Want to Lose Big Money? Buy a Zillion-Dollar Supercar.

Jim Motavalli

Jim Motavalli | May 17, 2016

It’s easy to get the wrong impression. If you bought the right supercar in the 1960s—a Ferrari GTO, selling for $18,500 in 1962, is worth $40 or $50 million today—your investment was better than Picassos, Beverly Hills mansions or gold coins. But not that many people get lucky (only 39 250 GTOs were built) and most supercar buyers lose money. A lot of money.
 The Bentley Arnage may be beautiful, but you may be better off with a Toyota Corolla. (Bentley photo)The average new car faces a 15 percent depreciation each year, and it really adds up to serious coin when the purchase price was more than $100,000. “What’s more,” says leasing expert John Sternal, “the maintenance on these higher-end cars is much greater. The fear of maintenance costs can drive away a lot of interested buyers, and that also reduces demand for these cars—and thus lowers the price even further.”
 
Eric Lawrence, editor of Black Book’s Collectible Cars, lists a few shocking examples. An 1997 to 2000 Aston Martin DB7—originally $130,000—is $25,000 to $30,000 today. Add only $10k for the 2001 to 2003 model.
  • The 1994 to 2004 Bentley Arnage, a beautiful brute, cost a whopping $225,000 near the end of its life. But today? You can find a perfectly nice, low-mileage example for $25,000 to $40,000. People don’t believe they can buy pristine Rolls-Royce and Bentley cars for $15,000, but there’s plenty of them out there (often retired wedding transport).
  • A C5 Chevrolet Corvette built between 1997 and 2004 was $45,000 to $50,000 new, but is worth only $15,000 to $20,000 today. The C6 of 2005 to 2013 makes a mere $25,000 to $35,000.
  • Here’s a great big drop: A Mercedes-Benz SL that sold for $95,000 in its 2001 to 2008 lifespan is available for Civic money now--$15,000 to $30,000.
Popular Mechanics looked around and found $60,0000 Range Rover HSEs going for $5,500, a 2009 Cadillac Escalade ESV ($80,000 new) with 115,000 miles at $25,000, and the aforementioned Bentley Arnage, with only 28,000 miles on the clock, for $40,000.
 This Cadillac Escalade will resell for pocket change down the road. Save yourself time by looking under the floormats for loose change now! (Cadillac photo)Ironically, the more options you lard on, the more you can reduce the purchase price. For instance, a 2005 BMW 745i that cost $70,000 new can now be had for $20,000—and you can blame the option list. Popular Mechanics cites “a heavy dose of expensive-to-maintain electronics” for the depreciation.      
 
Sternal said that the old infotainment problem “is a big factor. The more the feature upgrades, the bigger the depreciation. This is true for all cars, not just high end. Another analysis by Black Book showed this as well. The used-car buyer isn't looking for features, therefore the lack of a market makes the price fall even more.”
 This 1997 Aston-Martin DB7 Volante cost a king's ransom new; now its an affordable used car with big maintenance bills. (Aston Martin photo)Phong T. Ly, CEO of ISeeCars.com, is negative on the value proposition. He told me:

While some luxury models tend to lose a lot of their value early on, they still don't drop enough in price to be affordable to many consumers to buy used, so they aren't even on the consideration list for those shoppers. Shoppers who can afford to own or lease those cars would generally prefer to buy the new model or rollover their luxury leased car for a lease on the latest and greatest model, making the used model less desirable to those shoppers.

The Washington Post did a piece on this last year, and concluded “the largest price differences include some sought-after luxury models, including the Mercedes-Benz S-Class, the top-of-the-line Hyundai Genesis and the Jaguar XK.” But the conclusion seems wrong to me, because the paper described these “lightly owned used cars” as “substantial bargains.”
 
I think not. Matt Farah of the Smoking Tire owned a 70,000-mile Maserati Quattroporte. I saw a third-generation example (1979-1990) just like it at the Rhinebeck Car Show last week for $15,000. A bargain? Hell, no!
 
Farah says:

I know what a 70,000-mile Quattroporte feels like. It feels like trash. There’s a reason a five-year-old QP sells for $25,000 at a wholesale auction. The leather may feel nice, the engine may sound good, it may be pretty and it may be fast, but I have loads of experience with exotic cars and these cars do not age well at all in terms of fit, finish and quality. They are unreliable, crazy expensive to repair and maintain, and, in my experience, bits literally fall off them.

In Old Cars Weekly, you can buy a fairly nice looking mid-80s Maserati Bi-Turbo (with one of the most sumptuous leather interiors of any car, ever) for a mere $2,000. My advice: that’s the down payment. Buying any 12-cylinder Jaguar or BMW presents the same proposition—huge maintenance costs for a vehicle with low resale value.
I love the Italian styling of this 1979 Maserati Quattroporte--bellissimo!--but at 70,000 miles pieces will start falling off. (Maserati photo) Buy a lowly Subaru Impreza and the thing will lose just three percent of its value in a year. My 2006 Scion xA (inherited from mom) cost around $13,000 new, and they’re still asking almost $6,000 to $9,000 for pristine examples. My 2007 Honda Fit, $14,000 when we bought it, is still getting $5,000 to $6,500 on CarGurus.com.
 
The bottom line is that you’re paying an awful lot for a year (or two) of bliss in today’s supercars. Here's some $70,000 cars you can now buy for half price, but be careful!

 

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