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Discussion Starter #1
More focused on owners please... We are now 3 years into the model... as owners, is depreciation/ price reaction:

1- better than you expected
2- inline with your expectations
3 - worse than you expected

as an owner of a 2018 (January delivery), i am #3... market soft in general but didn’t think we would see ~240,000 price levels so quick. doesnt change my experience and plan on keeping car until new replacement comes out in 2023 but more curious on what owners are thinking....
 

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I'd have to say 3, paid about £250K in May '18 now 10K miles probably get £130K now, I had hoped it would be nearer £200K but they produced way too many for the UK market and there are not enough people around with £200K for a 720S
 

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I'd have to say 3, paid about £250K in May '18 now 10K miles probably get £130K now, I had hoped it would be nearer £200K but they produced way too many for the UK market and there are not enough people around with £200K for a 720S
well the pain for you is that there are really not many countries where you can sell a UK RHD, that make economic sense and also that the UK market in itself is not going strong with Brexit/Labour uncertainties ... its a pity :-(
 

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More focused on owners please... We are now 3 years into the model... as owners, is depreciation/ price reaction:

1- better than you expected
2- inline with your expectations
3 - worse than you expected

as an owner of a 2018 (January delivery), i am #3... market soft in general but didn’t think we would see ~240,000 price levels so quick. doesnt change my experience and plan on keeping car until new replacement comes out in 2023 but more curious on what owners are thinking....
I am a soon-to-be owner of a 720S Performance Coupe and have studied the market fairly extensively - both East and West Coasts. I have found depreciation (3) worse than expected and counter to dealer's initial comments that the 720S would fair better than its predecessor 650S. Based on my research, here is the projected depreciation (worst case scenario) based on MY18/MY19 negotiated cost for a well-optioned $360K MSRP Performance Coupe (figures ~$10K less for Luxury) assuming 2500 - 5000 miles/year:

Year 0 = 360K (YoY depreciation)
Year 1 = 275K (-23.6%)
Year 2 = 230K (-16.4%)
Year 3 = 200K (-13.0%)
Year 4 = 175K (-12.5%) Note: this is 49% residual. Less than current lease of 55%)
Year 5 = 155K (-11.4 %)
 

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I am a soon-to-be owner of a 720S Performance Coupe and have studied the market fairly extensively - both East and West Coasts. I have found depreciation (3) worse than expected and counter to dealer's initial comments that the 720S would fair better than its predecessor 650S. Based on my research, here is the projected depreciation (worst case scenario) based on MY18/MY19 negotiated cost for a well-optioned $360K MSRP Performance Coupe (figures ~$10K less for Luxury) assuming 2500 - 5000 miles/year:

Year 0 = 360K (YoY depreciation)
Year 1 = 275K (-23.6%)
Year 2 = 230K (-16.4%)
Year 3 = 200K (-13.0%)
Year 4 = 175K (-12.5%) Note: this is 49% residual. Less than current lease of 55%)
Year 5 = 155K (-11.4 %)
you don't take into account that you will not pay 360 but only 325-330 if not less at most dealers

Second thing is that the 720s will always be protected by MP4 and 650s prices ... I don't think in the future many will sell MP4s for 75k or less (more likely around 100-90k) and no one will sell a 650s for 110k more likely 125-140k ... the 720s WILL ALWAYS be more than a 650s so following that logic the total bottom line is around 155-160k and good spec cars won't drop much below 180-190k ever ...
 

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I am a soon-to-be owner of a 720S Performance Coupe and have studied the market fairly extensively - both East and West Coasts. I have found depreciation (3) worse than expected and counter to dealer's initial comments that the 720S would fair better than its predecessor 650S. Based on my research, here is the projected depreciation (worst case scenario) based on MY18/MY19 negotiated cost for a well-optioned $360K MSRP Performance Coupe (figures ~$10K less for Luxury) assuming 2500 - 5000 miles/year:

Year 0 = 360K (YoY depreciation)
Year 1 = 275K (-23.6%)
Year 2 = 230K (-16.4%)
Year 3 = 200K (-13.0%)
Year 4 = 175K (-12.5%) Note: this is 49% residual. Less than current lease of 55%)
Year 5 = 155K (-11.4 %)
Good information. Unfortunately, no one can avoid the realities of mathematics, and the law of supply and demand.

