We’ve previously discussed the air-cooled bubble and how to invest in cars on these pages, not to mention the reason new cars are so slabby these days, but we’ve really just been circling around the Contemporary Classic Car Phenomenoni without actually landing on it, which seems as worth the bother as ever. So let’s.
Our case studies today will be divided into three parts spanning three decades. The first is the McLaren F1 from the 1990s, the second is the Porsche Carrera GT from the 2000’s, and the third is the 2010’s Ferrari LaFerrari.ii
#1 McLaren F1 - Costing $800k before the dot-com bubble made every Tom, Dick, and ESR a bajillionaire,iii at a time when interest rates were closer to 10% than the 0% at present, the F1 was something of a sales failure. So it was that from 1992 – 1998 only 106 cars rolled off the assembly line in Woking. This meagre production figure, however, combined with an approach to over-engineering that can scarcely be fathomed today, even half-wrecked examples are now fetching $10mn when the gavel drops at Sotheby’s. This, from a stable valley in its depreciation curve of around $1mn in the mid-2000s. But that all makes sense, that’s what classic cars do : they depreciate when driven off the lot and then pick-up steam after a good two or three decades of nostalgia have set in.
#2 Porsche Carrera GT - Like the Macca, Porsche planned to build considerably more cars than there was appetite for in the market. From 2003 – 2007 only 1`270 cars rolled off the assembly line in Leipzig compared to the 1`500 planned for during design. At a sticker price of $450`000 at a time before every Tom, Dick, and JPM were swimming in home equity up past their giddy gills, there simply wasn’t demand for impossible-to-street hypercars.iv After finding a depreciation valley in the $300k range as recently as three years ago, they’ve now rebounded closer to $700k, not even double their MSRP from a decade ago. This represents a quicker rebound than the F1 but is still not altogether radical for a classic car.v
#3 Ferrari LaFerrari - Janus-like enough in its personality to both race and street with equal ease, largely on account of simply magnificent advances in dual-clutch gearbox technology, the LaFerrari sold out instantly in 2014. All 500 units were spoken for before it was even publicly announced, idem the 500 units of the drop-top Aperta version launched in 2017.vi They were all gone. Just like that. Despite a sticker price of $1.5mn before options, the three-year-old coupes are still trading hands for treble that.vii This represents a sharp departure from the pricing patterns set out by examples #2 and #3.
So what’s changed over the intervening decades aside from criminally low interest rates ? Well, there’s definitely that,viii but there’s also the declining accommodation for hot, cramped, uncomfortable, smelly old cars. The newly sanitisedix aesthetic everywhere present from architecture to smartphones – perfectly embodying the “I just want to” of the modern age – means that cars capable of 400kph are also expected to go through the In-N-Out drivethru and hold a venti Starbucks latte in the cupholder at the same damn time. Windows don’t roll down in your 1955 Mercedes 300SL Gullwing ? That’s a minus. No cupholder either ? That’ll never get you laid.x Clutch is fussy and you always stall ? Well that’s just a deal-breaker.
And that’s just the superficial layer. In reality, the CCCP is deeper than even that. With ever-increasing population density,xi gross increases in the criminalisation of driving at speed,xii the extreme pressures of always-on digital media for you to look every bit as wealthy as your credit score permits,xiii not to mention the secular decline in mechanical fluency,xiv what was once the passe-temps of the slightly unhinged in the refuge of winding mountain passes is now being forced into the Instagrammed prison of low-speed urban transport. Where once high-speed cars were tools for traveling at high speeds, in much the way that a Rolex was once just a tool for telling time, both cars and watches have become luxury and status symbols ; most importantly, ones with the potential to flatter their owners as “investors.”
So what does this mean for you ? As a speculator, it means that it’s never too early to develop connections with your local Porsche and Ferrari dealers as those are the two brands with a) the most heritage to leverage, and b) the highest levels of technology and innovation in their new products.xv It’s this unlikely mix of past and future orientations that’s so intoxicating for the upper echelon of new car buyers and therefore the most profitable cocktail for speculators catering to them.
Otherwise, it’s just another reminder that altcoins comes in all shapes, sizes, and speeds. And what speeds.
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- Not to be confused with other, more notable, if less profitable, CCCPs.↩
- “LaFerrari” is one of the more tautologous model names in recent memory, one readily grants, but no one ever blamed Ferrari of excessive modesty or subtlety either. ↩
- However fleetingly, temporarily, and entirely on paper. ↩
- The CGT is infamous for its absurdly finicky clutch that embarrasses even the most experienced supercar and hypercar owners in driving around town, which, yes, is a critical aspect of contemporary performance car ownership : seeing and being seen. ↩
- Which still makes the CGT a terrible investment! Don’t forget that a replacement clutch is needed every 30k miles or so and it’ll set you back $20k including labour, or that a mild fender bender will be $20k for a bumper and $30k for a hood, or that a blown engine is $262k just for the part! Even if you’re just insuring the thing and pouring in enough fuel to drive just 300 miles per year, the running costs are just out of this world.↩
- In fact, Ferrari had their pick of the litter and chose customers based on their own internal criteria, including but not limited to number of other Ferraris owned, length of time as a Ferrari owner, number of other interested parties in your geographic area, etc. ↩
- Other recent examples of limited edition performance cars that’ve exploded in the second-hand market are the Porsche 911R (MSRP $200k, 2nd-hand $600k), Porsche GT3RS4.0 (MSRP $250k, 2nd-hand
$500k$750k), Ferrari 458 Speciale (MSRP $300k, 2nd-hand spiked to $600k, now back down to $400k), Porsche 918 (MSRP $1mn, 2nd-hand $2mn), and McLaren P1 (MSRP $1.4mn, 2nd-hand $3mn). ↩
- Americans aren’t so different from Argentines at this point in history, not anymore, for it’s indeed the case that classic cars are a better store of value than Trump’s toilet paper, as with the peso. ↩
- Which is to say Utopian and Platonic, quite in spite of all the Aristotelian “we believe in science” rhetoric. ↩
- This is how guy (not man) thinking works. Or largely doesn’t. Sorry girls. ↩
- At least between now and WWIII, which can scarcely come soon enough for the US, Asia, and Europe. Canada is blessedly diffuse.↩
- Everywhere outside of Germany’s autobahns and Middle Eastern deserts, that is. ↩
- This digital media pressure influences itself by awarding extra nose-tapping points to owners of THE LAST MANUAL or THE LAST NATURALLY ASPIRATED car of a lineage. ↩
- Do you know how a fridge works ? Aha. Thought not. ↩
- I hesitate to suggest McLaren to speculators because of the risk involved in the newly revived brand, particularly as it relates to quality control from the factory, the relatively huge production numbers, and McLaren’s insistence on diluting rare sub-models with never-ending sub-variants at unknown and unknowable rates (eg. the 675LT was supposed to be limited to 500 units and was pitched as such to the first crop of buyers, only to have another 500 convertible units added to the market shortly thereafter, after which followed 25 carbon fibre-bodied “MSO” units in each of the coupe and convertible styles. So 1/500 became 1/1050 in no time flat, assuming that McLaren is not creating special cars for special customers on the down-low, something Ferrari has also long been accused of and something nearly impossible to verify.) ↩