It is sometimes said that the only thing more expensive that a new supercar is a used one. Over the years, luxury and high-performance cars have ended up with a less than stellar reputation when it comes to reliability.
And yet there is still a thriving second-hand market for heavily depreciated cars like these. I recently spent some time with a perfect example of such a car – a 2008 Rolls-Royce Phantom. With that car in mind, I thought I’d take a few moments to examine what causes a car that originally cost almost $400,000 to trade for less than a third of that.
The Time Factor
Obviously, age is a factor here – cars in general are improved with each new model year, so obviously older cars are going to be less desirable until they become collector cars. But a car like a Rolls-Royce is always worth collecting, and frankly despite its age the Phantom is and was the best way of getting from one place to another, even if it does lack some of the tech we’ve become accustomed to.
However, with cars at this price point new models and facelifts hit values much harder. The simple fact is that when you’re selling a car that costs as much as a Rolls (or a Ferrari, Lamborghini, Aston, Bentley, etc.), you’re dealing with people that can afford to always have the newest version and are almost always have to have it. Therefore, every time a facelift or new model is released, there will be a flood of cars hitting the market as they’re traded in on the new model.
Another major hit that cars like these take comes on the front-end with the deals that are offered. The Rolls wasn’t hit as bad by this, but it’s a killer for Aston, Bentley, and McLaren. Long story short, there is a period after a release of a new model from any of the super-luxury and exotic brands when that new model is the hottest thing to have and demand is going crazy.
That hype never really lasts, though, and sales slow down quickly once the hype dies off. If the manufacturer and dealers aren’t ready for that, they can (and do) end up with inventory they start cutting big deals on in order to sell. Once that happens, all the pre-owned examples take a huge hit because when a new example can be purchased for $30,000 under sticker, those pre-owned cars have to be even cheaper to attract buyers.
Reliability is Key
Finally, there’s reliability and running/maintenance costs. We’ve all heard horror stories about how unreliable these sorts of cars can be, and that certainly affects the value. However, the stories are very often just stories. Yes, older exotics are tricky to deal with, but modern exotics are almost all owned by a parent company that’s whipped them into shape.
The Rolls, for example, was designed and built entirely under BMW’s ownership and there are multiple engine parts that are shared with BMWs as well as components like the media interface, which is a re-suited version of iDrive. These may sound less than ideal, but shared parts do make for less expensive repair bills.
Despite that, though, there are still going to be fat bills because at the end of the day these cars sold for hundreds of thousands of dollars new and were designed to be maintained by people that can afford to spend that much on their cars. Regular maintenance and proper techniques and parts can make these cars much more reliable, but the simple reality is those aren’t cheap and drive away buyers that hear the stories.
Depreciation gets more people behind the wheel
None of these things are all that bad, though, for many of us. Without the heavy depreciation cars like that Phantom and the supercars we had on our walls (or as our wallpapers) growing up eventually become attainable to the average person that’s willing to really put in the work, instead of being reserved for the select few.
Sure they’re not the new model, yes sales slowed down over the years, and sure they’re not cheap to maintain – but they’re our dream cars and because of depreciation they’re finally within our reach.