I suspect the first large step in depreciation is simply the result of a large percentage of buyers (at least after the really initial wave) are paying a steep discount off of MSRP new. Buyers in the secondary market would be well aware of this as well.

The real depreciation curve might be better reflected by assuming some blended average off of MSRP.

So perhaps it goes:

MSRP = $360k

Year 0 = -10%
Year 1= - 17%

etc.
 

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I'd have to say 3, paid about £250K in May '18 now 10K miles probably get £130K now, I had hoped it would be nearer £200K but they produced way too many for the UK market and there are not enough people around with £200K for a 720S
Probably more a Brexit/economic issue. UK has Brexit, EU has zero growth, parts are probably in a recession already. I'm not sure the production volume is what caused the depreciation. All exotics are doing pretty terrible in the UK, even Ferraris. On the bright side, with that amount of depreciation you can pretty much drive the car for the next 4-5 years with unlimited miles with no worry about depreciation/value.

UK RHD cuts both ways. On one hand RHD cars are more limited, but on the other hand most of the world doesn't want one.
 

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I am a soon-to-be owner of a 720S Performance Coupe and have studied the market fairly extensively - both East and West Coasts. I have found depreciation (3) worse than expected and counter to dealer's initial comments that the 720S would fair better than its predecessor 650S. Based on my research, here is the projected depreciation (worst case scenario) based on MY18/MY19 negotiated cost for a well-optioned $360K MSRP Performance Coupe (figures ~$10K less for Luxury) assuming 2500 - 5000 miles/year:

Year 0 = 360K (YoY depreciation)
Year 1 = 275K (-23.6%)
Year 2 = 230K (-16.4%)
Year 3 = 200K (-13.0%)
Year 4 = 175K (-12.5%) Note: this is 49% residual. Less than current lease of 55%)
Year 5 = 155K (-11.4 %)
This is misleading. I've followed prices as well since I hoped for P11 depreciation again, and from Sept 2017 to Sept 2018 prices were not down 25%, and in Sept 2019 they were not selling for $230K from what I can tell. Sure, asking price isn't selling price, but the majority of cars are asking $250K+ and the cheap ones are almost all grey/white.

720S depreciation has been pretty normal for the industry. You looking at about 15% of MSRP per year. That's actually quite reasonable.

They may be worse than you expected, but it was much better than previous McLarens and pretty similar to all other exotics in this price range.
 

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This is misleading. I've followed prices as well since I hoped for P11 depreciation again, and from Sept 2017 to Sept 2018 prices were not down 25%, and in Sept 2019 they were not selling for $230K from what I can tell. Sure, asking price isn't selling price, but the majority of cars are asking $250K+ and the cheap ones are almost all grey/white.
Yes another major point many ppl considering a used 720s don't get: the cheapos are nearly all 2017/18 base spec dealer demos, first order cars to get in line for a Senna and LE cars which often changed hands 2-5 times ... really no one wants these when you can have a better 2nd hand one without issues and at least a bit more individual spec for 20-30k more ...

Additionally these cars often did not cost more than 290-300k minus % the dealers gave to their good customers... effectively making them 270k-285k cars new (many are quiet basic) and McLaren also increased prices already 2 times since these were first sold)
 

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This is misleading. I've followed prices as well since I hoped for P11 depreciation again, and from Sept 2017 to Sept 2018 prices were not down 25%, and in Sept 2019 they were not selling for $230K from what I can tell. Sure, asking price isn't selling price, but the majority of cars are asking $250K+ and the cheap ones are almost all grey/white.

720S depreciation has been pretty normal for the industry. You looking at about 15% of MSRP per year. That's actually quite reasonable.

They may be worse than you expected, but it was much better than previous McLarens and pretty similar to all other exotics in this price range.
Noone2, Although I agree with you from Sept 17 to Sept 18, the MY18 cars did not depreciate 20-25% in year one, depreciation has accelerated this past year based on recent data pulled from Charlotte, Boston, Newport, etc. One-year old MY19 well-optioned (350 - 380K) performance coupes with under 2500 miles are now trading out for 75-100k less than MSRP. And last April Newport sold a 368k MY18 for 267. At any rate, we’re all lucky to be able to afford such toys regardless of the price.
 

