These Sports Cars Are Not Selling | 4 Strategies to Save Money

costs that are sitting for months and months on dealer Lots can come with large discounts that can save you a ton of money who doesn't like to upgrade their ride without emptying that wallet especially for high value Sports and supercars the benefit can ramp up quickly up to the point that it covers almost the first year of depreciation but which cars offer these kind of discounts let's first dive a little bit deeper into it the time that a car is listed for sale tell something about the scarcity level of that car if a seller has a lot of cars that aren't selling the seller will generally speaking reduce prices as the idea is that this helps to attract buyers if the seller discounts the cars enough the cars will start to sell this of course also works the other way around remember when the C8 Corvette launched it was one of the faster selling cars in the US unsurprisingly sellers added massive price premiums the scarcity level was high since demand was above Supply now we can identify these cars that aren't selling by looking at the carried over inventory that metric shows the percentage of cars that offer sale for 3 months or longer if we look at that metric for the cars for which I'm tracking the prices we can see that on average 30% of the cars during last year weren't sold within 3 months there are however big differences some models sold extremely quickly While others were close to impossible to sell a handful of models had a carried over inventory rate between 60 and 70% meaning that 60 to 70% of the car were not sold within 3 months naturally it is the area on the right hand side of the aage in which in theory you can get the best deals right after all if 70% of the inventory isn't sold within 3 months surely the seller is willing to give you a good deal well not always the situation is more nuanced than that it depends for example on the type of car you're looking at the type of dealer but also the time of the year if we split the average carried over inventory during lost here by brand we can see that there are big differences between the brands the sports cars of Mazda and Lexus sell relatively quickly at rates of 14 to 21% while acuas and Maseratis sell relatively slowly at rates of 45 to 50% moreover the black lines show the confidence interval of the displayed rates in other words the uncertainty the longer the black bar the more variation over time and between the various models now with we take a look at Ferrari we can see that the unsold rate is relatively high right but this of course doesn't mean that you can get the best deals on a Ferrari it's driven by other factors we can say for example with a high statistical confidence level that more expensive cars have a higher carried over inventory percentage this also follows from common sense right a Ferrari 488 generally speaking takes longer to sell than an MX5 moreover high-end dealers might have different financing arrangements for the stock or work with Consignments of course they're always exception to the rule gt3s for example tend to sell relatively quickly despite our high price dech we need to add something to this graph to help us interpret the relevance of the carried over inventory rate the discount rates on unsold cars in Orange you can see now the discount rate for the carried over inventory that is the percentage by which car values are reduced if they didn't sell within 3 months the values for this are displayed in percentages on the AIS on the right now looking at these values we can see that they tend to be higher for costs with a lower carried over inventory percentage this makes sense right but how on Earth do you use this information as a buyer to spot the best deals to start you can look at the cars that aren't selling quickly and get discounted a lot if they don't sell within 3 months meaning that the orange and blue bars are close to each other in the right hand side of the graph unsurprisingly we find Maserati and eston Martin over here these results are mainly built up by the mc20 and V Advantage Market if you follow my channel you know that prices have been plummeting in those segments vantages are down by 14.5% compared to last year and mc20 is by 25% so if you're shopping in these segments you should be able to get a hefty discount on the price if the seller doesn't budge just walk out these cars are selling slowly and as the data shows the price will most likely be reduced in the upcoming period another way to find deals is to look at the cars that are selling quickly and have a high discount percentage meaning that the gap between the blue and the orange bars is positive over here we find the Nissans which are made up by the 400z Mazda so the Miatas and Chevrolet meaning the Corvette c8s what's going on in these markets looking at the 400z market for the base model we can see that prices were above Amazon but have been trending down rapidly the premiums in this market were not sustainable currently the median price is $53,000 versus $709,000 in April of last year unsurprisingly when we look at the carried over inventory in the left hand side graph we can see that it almost doubled between July and April in other words the scarcity level decreased as displayed in the graph on the right hand side discounts for onso cost decreased slightly from 10% in July but are still very low a similar situation applies to the Chevrolet Market or in this case the Corvette C8 Market cars were selling way above MSRP and prices plummeted when Supply increased now when it comes to the Mazda Market represented by the Miatas we can see for example that especially the ND generation sells rapidly but also is discounted a lot if they are hanging around the NC and MB Generations tend to sell a bit slower so what can can you do with this information well for all of these markets with a low carried over inventory rate but a high discount percentage it can pay off to pay close