No doubt many of you have seen the news of J.P. Morgan’s economic outlook for this year, predicting a modest growth of 0.7% compared with the lively and unexpected 2.3% growth in 2023. That, paired with headlines of recession and that general feeling of uneasiness that we get outside of the boom times, has undoubtedly led to a bit of a cooling in the performance car market.
The IMF’s latest outlook – which is pretty much in step with J.P. Morgan’s – paired with interest rates that still remain high and looking likely to stay that way for some time have certainly dampened people’s willingness to spend on luxuries. That’s luxuries like a 911 GT3 RS, for example, that many would have been willing to pay an enormous premium for last year. But now, these cars can sit for weeks unsold, as the price finds its way back down to one that the market accepts.
There are levels to this market, though, and while I’m seeing cars struggling to sell, I’m also seeing areas where the appetite for acquiring cars hasn’t abated one bit. Last month alone we saw almost eight figures of sales, all for cars at the very top end of the market.
For these cars, many of which look more and more likely to represent the last of their kind – as combustion-engined, driver-focused hypercars – there are buyers out there that have the available funds to capitalize on the long-term investment that they represent. At a level of the market where interest rates aren’t such a concern, and finances are stable enough to weather any incoming recession, the appetite is as strong as ever.
Ultimately, there’s a lesson in there somewhere for others in the market. As Warren Buffett once said: “be greedy when others are fearful.” There are a slew of desirable performance cars out there right now that are being offered with double digit percentage discounts compared to this time last year; if you’re in a position to adopt a little more of the approach of those who are spending with long-term investment as the goal, and keep a robust analytical approach as to why the car in question merits purchase as an investment, then you’ll likely be placing yourself in a very good position for the inevitable market rebound.
Yes, be cautious, but markets are cyclical and the collector car market is no different. The fervor at the top-end reveals that interest for these cars remains high, but it’s simply the means to buy them which is subtly waning. As those means return and confidence begins to build, that slight risk you took on a collectible car will very quickly begin to pay off.