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Good information. Unfortunately, no one can avoid the realities of mathematics, and the law of supply and demand.

I suspect the first large step in depreciation is simply the result of a large percentage of buyers (at least after the really initial wave) are paying a steep discount off of MSRP new. Buyers in the secondary market would be well aware of this as well.

The real depreciation curve might be better reflected by assuming some blended average off of MSRP.

So perhaps it goes:

MSRP = $360k

Year 0 = -10%
Year 1= - 17%

etc.
Thanks. You make a very good point.
 

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Noone2, Although I agree with you from Sept 17 to Sept 18, the MY18 cars did not depreciate 20-25% in year one, depreciation has accelerated this past year based on recent data pulled from Charlotte, Boston, Newport, etc. One-year old MY19 well-optioned (350 - 380K) performance coupes with under 2500 miles are now trading out for 75-100k less than MSRP. And last April Newport sold a 368k MY18 for 267. At any rate, we’re all lucky to be able to afford such toys regardless of the price.
well but again you take official MSRP ... MY19 cars could be had for 8-12% below MSRP at most dealers 350-38= 312 and 380-41= 339 if they sell now for 280-305 the loss is about 10-12% not 22%+
 

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well but again you take official MSRP ... MY19 cars could be had for 8-12% below MSRP at most dealers 350-38= 312 and 380-41= 339 if they sell now for 280-305 the loss is about 10-12% not 22%+
Correct and good point as Buster also made and I acknowledged.
 

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Even with depreciation, I think the 720s represents an incredible value for the performance. For example, a GT2RS at $400k or a 720s at $250k. Both with very similar performance on track with a nod to the 720s for straight line speed. First year or two, yeah, big depreciation hit. Following that a very gradual or flattening decline. It will be very interesting to see how prices hold up when the 18's start going out of warranty. So far for me, svc and maint has been nil. My guess is that these cars will age quite nicely with nothing major so values may hold.
 

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Even with depreciation, I think the 720s represents an incredible value for the performance. For example, a GT2RS at $400k or a 720s at $250k. Both with very similar performance on track with a nod to the 720s for straight line speed. First year or two, yeah, big depreciation hit. Following that a very gradual or flattening decline. It will be very interesting to see how prices hold up when the 18's start going out of warranty. So far for me, svc and maint has been nil. My guess is that these cars will age quite nicely with nothing major so values may hold.

Well that is certainly true but unfortunately the market has not been kind to McLaren when seeing the value for performance equation.

there are four cars today in the sub 1m segment performing at this level: GT2rs, SVJ, Pista and 720s ...

Of these the 720s is the only one easy to get at a dealer without having to own multiple other cars from that brand (GT2rs not made anymore) however SVJ and Pista Coupe are moving that direction now after initial hype ...

Only the 720s can perform at this level while being a fully usable daily driver and touring car at the same time ...

at MSRP the 720s was and still is by far the cheapest in its basic configuration (GT2RS is cheapest when fully loaded )

of these cars the 720s is the only non limited car

However the 720s is also the only car with significant discounts on slightly used ones of the bunch ... In my opinion that is somehow wrong and McLaren (as we all know) should somehow fix their used car values problem (better support, 7y warranty like Ferrari, own leasing bank etc.) its a pity things are like that and I hope McLaren finds a way to change that in the future ...
 

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I agree with other posters - I am at a number 2..

My situation is that I bought a new (116 miles/so used but effectively new) 2019 for 55K less than MSRP. So with that discount, I am not disappointed in the depreciation curve. If retail was paid, I can see that being an easy 3.

However, if you look at the exotic market as a whole, the substantial inventory and choices are significant. Everything from the 488, Huracan, normal Aventadors, even the F12s (which I just sold), 812s and even to the FF and Lusso's, Lambo SUV (a little different segment, but relevant). The prices of all these cars including the McLaren line-up are getting hammered in depreciation curve that 5-7 years ago was not nearly as bad as it is today. The volumes are up, number of competitors are up, etc. Which is going to drive higher inventories, and lower resale.
Unless production is limited, creating exclusivity there is really no going back to where most of these cars will see immediate stability in the depreciation curve or go up. I believe there will be a bottom, it will just be lower than what we had seen in the past. Again due to volumes, selection, and also we are at a cross roads in innovation (speed, agility, etc.) with electric add on's etc.

