History About To Repeat

[husker boxster]

Very interesting article in Hagerty about the meteoric rise of Ferarri prices in the late 80s followed by catastrophic decline in the early 90s. Sounds strickingly similar to our current environment. Are we approaching the cliff's edge?

https://insider.hagerty.com/trends/the-oral-history-of-the-ferrari-bubble/?utm_source=SFMC&utm_medium=email&utm_content=MED_UN_NA_EML_UN_SaturdayRoadTrip&hashed_email=ad337f402179eec74c4701433848a0c1d7fff 267922858e66c911cae60208d91&fbclid=IwAR3cg6lhknGM71qfrscvsZMX__QM6Li2Wo3hju5Wn LfPCM1WrI04qNolMgA

[ike84]

New car prices won't come down until the market is saturated with chips again. This won't happen until asia is back to full capacity, which ain't happening tomorrow. Until then, used car prices will continue to climb (although it will be interesting to see what happens as more people will need to turn to banks for financing because of the rising prices, only then to be faced with massive interest rates). When the dominoes do line up though, there will be a lot of people with a 20 year old used old car in their driveway and a bad case of buyers remorse.

The Ferrari bubble was wild though. A good friend of mine, van shappley, became a very very wealthy man riding that market. That was a very different beast though, fueled by opulence and economic prosperity, which crashed as analog supercars became a thing of the past along with the wild wave of modernization that characterized the 90s.

Fun thought exercise!

Sent from my SM-G970U1 using Tapatalk

[husker boxster]

Originally Posted by ike84

New car prices won't come down until the market is saturated with chips again. This won't happen until asia is back to full capacity, which ain't happening tomorrow.

Totally agree, the new car shortage is fueling the problem (along with inflation) and will influence the entire mkt until factories have enough chips for full capacity. But I find it interesting now that dealer lots are filling up. I haven't taken the time to see if they're charging outlandish prices for the cars on their lot, but I assume they are. It also appears that people can order a new car and not have to wait a lifetime for it to arrive. That will ease the impact. People were used to going to the dealer and buying what they were looking for that was on someone's lot (instant gratification). For a while there weren't any new cars available, so people seem to be willing to adjust to waiting if they can get what they want.

Dealers are still doing their "your trade-in isn't worth anything" (old habits die hard). A club member was looking for a Boxster and she purused the Porsche dealer car finder website. She found one coming in to KC and snapped it up. She kept her 08 Box cuz they wouldn't give her a fair price for it. Now, the dealer in KC is notorious for being a bit less than even handed, so maybe it's just them. Every sports car our dealer gets is pre-sold before it arrives. They get an odd Cayenne or Panno that arrives w/o an owner, but they last about 2-4 days before it's sold. Our dealer had 7 cars on the ship that sank and evidently the next ship had issues with high seas breaking several cars loose and playing bumper cars. 3 belonged to our dealer.

And I meant to add a ? to my title. Got in a hurry to write the body and missed it during QC. The crash may still be 6-9 mo out because of chips. If the stock mkt crashes, will the fat cats move to 'hard assets' like cars like they did in '88? That might push the expansion of the sports car / collector bubble for a bit longer. If the fat cats move into high end cars, that will mean the fall will be bigger when it happens. I'll be watching for bargain TTs and GT3s, but I've always wanted a 987 Spyder. It may take 5 yrs for the prices to bounce back, but that would be a fun 5 yrs of driving and enjoying a dream car at a bargain price.

[ike84]

I agree with you. When the crash happens it will be hard on those who landed foresight or has no other choice than to buy right now.

I'm not sure about investors dumping into material goods in the near future, at least not right now. I follow financial markets pretty closely (another hat I wear for the family lol) and I can tell you that everyone is nervous right now - institutional as well as personal investors. Equities AND bonds (corporate and Treasury) a, hell-even most commodities - are being unloaded from balance sheets at an unprecedented rate. New issue bonds may start gaining traction over the next 6 months with rising rates but even that's not a guarantee. I guess my point is that I'd doubt if investors will take that cash and dump them into the 986/996 market. I could be wrong about that but a lot of people are learning hard lessons right now about foolish investing tactics that made them a lot of money over the last 2 years and took it all back in the last 6 months (unless you were smart enough to pull out before Xmas ) and I don't see them running to cars as the next nasdaq boom. But, as always, I could be completely wrong lol.

