Recession is coming – although we now know it’ll be a shorter and shallower recession than originally feared. The Bank of England announced last week that the economic downturn is expected to last just one year rather than two, although we’ll be waiting until 2026 for the UK economy to recover to pre-pandemic levels.
Quite what this means for car values is anybody’s guess, but it does appear as though the top end of the market is sailing these moderately stormy seas completely unaffected. Consider the one-off Bugatti Chiron Profilée that was sold last week for a world record sum of £10.4m (after taxes) – the highest sale price ever achieved for a brand new car at auction. Meanwhile, Bonhams posted strong results at its Paris sale last week, including €2.185m for a 1988 Ferrari F40, €1.035m for a 1993 Porsche 911 (964) Turbo S Leichtbau and €1.495m for the ex-Michael Schumacher Jordan 191 we wrote about recently.
Elsewhere, Lamborghini and Rolls-Royce both achieved record sales in 2022, thanks in large part to continued demand for their SUVs, the Urus and Cullinan respectively. Our car finance partner, JBR Capital, has seen very strong demand for those marques too – it helped finance 46 per cent more Lamborghini purchases in 2022 than in 2021, while the average loan size on Rolls-Royces rose from £175,000 in 2021 to £210,000 last year.
It’s not at all unusual for the very wealthy to carry on unaffected while the rest of us feel the pinch, but fluctuations at the top end of the market can be a useful bellwether for other sectors. And there are encouraging signs at the more affordable end of the spectrum – I sold my Alpine A110 six months ago for £39,000, and the cheapest example I can find for sale today is listed for £42,890 (it has half the miles and a higher spec than my old car, so I’m not weeping into keyboard just yet…).
I replaced the Alpine with a 2017 VW Golf GTI Performance, and as far as I can tell, values of those have hardly budged since September. Very tidy, low-mileage cars were advertised for around £20,000 back then and they still are today. And if you’re tempted by one of those, just do it – they’re fantastic machines.
Speaking on The Intercooler podcast this week, JBR Capital founder Darren Selig said: ‘I got out of bed on January 1st thinking it’s all over, it’s going to fall off a cliff. But we’ve seen record levels of applications continuing into January and there doesn’t seem to be any sign of it falling off that cliff just yet.’
So it seems the great correction that many thought was coming in 2023 might not arrive at all – at least not just yet. Good news for those of us who worried our cars might shed half their value this year; less so for anyone who hoped to nick a bargain in time for summer.
Before you buy your next sports car, supercar, classic car, luxury car, even a brand new car, go and see what JBR Capital can do for you on the finance side – and tell them The Intercooler sent you.
jbrcapital.com
