The Era of Buying Top Sports Cars Cheaply Seems to Be Over

Henry N. Manney III, an automotive journalist best known for his extensive writing in Road & Track magazine, bought a Ferrari 250 GTO in the late 1960s. One of just 36 ever built, the car was Ferrari’s $18,000 top-of-the-line sports/racing car in 1962. When the cars first rolled off the line, Enzo Ferrari, the company founder, had to personally approve every buyer.

But less than a decade later, when Mr. Manney bought his GTO, he paid less than a third of its original cost. Today, the car might be worth over $60 million, with a 1963 model selling for $70 million in 2018.

With that purchase, Mr. Manney, who died in 1988, became somewhat of a legend, a folk hero and role model for people of ordinary means who were able to buy and enjoy truly special cars through the miracle of depreciation. It’s a pastime in which rank-and-file car enthusiasts might no longer be able to participate today.

For the time being, depreciation cycles for high-end sports cars are clearly doing something unusual. In the past, these cars would shed a large percentage of their values soon after sale. From there, it was a long slog to the bottom of the depreciation curve, where cars would often languish for years, sometimes decades, before nostalgia-driven interest drove values up again. Collectors would tend to take notice only when a car’s value had regained its original price.

But recently, depreciation curves seem to have gotten far more shallow, and appreciation appears to be happening much sooner than it did in the past. That may spell an end for today’s middle-class who dream of buying aspirational cars for pennies on the dollar.

“Sometime around the mid-2010s, the paradigm shifted around high-end sports cars,” said John Wiley, manager of valuation analytics for Hagerty, the classic-car insurer. “Whereas cars like the 2005 Ford GT, 2005 Porsche Carrera GT and 2003 BMW Z8 had all experienced some modest depreciation after five years, the next generation of high-end, limited-production sports cars like the McLaren P1, the new Ford GT and Porsche 918 Spyder had all appreciated after five years.”

Art Mason, a commercial airline pilot who lives in Pennsylvania, had his own dreams of Ferrari ownership. While his dreams were not as lofty as Mr. Manney’s, he nonetheless bought a 1982 Ferrari 308 GTSi, complete with a warranty, for $35,500 in 2008.

“That price was a bit more than half of what the car cost new, and 308s had been available in that price range for close to 20 years,” he said. “For a kid from West Philly who spent his youth pushing his nose against showroom windows, the notion of owning any Ferrari was a big deal.”

Mr. Mason sold the Ferrari about 10 years ago for $36,000, but today, that 308 might be pushing $100,000, or a third more than its original list price.

The idea of owning any Ferrari at half the new price or less is fading quickly. An early 2000s 360 Modena with a manual transmission is already about $25,000 more expensive than its original price, of about $150,000. That Ferrari’s depreciation trajectory has been nothing like that of its ancestor, the 308.

“So many people are willing to pay significantly more for cars than collectors had been in the past,” Mr. Mason said. “As much as I loved being a Ferrari owner, it just doesn’t hold that much appeal for me at the prices that the cars are bringing now. A lot of these cars are just being shoved into big collections and being hidden away. It seems like proof that enthusiasts like me aren’t buying these cars anymore.”

Neil Gellman, a St. Louis-based real estate agent, had wanted a Porsche 911 Turbo for most of his life.

About eight years ago, he realized that 911 Turbos from the early 2000s had become conspicuously, and almost unbelievably, cheap. He bought a 2001 model with 39,000 miles on it for $36,000.

“The car cost well over $100,000 new,” Mr. Gellman said. “I couldn’t believe that for under $40,000, I could buy a barely-used 911 Turbo, for what was essentially the price of a new Camry.”

Today, that car’s value is already approaching its original sale price. In hindsight, Mr. Gellman realizes that he bought his car at the bottom of the depreciation curve. “I never expected the car to go up in value that much, that quickly. I might have held on to it,” he said.

Typically, Mr. Wiley of Hagerty noted, cars like used Porsche 911 Turbos would hit bottom and then stay there for a while.

“Up until around 2011, a 911 Turbo from the 1980s could still be bought for less than half of its original price,” he said.

Now, new 911 Turbos are selling for over their original price, and not a single existing model seems to be depreciating. Some 911s of certain vintages, are, in fact, appreciating quite rapidly, particularly those with manual transmissions, Mr. Wiley said.

“It’s difficult to come up with a precise explanation,” he said. “The cars have certainly gotten more expensive, and people may be using and valuing them differently, putting fewer miles on them, and perhaps there is also the realization that we are nearing the end of the pure internal combustion era of the automobile, and that these cars will be regarded as quite special in the future.”

Lamborghinis are also rising in value. The Gallardo was the company’s best-selling car, with over 14,000 sold from 2008 to 2018. It was a huge number for a boutique manufacturer, which had crafted approximately 30,000 cars in total before the Gallardo came out. Around 2019, the earliest vintage Gallardos had hit bottom in the $80,000 range, about half their original cost. Today, those cars are priced over $100,000, with rare manual transmission Gallardos selling for over $200,000.

There is also the current supply-and-demand based reality.

Many of the new sports cars that are produced in smaller numbers are actually starting out at prices significantly higher than the actual selling price. Recently, Mr. Mason, the Pennsylvania-based pilot and former Ferrari owner, bought a new Porsche 718 Spyder.

“I might have been the last ordinary person to buy one at the list price, and I never would have paid a premium, but from what I understand, people are paying upward of $30,000 over M.S.R.P. to get one. While a buyer under those circumstances might not recoup that additional dealer markup down the road, I don’t expect my car to depreciate much, ever.”