Sent from my SM-G970U1 using Tapatalk

[Benitom]

I was eyeballing running Porsche 911 SCs in the 20-25k range pre-covid now they are 50-60K hopefully the bubble bursts someday.

[husker boxster]

I'm starting to see prices drop a bit. Not sure if it's the start of the fall, probably just receeding a bit from the high water mark of early spring. There was no way the prices could continue up from winter into summer. It could also be the mkt is now flooded with everyone's crap (thinking they can cash in on the high prices with their junk) and it's influencing the mkt. But there are better prices out there if you look, along with the still outrageous high prices.

I mentioned Spyders earlier. For fun I recently did an autotempest search and was shocked to see they're in the $75-95K range! The higher end were ultra low miles, but wow. Back in Mar 2021 I had been eyeing an '11 Spyder for sale on PCA. It was black with sport seats (referred to as 'pillow seats' vs the carbon buckets) and 40-43K mi. It was probably on the bottom of the desirability scale of that vintage Spyders because of paint color, seats, and miles. It had been on PCA for about 2 mo. I was going to buy it when I sold the shark, however it sold a wk before I could snag it. The price? $46K.

[rick3000]

The normal used car market won't correct until chips and new cars are available again, but collectible cars will probably see a decline back to sane levels. I've already started to see it in some other luxury/collectible markets.

Not sure if anyone else here is into watches, but people where buying $10k MSRP Rolex's for $20k thinking they could flip them for $30k up until a few weeks ago, when the bottom fell out of that market. They still sell for over MSRP but not triple anymore. The froth and excess is coming out of the market, and I think that is a good thing.

[husker boxster]

The bubble has burst. Prices are dropping. Almost half of car loans have people alarmingly under water. Many loans are 90 days late. Repos are up. Used inventory at dealer lots is up (no one is buying their high priced cars). Repos will be flooding the wholesale mkt. Buckle up, the roller coaster is heading down.

I won't be buying a Spyder, however. Something in the works. More on that later as paperwork proceeds. Keep an eye out for that info in my Wheeler Dealer thread.

[ike84]

Originally Posted by husker boxster

The bubble has burst. Prices are dropping. Almost half of car loans have people alarmingly under water. Many loans are 90 days late. Repos are up. Used inventory at dealer lots is up (no one is buying their high priced cars). Repos will be flooding the wholesale mkt. Buckle up, the roller coaster is heading down.



I won't be buying a Spyder, however. Something in the works. More on that later as paperwork proceeds. Keep an eye out for that info in my Wheeler Dealer thread.

I'm not so sure, backlogs for new vehicle deliveries are still so far behind that the repos may just help knock that problem down a bit. While some prices may be dropping, I see that more as a function of gas prices than car values. I could be completely wrong though, it will be interesting to see!

Sent from my SM-G970U1 using Tapatalk

[husker boxster]

Originally Posted by ike84

I'm not so sure, backlogs for new vehicle deliveries are still so far behind that the repos may just help knock that problem down a bit. While some prices may be dropping, I see that more as a function of gas prices than car values. I could be completely wrong though, it will be interesting to see!

Sent from my SM-G970U1 using Tapatalk

Yeah, I wasn't specific in my last post but I meant the used car mkt. When the pandemic started and the chip shortage hit, the lack of new cars defn drove the price of used up. But it seems new and used have decoupled now. New buyers have converted from buying what's on the lot to putting in an order and waiting or watching the incoming sheets and snagging an unsold car before it arrives. We had a breakfast Sat at our dealer and the sales mgr said they sold 30 new cars in June - a record. But of all the cars they had on the showroom floor, only 1 was for sale - a 911 speedster for $420K. Mention my name if you decide to buy it.

[ike84]

Hah! Maybe they'll take a lake house for a swap deal?

Sent from my SM-G970U1 using Tapatalk