The topic of exotic car depreciation is one of those ugly truths no one wants to talk about -- at least no one who owns an exotic car. With the exception of late 90s Internet stock, exotic cars are one of the more effective money vacuums you will ever experience if you take the plunge and buy a new one. There are a few notable exceptions, such as mid-engine Ferraris, but that only holds true if you can get a new one at MSRP (which you can't unless you know the right person or put your name on a list and wait three years).
One extreme example of exotic car pricing collapse is the Mercedes-Benz SLR McLaren. M-B originally planned to build 500 a year for seven years, starting in 2005 and selling each one for $440,000. I just saw an ad in Hemmings Motor News for a 2006 SLR -- "brand new and still at the dealer." The MSRP was listed at $445,000 and the selling price was $335,000. A $110,000 discount on a brand-new exotic? That's like buying an SLR and getting an Aston Martin V8 Vantage thrown in for free! Even for these high-priced toys that kind of drop is a bit nutty.
But as I said, very few cars are immune. The Aston Martin Vanquish, Dodge Viper, Porsche Carrera GT and dozens more were all seen as potentially breaking the curse of exotic car depreciation when they first hit the market. None of them did.
This brings me to a car very near and dear to my heart (and wallet), the Ford GT. Like anyone who buys an exotic, I'd like to see it's market value remain high. But unlike far too many exotic car buyers it's short-term and long-term value won't effect my ownership plans. I bought it because I believe it's one of the greatest cars ever made. I don't plan on selling it today, tomorrow or next decade. And even if I do sell it some day I'll know that owning it was the real reward -- no lame-brained illusions of using it as "an investment" here.
That said, there's an interesting phenomena occuring with GT prices. Production of the last 2006 models ended in October, and as the "new" cars available at dealers have dried up the price of used ones has been creeping up, too. Considering the first models were available in the fall of 2004, and plenty were on the market by summer 2005, we should be well into this exotic's depreciation curve. But it hasn't happened, at least not yet. I've told people since before the car went on sale (and after making it clear I don't really care either way) that the GT will not follow a typical exotic car depreciation curve.
The reasons are simple. Supply and demand determine price, and while 4,000 cars sounds high in the world of exotics, 4,000 mid-engine V8 Fords based off the most successful American race car in history is a piddling amount. I submit that for every dedicated Ferrari fan in the United States there are several thousand Ford fans. And even if only 5 percent of those Blue Oval boys can afford a GT that's still a ratio of 100 to 1 when compared to Ferrari guys. Ford never made a car like the GT before (except the original one, of which less than 200 were sold to the public). It's likely Ford won't make another GT again -- or at least not in my lifetime. There's no upgraded version coming in a few years (ala every mid-engine Ferrari of the past 30 years). In other words, if you want a Ford GT you have less than 4,000 to choose from (200 went to Canada, 100 to Europe, and at least 20 have already been wrecked). Nearly all of them are now sold, and judging by the hundreds of owners I know most guys are like me, they don't plan on selling theirs -- ever.
Who knows, maybe some day soon you'll be able to buy a Ford GT and a Corvette Z06 for the original MSRP of a GT alone. Maybe not.
I do know one thing for certain -- I'm glad I don't have to find out.
By navigator89
on February 16, 2007
02:49 PM
Speaking of exotics, back on Jan 26, you posted that there was an R8 story coming. Whatever happened to that, is it still coming?
I too would never sell a GT, or any exotic if I had one. Like you said the ownership experience is soo amazing that there really is no point.
By joymin7
on February 17, 2007
07:04 AM
Comment Ford GT. Yes I agree with you the GT will more than likely hold much more of it value. Would like to know your opinion on the GTX1. There are several owners considering this conversion. What do you think the conversion will do to the value ? A commit on the risk and pit falls (if any) from doing this. to the car.
Judson Minyard
joymin7@charter.net
By ownagt
on February 17, 2007
02:43 PM
'Agree 100% with your comments. I too own one and I certainly didn't buy it as an "investment"(!) although in time it probably will prove to be a good one. Though my assertion that a pristine, unmolested GT will be worth around $500K in about 20 years drew chuckles from many on the Ford GT Forum, I still believe my assessment will prove correct ...for many of the reasons you mentioned as well as a few others.
By editor_karl
on February 18, 2007
01:31 AM
The GTX1 is a tough call. Normally any modification to a car will hurt its value, but there are exceptions (turning a Ferrari Daytona coupe into a Spyder basically maintains its value, because the "damage" of altering it is offset by how many people really want a convertible version, and only 124 were built that way from the factory). The biggest factor in how much a modification will hurt value is the quality of the modification. Do a hack job on any car and its value will plummet.
The GTX1 is a superb conversion. Both the functional execution and the look are top-notch, likely because a key member of the original Ford GT team (Kip Ewing) was the mastermind behind the GTX1 conversion. So, while my instinct suggests the GTX1 conversion will hurt value, the actual look and functionality of the conversion may offset the typical reduction that any mod will usually cause. I'm such a huge fan of the basic car's look that I can't justify the cost to mod it, even though I also like the GTX1. But if I had a second GT I would seriously consider it.
BTW, plenty of people out there have bought more than one GT, and there's a guy back east who has EIGHT (one of each color).
By hapc
on February 20, 2007
01:36 AM
I own a 2006, fully optioned, but w/o stripes, black on black GT. (#1131) It is an absolutely beautiful car and I agree that it will remain valuable. I also own a 2003 BMW Z8; another exotic that has been holding its value. I guess I have been lucky with my choices.
Hap
By editor_karl
on February 20, 2007
10:12 AM
The Z8 remains one of my favorite exotics from recent times. Another stunning vehicle from a design standpoint (which could be the single most important element of a vehicle retaining its value...).
By otaku18
on February 25, 2007
07:49 PM
I wouldn't sell mine either...If I had one. When it comes to exotics/supercars the GT is the best buy. Jeremy Clarkson of top gear owns one also and for good reason.