, a 996 Carrera 4S with ~40k miles is worth about $35k
A 997 Carrera 4S with ~30k miles is worth about $50k
A 991 Carrera 4S with ~ 20k miles is worth about $75k
And a new 992 Carrera 4S MSRP starts at $122k, but with options wind up around $140k.
What you want to look for here is the fact that the previous generations will not be worth less than the ones before it. A 997 Carrera 4S isn’t going to be worth less than a 996 version, etc.
So when looking at the 992 C4S, as more hit the streets in the next 3-4 years we’ll see the early models with 20k miles drop to under $100k and then slow their depreciation considerably. Buying a 2021 today puts you at roughly a $40k risk exposure over 3 years.
The exception to this rule is in the specialty trims like the GT3RS, where you can see low-mile 997s sell for more than 991s because the 997 was the last year with a manual transmission and therefore are becoming sought-after collector classics. But that’s a lesson for another day.
If there are no prior generations for the car you desire, look to see what happened to the market for similar cars, even if they’re from different manufacturers.
Consider the Aston Martin Rapide, Maserati Quattroporte, and Porsche Panamera.
When the Rapide came out in 2010 there was obviously no benchmark for it in the Aston Martin lineup.
Aside from knowing that Aston cars generally have the most overinflated MSRPs of all manufacturers, the only way to tell how far down this car would go is to look at similar cars from other manufacturers.
This brought me to the Maserati Quattroporte, which enjoyed a 6-year run before the Rapide came out and had a ton of available historical price data for me to use to judge against the Rapide.
I ultimately never bought a Rapide because after driving one I realized what a colossal piece of shit it was, but had it actually been a good car, these, like the QPs and Panameras are good buys fully depreciated at 25-30% of MSRP.
The final place I look for future values, especially for brand new cars, is by looking at lease costs.
As I’ve spoken about before, the basic premise of a lease is a long-term rental of a car where you are only paying for the depreciation the car experiences during the term of a lease.
That means that the residual value at the end of the lease term is what the manufacturer expects the wholesale value to be on that car at that time.
For example, if a $250,000 Lamborghini Huracan EVO RWD is leasing for $2,500/mo for 36 months, that means that in 3 years Lamborghini expects an EVO RWD to roughly be worth $140,000.
This can be done with any car from a new BMW 4-Series to a Rolls Royce Dawn and everything in between.
So there you have it, the answer to this and most of life’s questions comes down to one simple word: research.
Lucky for you, if you didn’t learn how to research properly in school, it’s one of the many things I teach in Exotic Car Hacks, where I help regular people get their dream cars without the fear of losing money.
Inside, you’ll also learn how to negotiate to get the price you need, how to get affordable maintenance and insurance, and, of course, how to sell your car for top dollar.