And so it begins, car value crash... | Page 3 | FerrariChat

And so it begins, car value crash...

Discussion in 'Ferrari Discussion (not model specific)' started by 09Scuderia, Apr 13, 2020.

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  1. IloveGT

    IloveGT Formula 3
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    Oct 17, 2015
    2,419
    I completely agree. CPA and Lawyers can work at home, if telemedicine can.
     
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  2. technom3

    technom3 F1 World Champ
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    Mar 29, 2007
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    Justin
    In all fairness a new Tahoe starts at 53k....

    Cars are just friggin expensive. But that's also because they have eleven billion airbags. Radar cruise. Radar in tail lights. Auto braking. Traction control heated seats. Enough careful engineerered steel or aluminum to crash at 80 mph into a mountain and not be injured. As well as apple car play and really nice leather furniture. Cars are friggin complicated
     
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  3. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    14,244
    True, but easier financing also helped to push the price up (just like with homes and college tuition). If they can get a payment that works with the person's income, including leasing to make it easier, that will drive the price up. Those of us that prefer to buy cash get screwed with that type of inflation. 84 month loans at low rates do that...
     
  4. Shark01

    Shark01 F1 Veteran

    Jun 25, 2005
    5,684
    So another data point.....

    Picked up my FGT from the mechanic yesterday, we are talking about current stuff, will I get laid off etc.....and he mentions he does alot of overflow work for some luxury dealers in town and was talking to a GM about sales and the guy tells him sales are brisk for cars over $100k (people that have real money) and non-existent under that......the leasing pretenders (the thousand-aire class) are missing from this market.
     
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  5. JP365

    JP365 Formula 3

    Mar 8, 2007
    1,340
    Chicago
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    John F
    There’s a good Malcolm Gladwell podcast about college costs and the role of dorms and food. As colleges got more competitive to attract the top students, they started to pump more money into making the college experience more glamorous. As a result the amount of grant money to offset tuition went down which contributed to the rise in tuition.
     
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  6. The Red Baron

    The Red Baron Formula 3

    Jan 3, 2005
    1,110
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    Warren
    Ah, the 64k dollar question, although that doesn't sounds like much nowdays.
    There are many factors that influence the car market, not just one or two. Also applies to other investment portfolios.
    For example the interest rates are now around the lowest ever, and it seems unlikely they will go upward for some time.
    This will encourage borrowing funds. Depending on what vehicle your buying and the deposit your putting down there will always be someone to finance the deal.
    For example I see that a few FChaters would love to buy a 250GTO. Well should one come one the market at say 25 million, cant go to low, and he wished to finance 50% of that
    out of his own pocket, the lender would be up for 12.5 million. Thats not bad on a car that two months ago was valued at 40 plus.
    Probably in some peoples eyes worth the risk.
    Another scenario would be if a vaccine for Carona Virus became available within months (an possible) the outlook for investment would change overnight.
    I believe a lot there would be a totally different outlook in that people turn to enjoy the immediate future more.
    If that means buy a 330GTC or whatever, now is the time to enjoy it.
    Of course I could be totally wrong, the car market crashes and everybody looses thousands.
    One thing is for sure and that is the future will not be the same as today.
    It is just getting it right when that change takes place.
     
    ross likes this.
  7. Invidious

    Invidious Rookie

    Apr 18, 2020
    10
    Full Name:
    B-rad
    The only way you’ll lose thousands on a car is if you sell it. Just like the stock market, you can’t lose if you don’t cash out.


    Just another dude who loves cars
     
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  8. The Red Baron

    The Red Baron Formula 3

    Jan 3, 2005
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    Warren
    Possibly, it depends if you own the car or the bank.
     
  9. mcimino

    mcimino Formula 3

    Oct 5, 2007
    2,262
    Long Island, NY
    Collector car prices have been holding up fairly well on the BaT auctions. But...I don't think the stock market will be propped up as it is now within the next 6-9 months. If, and when it does crash, folks will let go of their prized possessions because they need cash, or they just want the cash to get back in the market at the low end.
     
  10. gilly6993

    gilly6993 Formula 3

    Aug 20, 2009
    2,475
    Longmeadow, MA
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    Eric
    I think more the latter for many with high priced toys....hindsight is 20/20 though.....I have had my 2016 RS for sale (only on Rennlist) for a few months.....little in the way of offers....got one for $144K about a week ago.....I really want $150 but in all honesty I should sell and put the money to work....I think it will be easier to make a few % points in gain than it is to sell my car for a few grand more.....I'm emotionally attached to the car though....as many are...
     
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  11. 19633500GT

    19633500GT F1 World Champ
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    Nov 9, 2010
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  12. steved033

    steved033 F1 Veteran
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    Apr 12, 2017
    7,672
    Atlanta, GA
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    Steve D.
    They didnt' add the 120 days deferred? I'm out.
     
  13. Texas Forever

    Texas Forever Seven Time F1 World Champ
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    Apr 28, 2003
    75,370
    Texas!
    I've been noticing BAT is still pretty strong, particularly on motorcycles. Then I got an email from them today. Their new users are way up. Makes sense with people staying home.