attention to the specific car you're interested in if it has been sitting around for let's say 5 months you know that it is above the average and that there's a good chance that there's some wiggle room in the price so instead of waiting for the price to drop it could pay off to Simply talk to the seller now if we go back to the overview we can see that there's a clear out lier in the graph the Acuras or to be more precise the base nsx's type assets are excluded we can see that they are not selling but that sellers are also not decreasing the prices what's going on here it could mean that sellers are simply stubborn they rather sell for $2 than shift inventory this would mean that they need to be confident that they can actually sell it for a high price second it could mean that transaction prices are far below listing prices looking at the development over time for the two metrics we can see that sellers might have a reason to be confident carried over inventory rates decreased during last year meaning that car sold quicker and quicker while the discount rates changed from 3 to 5% overall the aura NSX based Market is then also holding up quite well you can check out my detailed market update if you want to know more now as a buyer you could wonder if this Divergence over here means that prices will Flatline soon and potentially exploit this in these cases it's then also key to understand how the trends are developing over time now all the cases that we discussed so far refer to markets in which prices are falling or in the case of the Acura potentially move towards stability the aim in these kind of situations is then also to get a price discount and compensates for your first year of depreciation the holy Grill is of course to get a good deal in a strong Market but alas this is also very difficult in these markets inventory moves rather quickly and unsold inventory gets hardly discounted if we zoom into the Porsche market and look at the breakdown by model we can see very clearly what the strong and weak markets are tyon are selling relatively slowly compared to other models but receive the highest discounts if they don't sell the 911 Market on the other hand is much stronger yes the cars are selling as slowly as the tyon but prices aren't reduced sellers have a high confidence in the market also the Cayman Market looks relatively strong they sell much quicker than 911s while price reductions are fairly similar if you want to buy in this market you need to exploit the seasonality you see in these strong markets list prices for new stock are not always lower during the winter yet cost that aren selling are discounted slightly more if we look at the discount rates for the 9 And1 and 9 and2 current us you can see that the unsold cars typically get reduced more during the winter last January this was 5% for the 991s and 4% for the 992s currently the rates are 4% and 3% respectively in both cases it represents a clear difference from the summer while the price trends didn't display a significant winter dip you can see this in the detailed market update video the rates during this winter though are less negative this is driven by by a generally stronger Market if we look at the development in the carried over inventory we can see that it decreased by almost 50% during 2023 again this is reflected in the strong prices let's summarize what we saw if a car is for sale for a long time it doesn't always mean that there's a good deal to be had it depends among others on the specific model the price point the price strength the dealer and the time of the year in a normal situation where Corp prices are decreasing there are few strategies you can use to get a stellar deal and compensate some of that depreciation in the upper segments we saw that discounts can be had in markets with a high carried over inventory rate combined with high price reductions on unsold inventory the Maserati and to a lesser extent Aston Martin markets are examples of this of course it's very unlikely that you would get a discount that no other customer would get yet you should be aware that paying full price in these type of markets is cost ly if the seller won't budge walking away could be a profitable strategy in this segment now when it comes to the markets with a low carried over inventory rate but High discount percentage it can pay off to pay close attention to the specific car you're interested in if it has been sitting around for a while you know that there's a good chance that there's some wiggle room in the price instead of waiting for the price to drop it could pay off to Simply talk to the seller we also looked at a strange situation in which cars aren selling but also not getting discounted you could get a good deal as the market is gaining strength but also end up overpaying doing market research to understand the price trend and drivers is key here now when it comes to the strong markets it's of course very difficult to find extraordinary deals prices themselves hardly display any winter dips but price changes for unsold inventory do you should then also look for cars that have been for sale longer than aage and are still for sale in the winter and with that we arrived at the end of this analysis now this is the first time that I devoted a full video to the inventory Dynamics so naturally there are still some points where the analysis can be improved please let me know your thoughts Down Below in the comment section someone suggested for example to look into the cars with the highest winter discounts and I think this would be a valuable addition to the next update as always thank you for watching and I hope to see you next week for a new video

Channel: Fourwheel Trader - Car depreciation analysis

Views: 29,473

Keywords: used car prices, best car discounts, used sprots car, cheap sports car, depreciation, porsche 911, porsche cayman, fourwheel trader

Id: daGTRLzpCLc

Length: 12min 2sec (722 seconds)

Published: Sun Feb 18 2024