Meet The Like-New McLaren F1 That's Been Kept In Its Box For Twenty Years

Discussion in 'Cars in General' started by GTPNewsWire, Oct 18, 2017.

  1. SPhilli911

    SPhilli911

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    I may not like the idea of investing in cars right here and now in this thread on a videogame forum while daydreaming about being rich at my work desk this fine afternoon, but put me in the position to buy cars as investments then maybe I'd change my tune. It's not that I refuse to consider investing in cars, I don't exactly have disposable income to really have put more thought into it, is all.
     
  2. McLaren

    McLaren Premium

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    Cars are just bad investments, as the age old saying goes. Most supercars alone don't appreciate in value and it takes something truly special (or a special edition Ferrari) to have any sudden appreciation of value in a short amount of time following production, like the Ford GT or Carrera GT. Run of the mill exotics just bottom out and then make a slow gradual climb that never gets back to MSRP levels. Otherwise, all one can do is buy something like an Aventador & hope in 20 years, you can make most of your money back. Cars like the Huracan won't.

    Then, you have manufacturers like Ferrari & Porsche that are fighting flippers who try to capitalize on the limited production early on in a car's life cycle who get a car and then ask $50-175K over sticker price for it 1-6 months later (Porsche dealers are actually being scrutinized lately for having a similar tactic with GT3/GT2 RS allocations). Otherwise, it'd be nice to buy a GT3 for $180,000 and then flip it for $220,000 like some examples did just months into the first deliveries.

    Of course, @SPhilli911's last sentence defines it all; even if one wanted to, most car guys don't have the income to take such a risk and those that do aren't going to care if their investment pays off as they have other means.
     
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  3. TheCracker

    TheCracker Premium

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    Buying new cars is largely a bad investment. Being able to spot what will become sort after once it's 20 or so years old and buying when at the bottom of its depreciation curve is a skill that will reap rewards. No doubt that money could be invested in more traditional ways and bring you better financial rewards over that term of investment, but you'd get zero enjoyment from it over that period.
     
  4. Danoff

    Danoff Premium

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    @TheCracker said what I was going to say. It's tough to pick a new car that will give you a return, but for a used car it's not just possible, it's not actually that difficult. Sure, it's not going to give you crazy 20% return like the stock market has this year (unless you're lucky), but it's practically a guarantee that they will go up. Especially for cars that are already on an upward trend. Only over-speculation would result in the price correcting. Hagerty has created a "blue chip" index of sorts for cars and tracks the trend of those car values over time:

    https://www.hagerty.com/apps/valuationtools/market-trends/collector-indexes/Blue_Chip

    They have other indexes too:

    https://www.hagerty.com/apps/valuationtools/market-trends/collector-indexes/Affordable_Classics

    Practically every car that is in good condition eventually rises from a floor in its value. It may take longer than your life, but it happens. Even for something that was insanely mass produced like a Volkwagen Beetle. There are segments of the market that stay flat for loooong periods of time:

    https://www.hagerty.com/apps/valuationtools/market-trends/collector-indexes/1950s_American

    and market corrections

    https://www.hagerty.com/apps/valuationtools/market-trends/collector-indexes/Muscle_Cars

    These are long term investments. But let me ask you, Porsche 996 911, you can buy those under $30k right now. Will you be able to in 10 years? No way. Right now you can pick one of those up, you can get parts, you can restore it to excellent condition, and then when it's not so easy to restore because parts are hard to come by, it's a rare and desirable thing. This is a fairly predictable market. You have a decent feel already for what it will do. It won't offer the return of the stock market, and there are upkeep costs to consider, and you have to find a place to store it. It's not for everyone, but I've never had as much fun with a mutual fund as I have with my NSX.

    The other thing I like about collectible cars is that they're non-correlated assets (meaning, non-correlated with the stock market). They have worldwide appeal, and you cannot get more of them. The same cannot be said of gold. Gold is mined constantly. With cars, rarity increases over the years. There's also insurance against theft or accident. If absolutely nothing else, it's an inflation hedge.

    Bottom line, given a 30 year window you can pretty much throw a dart and pick any random 20 year old car that is in good condition and it will be worth that or more 30 years later. 50 year old cars that are in good condition are not super common. This should not be surprising. You can do the same with houses and index funds. With index funds you'll almost certainly get a better return than either real estate or cars. But you can't really use an index fund.

    The main thing that concerns me about car collecting is when people talk about banning them from the roads altogether in favor of self-driving cars. That would be an unprecedented step in US motoring (you can drive pretty much anything that was legal when it was produced), but it's not impossible. If it happened, and manually driven cars are relegated to private tracks, I have a hard time believing the values of many of them would survive.
     
    Last edited: Oct 20, 2017
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  5. McLaren

    McLaren Premium

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    My post was more directed towards new cars, esp considering the topic car was bought new as an investment. Used is much easier of course, mainly because the first owner already took the hit on it. But you’re right regardless.

    I’ll try to respond to @Danoff s post this evening when I’m not on a phone.
     
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  6. Danoff

    Danoff Premium

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    I've been working on this one some more - trying to figure out how the car is worth more without ever having been driven despite all of the hoses and belts and whatnot being changed.

    If you look at it purely from a financial standpoint, there is a question as to whether you maintain it in working order or you let it stay original. I have no idea which one is best for this particular car, but I know that other cars are considered more valuable as time capsule car with the original everything (including a 50 year old battery). But supposing the buyers for this car are a little different, and don't care about having new hoses, batteries, belts, and other rubber bits, I could see someone deciding the other way - that being kept up in working order would be essential. Either way, it was a call that had to be made decades ago, and the owner made their call and would have to live with it.

    Driving it would help articulate the suspension and other bits that no doubt need articulation, which otherwise wouldn't get lubricated by just starting it. But here again you have a decision to make (especially purely from a financial perspective). If you drive it on an exclusive track day somewhere, you run a non-zero risk of wrecking it (which is fine as long as it's totaled, which gets to be difficult at stratospheric prices, maybe not so fine if it isn't), but you also run a non-zero chance of hitting a bug, running into a tumble weed, hitting a squirrel or bird, or even just exposing the car to high winds. So that has to be weighed against the cost of replacing all of the suspension bushings (which maybe you're doing anyway to keep it running) and doing who knows how much more maintenance to the car to make sure that it's in prime condition whenever it does get driven.

    I don't think there is a price difference for this car between 150 miles and 1500 miles on the odometer. I'm also not convinced that there's a price jump for having the factory interior covers on it. But it's possible that there were other financial considerations of just minimizing the possibility of paint damage or other dings that can occur when the car is on the track. So it's possible that it was not driven for that reason.

    Honestly I'm still scratching my head about this a bit.
     
    Last edited: Oct 23, 2017
  7. homeforsummer

    homeforsummer Premium

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    As someone I know put it...

     
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  8. Joey D

    Joey D Premium

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    In the off-road circles, we basically say not wheelin your rig to keep its resale value is like not touching your girlfriend so she's nicer for the next guy.
     
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  9. McLaren

    McLaren Premium

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  10. Joey D

    Joey D Premium

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    Thanks for sharing @McLaren, if you happen to find out the actual price too please let us know. Seems like I was off the mark by nearly $10,000,000 if it did sell for that much.
     
  11. McLaren

    McLaren Premium

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    Will do; at that price, it would be around $25-$27 million which was the initial price set by the owner, so I was off as well.

    One of the concerns I had about the car needing to head back to Woking were also addressed by an insider. Car was fully serviced before sale.
     
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