    BaT continues to see record site traffic and strong results this month. Here are some statistics on auction activity through the first two weeks of April (and % change from April, 2019):


    • Total # of bids: 16,265 (+35%)
    • Value of lots sold: $13,571,969 (+35%)
    • New users: 7,573 (+49% )
    • Average auction views: 14,552 (+4%)
    • Average auction watchers: 785 (+24%)
     
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  14. henryr

    henryr Two Time F1 World Champ
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    Nov 10, 2003
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    its amazing.

    did the march drop and recovery eliminate most of the shock?
     
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  15. Texas Forever

    Texas Forever Seven Time F1 World Champ
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    Maybe more people watching and bidding because they are stuck at home?
     
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  16. henryr

    henryr Two Time F1 World Champ
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    that definitely plays a part. i've been known to buy some stuff out of boredom
     
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  17. BaronM69

    BaronM69 Formula Junior
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    Aug 29, 2005
    975
    Washington DC / FR
    Yes telework allowed most to maintain business, and far better that we could have feared.

    Nevertheless, it's far from optimal performance.
    The vast majority of employers I know, have been able to witness significant loss of productivity from people working from home. But only slight disorganization.

    Let's remember human nature is human nature.
    Most people are not self driven, most people business ethics is maintained only thanks to "passive or active monitoring" (which is harder to do when at home), most do not have a house large enough to have a room dedicated to work, youngster out of school still live with room mates to pay their university debt, .....

    The average squared footage per employee is 200, and average big city rent is $50 per employee.
    So if saving 10k per employee (most employees who work in an actual downtown office, making on average above 50k), and the loss productivity being higher than 20% on most of employees, you don't make money.

    And this is BEFORE talking about a team's loss of efficiency, out of not having the person you need right next to you.
    It is far harder to create loyalty when you never or rarely see your employers, your coworkers.
    Harder to motivate your team as a group, as distance is an actual thing.

    And it is also limiting your social interactions, which will increase people isolation.
     
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  18. technom3

    technom3 F1 World Champ
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    Ehhh... Yes and no. It's not all on the ability to finance.

    I think you are equating that long term pricing has increased price.

    When in reality long term financing grew out of a need because cars became so expensive.

    If it were 84 month financing the car companies would have record profit... And I mean REALLY record profit. Instead they are struggling and moving along like always.

    Plus the banks know 84 month is risky. Cars have either a 3-4 year warranty and people can barely afford the payment so once that's out of warranty and trans let's go... Usually the payment goes too.

    It's risky for the lender which is often an arm of the manufacturer. The loan gets paid off slower and people are upside down for longer.
     
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  19. technom3

    technom3 F1 World Champ
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    My stupid purchase arrives tomorrow. Lol
     
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  20. JP Manor

    JP Manor Karting

    Mar 7, 2018
    94
    Agoura Hills / Malibu
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    JP Manor
    Here's the other thing that's going to happen besides more working remotely, a LOT of people are not going to be hired back and this will have a huge impact on the economy.

    Many business owners (including myself) are using this time to analyze how efficiently their business is run.. Companies are going to be trimming the fat big time.
     
  21. rampante550

    rampante550 Formula Junior

    Jul 20, 2010
    553
    NC
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    D Day
    I think the many who will move to NC, ATL, and FL will need cars when that existing migration increases 5-fold. NYC was a great city, but everybody knows somebody (or many) who've made the move and wish they had done it sooner - even if they still talk trash about the places they move to (and that's pre-pandemic).
     
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  22. chris0315

    chris0315 Karting

    Jul 11, 2014
    167
    Richmond, VA + Düsseldorf, Germany
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    Christoph
    I'm waiting for years now to see air cooled Porsches dropping but it is not (or very very slowly) happen.
    Same on a house in HB, not really dropping to a point where it makes sense to move forward.
    Let's wait and see. From a logical standpoint things SHOULD drop soon but for some reasons I believe it will not happen in a way it should. Watches are down already or let's say downer. All I need is a Scud, a 964 speedster and than things can go back to normal
     
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  23. 19633500GT

    19633500GT F1 World Champ
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    Unless cash is needed, the cars you mention are secondary tiered items vs a daily driver for many, so likely to be held unless the owner is in dire need of cash.

    The shear absurdity of pricing alluded to by @technom3 is really the driving factor behind this all. Tahoe's STARTING at $53K. That's almost 1/4 of the median home sale value in the US. That in itself is just insane to me. Average used interest rates were pushing 8%+. Super prime loans only comprising 20% of the market. Average new car payments at $550, low down payments, average loan length was 69.4 months (and now will push higher). All of these factors compound the "if I lose my job, how will I make next month's payment" mindset us Americans tend to have. It wasn't and isn't sustainable, it was just socially acceptable then "because everyone is doing it!" Pure idiocracy.
     
  24. The Red Baron

    The Red Baron Formula 3

    Jan 3, 2005
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    Warren
    Well there you go, fuel price to -$37, or equivalently $0. That's for the futures in the US.
    So if gas drops lets all go out and buy petrol driven cars.

    Unfortunately although the above is correct it wont translate into reality at the pump.
     
  25. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    14,244
    Huh? That was for a contract expiring tomorrow for delivery. The person selling it for "negative" dollars couldn't accept delivery and had to pay someone to take delivery which is cheaper than the penalties they would otherwise get. June contracts are over $20, which is where it will be in a few days after these contracts near delivery expire.

    Edit: And only for WTI. Brent doesn't have supply and demand issues at the moment so their price is relatively normal by comparison.
     

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