Specialty Vehicles command higher price points than normal cars from the dealership and limited production cars are like baseball cards to many wealthy enthusiasts. But no one could have foreseen the dramatic inflation of the price of rare exotics. If you bought a 1962 Ferrari 250 GTO in 1962 it would run you $18,000 ($153,303 adjusting for inflation). Today the Ferrari 250 GTO holds the record for the most expensive production car ever sold. So why have these old racecars shot up in value, how expensive are modern road-going racecars?
As you can probably imagine, the price of specialty vehicles is rising because the demand is going up. Could this be a sign of economic health, or a shift in the values of the average car buyer? There has been a massive explosion of cars purchased for over $100,000. In the year 2000, there were less than 10,000 cars sold at that value, compared to 2019 where there have been an estimated 250,000 vehicles sold for $100,000. One thing that points to a healthy economy, is the number of loans for $200,000, which has also been rising dramatically. This basically represents the small business owners that have strung a few good years together, and are now looking to celebrate by buying their dream car. If you look at the number of million-dollar cars today vs. yesterday you start to really see the discrepancy. In the year 2003, there were somewhere between 500-1000 cars that were available at a million-dollar price point. Today there are around 30,000 examples of vehicles that total $1,000,000, and the production of this caliber of car isn't slowing down. It seems almost every month you see one of the major car manufacturers unveil a new hyper-car that easily obtains that sort of value to onlookers and customers.
You’re probably thinking “of course prices have gone up, haven’t you heard of inflation?” Sure, but inflation just can’t keep up. Today’s dollar is worth 138% more than the dollar of 1965 but the price of the Porsche 911 has risen 1430% since then. in 1965 a brand new unit would run you $6,370, adjusted for inflation, you’d be looking at $51,922.38. In 2019 if you were to walk into a Porsche dealership and pick one up, you’d be looking at a base price of $91,100. Even if you factor in inflation, that’s a 57% increase in price! In the US someone buys a specialty vehicle every day, so yes demand is going up, but there are other factors that play in here. The cars of yesterday were much rawer. They didn’t come standard with all the modern amenities that we expect to come from a modern car today, most of these features weren’t even thought of. Infotainment systems, straps for door handles to save weight, manual windows, locks, mirrors, transmission, seat adjustments, etc.. if you look deeper you start to see maybe why manufacturers have changed their pricing relative to the dollar.
How does this affect the average car buyer? Not a whole lot. As mentioned before, specialty vehicles are valued differently by the general public, not only because they are worth so much, but how the value fluctuates. I think the collector market is the biggest factor here, meaning that most of these prices are going up because there are people out there with almost unlimited resources, that will do, or pay anything to pick up a car they have a fixation on. If you take a look at the Toyota Camry however, its pricing has actually gone down relative to the dollar. Today it’ll cost you $24,765 at its base price, compared to its price in 1985 (adjusted for inflation) at $26,005. The theme is here that the value of the average vehicle adheres to the natural rules of inflation, so don’t expect your old Camry to command a high price point.
Even though statistically these high priced vehicles are becoming less and less rare, the excitement you get from their presence is still the same. These cars are rising in price for a reason, but even if you had the money, would it be worth it to you? If so which car(s) would you buy, and how do you expect these cars to appreciate in the future?