BREAKING THE RULE: Not all vehicles depreciate when they leave the lot

Written by Chris Griggs

 

 

2012 Lexus LFA Nürburgring Edition

No depreciation here! This 2012 Lexus LFA Nürburgring Edition (Lot #724) had an original MSRP of $445,000, but sold at the 2018 Palm Beach Auction for $770,000.

 

It’s the first piece of car buying advice everyone receives: The moment you drive a new car off the lot, it starts depreciating. For the next 7-10 years, your car is going to keep dropping in value; it’s just a simple fact that’s as certain as death and taxes. But what if it wasn’t? After all, every rule has an exception, and there are a select few cars that prove that. In fact, not only do they not lose value, they actually gain value from the start. But these aren’t your everyday commuter cars – they’re some of the most exclusive, rare, high-performance machines ever made.

2018 Dodge Demon

This 2018 Dodge Demon (Lot #728) brought in $151,800 at the 2018 Palm Beach Auction.

When it debuted in 2003, the Ferrari Enzo had an MSRP of just over $650,000. Like all exclusive Ferraris, production was extremely limited and buyers were hand-selected by the company. By the time the first one made it to market and sold publicly, it was already a million-dollar car, and today they can fetch over $3 million for the right car. Ferrari isn’t alone in this phenomena. Their German rival Porsche saw a similar occurrence with the 918 Spyder in 2014. The cars had a starting MSRP of $845,000 with a planned run of 918 units, which again added to the exclusivity of the model. Two years later, the first public sale of one took place at the 2016 Barrett-Jackson Scottsdale Auction, commanding a selling price of $1.76 million. In the two consecutive years following, two more 918 Spyders crossed the Barrett-Jackson block, selling well into the seven figures.

This phenomenon isn’t reserved for just six-figure European supercars; Detroit has shown it has what it takes to build a sufficiently exclusive car. Ford reintroduced the Shelby GT350 in 2015, with an MSRP of just under $50,000 for the standard version and $63,495 for the hardcore, track-oriented R model. This past January, examples of both versions crossed the Barrett-Jackson auction block, with a pair of standard models selling for $71,500 and $70,400, and an R model selling for $86,900. Dodge got in on the game as well, with a 2018 Demon on offer at the 2018 Scottsdale Auction. After the bidding was all said and done, the car rolled off the block, selling for a whopping $159,500. Pricing on the Demon at a dealer starts out just over $83,295, with fully loaded ones stickering for just under $100,000.

Shelby GT350R

The Shelby GT350 R-model had a sticker price of $63,495 when it was reintroduced in 2015. This 2017 example (Lot #747) sold in Palm Beach for $73,700.

What is it about these cars that allows them to be the exception to the general rule? It’s a variety of factors, all combining together. First, these cars are limited production and announced by the manufacturer as such. This sets the stage for the second factor: Only a certain amount of buyers will actually have an opportunity to purchase them, leaving many collectors with an empty spot in the garage they yearn to fill it when a secondhand model becomes available for sale. But limited special editions alone aren’t enough to create the instant value appreciation. This is where the third factor comes in: performance. All the examples above are the top performance car offered by the manufacturer, leaps and bounds above anything else before it. The result is a car that not only outperforms the competition, but forces them to change to keep up. The Ferrari Enzo was an engineering masterpiece when it came out, offering performance previously unheard of and setting the stage for a new era of supercars. The Porsche 918 took it to the next level, blending technology and design to create the new standard of performance and the era of the hypercar. The Shelby GT350R showed Detroit could build a muscle car capable of world-class performance on a road course with turns, not just a straight line. Dodge built the Demon to show that muscle cars still own the straight lines, dominating the drag strip with the fastest quarter-mile time of any production car.

Beyond being fast, these cars are significant. They ushered in a new era or raised the bar for everything else. Throw in the exclusivity with only so many being built and it’s a recipe for instant demand – and proving the exception to the rule.

To view the results of our 2018 Palm Beach Auction, register or login at Barrett-Jackson.com.

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