D is for Depreciation
For many buyers, depreciation is a crucial consideration when deciding on the purchase of a vehicle. It’s literally money falling out of your pockets and there’s no way to recover it. It bothers people, and rightfully so, because a car is typically one of the most expensive purchases we’ll ever make in a lifetime apart from a house.
Credit: Alamy Stock Photo
According to iSeeCars, an average car loses about 50% of its value over 5 years and this was prior to the COVID-19 pandemic. As of 2023, the depreciation rate has fallen to 38.8%, which is still pretty terrible. One of the worst segments of cars for depreciation is electric vehicles, losing approximately half of their value. Ouch.
Supercars aren’t any different.
Hagerty has also studied the depreciation of modern supercars and highlights that all high-performance cars lose value over time, typically about 20% after three years. Ferrari models, such as the 488 Pista, tend to depreciate less than competitors like the Porsche 911 GT2 RS, which can lose up to 30% of their value.
Factors influencing depreciation include market demand, hype at launch, and regional differences, with Italian brands generally faring better than German and British marques. They also noted that specifications such as power, technology, or “specialness”, as they put it, can’t save a performance car from the abyss of depreciation.
Combating Depreciation on Supercars
Despite this inevitable downward trend in value for your beloved ride, there are some ways to help preserve the value of your vehicle. It might not be much, but it’s something.
- Buy Pre-Owned: Purchase a well-maintained pre-owned supercar to avoid the initial steep depreciation. As a buyer, you can also use this to your advantage. Used car prices can vary by state and if you find a great deal, you can also leverage a transport company that can arrange car shipping, making it a relatively easy process.
- Maintain Meticulously: Follow the manufacturer’s maintenance schedule and keep detailed service records to preserve value.
- Limit Mileage: Use the supercar for special occasions to keep mileage low.
- Proper Storage: Store in a climate-controlled garage and use a car cover to prevent wear and tear.
- Keep Original Condition: Avoid modifications; if necessary, ensure they are reversible and keep original parts.
- Choose Models with Better Resale Value: Research models with historically lower depreciation rates.
- Opt for Limited Editions: Limited and special edition models can hold their value better due to rarity.
Beyond that, it’s just important to drive the damn thing. Balancing use with enjoyment can make ownership satisfying while maintaining value.
If you wanted to preserve money, you wouldn’t have bought an engine on four wheels.
Maserati GranTurismo
Credit: Top Gear
- Initial Price: $159,995
- 5-Year Depreciation Rate: Approx. 67%
The Maserati GranTurismo, despite its elegance and performance, has developed a poor reputation for high depreciation costs.
They’re not well-known for reliability and to add salt to injury, owning a Maserati will also eat your wallet alive with expensive service and repairs. This high cost of ownership is one of the top reasons why Maseratis depreciates at such rapid rates.
Lastly, it’s estimated that there are only a handful of Maserati dealerships in the United States, about 115 of them. Comparatively, there are nearly 3000 Ford dealerships in the US so when you find the right shop to do the work, you can be sure that you’ll be reaching deeper into your pockets for parts and labor.
Jaguar F-Type SVR
Credit: CarBuzz
- Initial Price: $123,600
- 5-Year Depreciation Rate: Approx. 66%
Just like Maserati, the Jaguar brand is stunning in terms of performance but has very poor reliability ratings. Most Jaguar enthusiasts buy this model because they have an appreciation for the elegance and style that an F-Type brings to the table. Putting out 575 horsepower and doing 0-60 in 3.5 seconds with a top speed of 200 mph, the F-Type SVR is no slouch.
However, it is overshadowed by poor reliability which in turn means expensive maintenance and repair frequency, contributing to a significant drop in its value even after the first year.
McLaren 570S
Credit: Piston Heads
- Initial Price: $192,500
- 5-Year Depreciation Rate: Approx. 65%
The McLaren 570S is a high-performance machine with one of the highest depreciation rates among supercars. Why? It’s gorgeous, blazingly fast, and highly desirable.
Well, HotCars wrote a piece on the 570S and there is a general consensus that McLarens are not the most sturdily built cars and that over-manufacturing of this model has largely severely impacted residual values.
Tesla Model S
- Initial Price: Starting at $74,630
- 5-Year Depreciation Rate: Approx. 63%
As we previously mentioned, the EV space has been horrendous for vehicles in holding their value. Salient reasons for this include rapid advancements in technology and the release of newer models. The Model S first debuted in 2012 battery tech is way beyond where it was 12 years ago. Battery degradation is a huge concern as replacements can cost a significant amount.
Additionally, used Teslas don’t get the benefit of government subsidies which in turn reduces their appeal.
There was a lot of hype about EVs but even manufacturers have begun to scale back EV production and circle back to exploring hybrid models.
BMW i8
- Initial Price: Starting at $148,495
- 5-Year Depreciation Rate: Approx. 63%
The BMW i8 had a production run that began in 2014 and ended in June of 2020. Still, you can see used models come up for sale here and there.
It featured a 1.5L 3-cylinder turbo engine that could put out 349 hp and 406 lb-ft of torque with its electric motor. With a 0-60 speed of 4.4 seconds, it was an exciting plug-in sports hybrid that saw a total of 20,465 cars produced.
Its futuristic design and hybrid technology made it a desirable car but it still suffered from a high depreciation rate due to its niche market appeal, high initial price, and competition from fully electric and conventional supercars. However, its unique driving experience and design still attract a dedicated fanbase.
With an initial price of close to $150,000, there was a bevy of other high performers like the Audi R8 and Porsche 911 that have made a name for themselves over the years, much to the chagrin of a still-unproven model at the time.