For those that want collections, will need to look back at some of the older F-cars, L-cars, or newer limited series from an price stability (appreciation) standpoint, as you have to go back in time or pony up to a rarer limited edition to get that lower production and exclusivity factor...

I think the volume, selection and innovation will continue to rise, thus creating further depreciation on all brands.

The best way to combat this, is to put miles on them, a lot of them - as there is no reason to make any modern (non-limited production car) a garage queen.

I will say the McLaren 720s is one of the best cars I have had from an all-in standpoint, I guess I am lucky that unlike my F or L cars of 15 - 20 years ago, I can just drive it and be happy to put miles on it, and no worries about resale/miles, as it is a blast to drive, and I am no longer worried about miles. (PS I also wasn't on my F12, as I knew it would have the same depreciation issues)
 

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I agree with other posters - I am at a number 2..

My situation is that I bought a new (116 miles/so used but effectively new) 2019 for 55K less than MSRP. So with that discount, I am not disappointed in the depreciation curve. If retail was paid, I can see that being an easy 3.

However, if you look at the exotic market as a whole, the substantial inventory and choices are significant. Everything from the 488, Huracan, normal Aventadors, even the F12s (which I just sold), 812s and even to the FF and Lusso's, Lambo SUV (a little different segment, but relevant). The prices of all these cars including the McLaren line-up are getting hammered in depreciation curve that 5-7 years ago was not nearly as bad as it is today. The volumes are up, number of competitors are up, etc. Which is going to drive higher inventories, and lower resale.
Unless production is limited, creating exclusivity there is really no going back to where most of these cars will see immediate stability in the depreciation curve or go up. I believe there will be a bottom, it will just be lower than what we had seen in the past. Again due to volumes, selection, and also we are at a cross roads in innovation (speed, agility, etc.) with electric add on's etc.

For those that want collections, will need to look back at some of the older F-cars, L-cars, or newer limited series from an price stability (appreciation) standpoint, as you have to go back in time or pony up to a rarer limited edition to get that lower production and exclusivity factor...

I think the volume, selection and innovation will continue to rise, thus creating further depreciation on all brands.

The best way to combat this, is to put miles on them, a lot of them - as there is no reason to make any modern (non-limited production car) a garage queen.

I will say the McLaren 720s is one of the best cars I have had from an all-in standpoint, I guess I am lucky that unlike my F or L cars of 15 - 20 years ago, I can just drive it and be happy to put miles on it, and no worries about resale/miles, as it is a blast to drive, and I am no longer worried about miles. (PS I also wasn't on my F12, as I knew it would have the same depreciation issues)
What you're describing is a market working as it should: high margins lead to more entrants into the marketplace, which leads to a decline in prices.

This is good news for the consumer - new car prices are correlated to used car prices. McLaren found this out, since their MSRPs are mostly ignored nowadays (like domestic cars in the 2000s).
 

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What you're describing is a market working as it should: high margins lead to more entrants into the marketplace, which leads to a decline in prices.

This is good news for the consumer - new car prices are correlated to used car prices. McLaren found this out, since their MSRPs are mostly ignored nowadays (like domestic cars in the 2000s).
Only trouble with that theory is they don't really have high margins but still need to discount their products heavily ... (see AM & McL financial statements) ... their competitors (Ferrari, Lamborghini, Porsche) have high margins bc they use simpler tech, have other sources of income which the use to subsidize supercar development e.g. SUVs or merchandise and so on ... so on the long run its not good for the customer as usually this means saving on quality and service which is the bad part if they need to go lower with prices ...
 

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Discussion Starter #20
... In my opinion that is somehow wrong and McLaren (as we all know) should somehow fix their used car values problem (better support, 7y warranty like Ferrari, own leasing bank etc.) its a pity things are like that and I hope McLaren finds a way to change that in the future ...[/QUOTE]

i would also argue that mclaren needs to open up to 3rd party service providers and independents like we have for porsche, lambo, fcars etc... they need to be more supportive of this... especially given lack of dealers
 
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