State of Exotic Cars – October 2017
September was brutal for certain cars, but as October started, we have noticed that the overall market has tanked almost everywhere from the almighty GT3RS to the older LP640; just about every exotic. However, that doesn’t mean they will stay down.
Let’s take a moment to understand why September and October are harder months for the car industry overall.
New 2018 models are announced and early orders start showing up. Most people know that new model year cars are often sold and delivered in their previous years. Such as 2018 models being delivered in 2017.
When new models start coming in, pricing on older models will decline simply to accommodate the upcoming influx of future cars on the market. The problem becomes the fear of dealers which drives rebates on new models, driving used models even further down in price.
If a dealer discounts existing new inventory $30K per car, then a used car is now worth even less as a brand new car being had for $30K below sticker.
This usually starts showing its face in September to December each year. This is also done typically as dealers have an influx of customers seasonally in those months, making offers even more enticing.
As new models flood the market, used car dealers look for opportunities to start buying cars they expect to be selling strong during their best 4 months. This need to buy inventory means that they need to liquidate anything that isn’t selling in order to prepare for a good holiday season by having capital on hand to buy.
This forces models that have been sitting to come down even more as they are liquidated rather than sold at retail.
These basic concepts show huge loss of values for many makes and models, both newer and older. Some models hurt more than others and as a result, the markets starts shifting.
Now lets look at some opportunities and changes that have happened this last month.
The 2017 Acura NSX took a major plunge when Honda announced that Acura Dealers would receive a $30K rebate on every new Acura NSX model sitting on their lot in order to make room for 2018 models. Dealers quickly moved to free up capital by advertising lower prices on cars ranging from $200K down to $170K. Showing lowest priced cars selling at $140k all the way up to $170K. Massive drop which creates a great opportunity to buy what I call, “one of the hottest and most capable exotics on the market” for a bargain price. The Acura NSX market is still too new to promise a “drive for free” experience or a profitable one, but it still is quite a lot of car for the money.
The Lamborghini LP640 dropped just enough despite having held for quite some time around the $180 to $205K range. We have seen last month bring prices down between $150 – $170K for most LP640 models except collector ones with low miles. This drop is from the major loss of value from the Aventador as more Aventador S models push those down even further. While the Aventador is far from a hack just yet, the LP640 is an amazing bargain today and certainly a good opportunity to drive for free from a depreciation standpoint. The car is still an older Lamborghini and may cost you from a maintenance standpoint but hardly from a depreciation one. We still recommend looking at the 2008 for a bargain and 2009 as a better car.
Audi R8 also experienced a significant loss due to the new V10 Gen 2 models coming down as low as $135K. With newer 2017 body cars in such low range, many of the last gen 2014 cars have seen drops closer to the $100K line.
Nissan GTRs are also a great bargain this month with newer 2012+ models being found selling regularly under $65K. This $10K on average drop seems to have happened as a result of the newer 2017 models not selling and starting to sit longer than 100 days at Nissan dealers. Very little support from third party dealers means no trades on wholesale either on second generation cars. Leaving only aggressive sales data and no volume to make a good data decision on how much further first generation GTR’s will be in the next 6 to 12 months.
The 991 Turbo S pre 2017, on the other hand, seems to have done a great job at holding its value so far, despite newer models coming down harder. The 2014 and 2015 seems to be extremely good and stable with their values in the $115 – $120K range with low miles; and apparently not sitting on the market long when advertised well. A great pick up as always, but please keep in mind that 2014’s will soon be out of warranty for the most part and so having an exit strategy prior to warranty expiration will differentiate a loss or gain on the sale.
Hope you enjoyed this brief overview of the car market and I’ll catch you next time with more news on some of the best and worst car models to keep an eye on in the future.