Are Exotic Cars Immune to Depreciation?

Lamborghini, Jaguar, Rolls Royce, and Mercedes Benz, these are all companies that make everyone think of high quality and big bucks.

This bias conclusion is exactly the reasoning behind the anti-depreciation of exotic cars. When you look at the facts, depreciation is widely controlled by the view from the consumer market. If a car is uncomfortable, unreliable, or even just an ugly color; it will depreciate faster than other cars. A car can lose its value because it is undesirable. In the other aspect of the market, if a car has superior handling, is massively comfortable and looks awesome, everyone will want one. This is called appreciation, the opposite of depreciation. It happens when an object gains value; in this case we are talking about exotic cars.

Exotic cars also gain appreciation because they are usually the cars on the market that get dressed up with all types of goods. Adding new electronics, and giving the car a new wardrobe, makes a car so different and unique, the value automatically increases. This makes most exotic cars highly desirable. They are unique and cater to each and every individual's needs, which means more consumers 'want' these cars even if they are wildly expensive, or completely unpractical. Everybody would love to drive one of these cars. People who drive Honda's, to even when you think luxury couldn't get any sweeter, Lexus drivers.

The high tech and high quality auto parts that exotic cars have are main reasons why these cars do not noticeably depreciate. It has been shown that most exotic cars will depreciate once you drive them off the lot; however they hardly ever drop in value after that. This is because the dealers know that the consumers who are able to afford the high price of these over priced mighty machines can usually shell out a bit more to get what they want. If you look at it from another angle, the car itself didn't really depreciate at all. It was not the car that lost value, seeing as it was sold for more than it was really worth, it's just the original sticker price that goes down.

Even with that in mind, after the initial drop of value on the drive home, an exotic car only loses a little bit of its value in its first 5 years. This depreciation rate is remarkable when compared to the average vehicle, which shows a depreciation rate of losing half of its value after the first 5 years. After a 5 year period, most exotic cars even retain their value for a lifetime.

Even when an exotic car gets to its 10th year, it will still hold its high value. That is, if all of its parts are still in working condition, it has had great maintenance, and it offers great custom options that no other car has. Not only that, but because there really isn't a large market for super exotic cars, there are not so many of them made. This makes each one a rarity in its own right.

Are exotic cares immune to depreciation? Realistically, they are cars and the more they are used the less they should go down in value. However, as long as there are always people out there who dream of having a superstar like car, and there are people to afford adding such assets, than depreciation almost isn't even in consideration.

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