When does depreciation take in effect every year?

[NRG]

It seems as though the car depreciates in value of 4K-5K a year. Does it depreciate at 1/1 of every year? For instance,

In 2004, the 97 is worth 45K
In 2005, the 97 is probably worth 40K
In 2006, the 97 is probably worth 35K
etc.

 

[wctsao]

That might hold true if there were plenty of 97 models around. There were only 300 some made that year. Plus if your picky about color, thats even less to chose from. I seriously doubt a 97 will drop down to 35k since thats currently the price for some mint condition 91-94s and they have stabilized and don't seem to be dropping anymore. But you never know.

 

[Autophile]

A more realistic depreciation rate follows a non-linear curve, like a diminishing exponential function, i.e., the rate at which it reaches its minimum value decreases over time. Of course, the actual "minimum value" is debatable, but the rate by which it reaches that value follows a pretty common trend.

Of course, once the NSX is no longer manufactured, then we'll be talking about appreciation rates instead of depreciation. :smile:

 

[NRG]

A more realistic depreciation rate follows a non-linear curve, like a diminishing exponential function, i.e., the rate at which it reaches its minimum value decreases over time. Of course, the actual "minimum value" is debatable, but the rate by which it reaches that value follows a pretty common trend.

Of course, once the NSX is no longer manufactured, then we'll be talking about appreciation rates instead of depreciation. :smile:

I'll have to disagree a little bit about the appreciation value if it's discontinued. Maybe the first car produced with 0 miles might be worth a lot to a collector individual w/ $$$$. Let's say 10 years from now, the automobile industry will produce car with 400 HP with some nice body vehicle. We'll probably goo gaa daaa over the new selections out there. Don't get me wrong, but i love NSX. Would i be willing to pay more than it's value as of today? Most likely...not.

Based on the pattern on the price chart list, it's a pattern that a 97 will reach 35K - maybe within 5 years, but it will be 35K eventually.

http://www.nsxprime.com/FAQ/BuySell/pricing.htm

Shoot...I had an M3 that was depreciating 5K every year after I sold it. Of course, depreciation is expected in every car unless it's those supercar/collectors/limited production.

 

[Autophile]

Well, when my Cuda was new, it sold for $3000. In the years after that, the value went down, bottomed out, and then, once the appeal for the car started building back up, the prices have gone back up. Now, why on earth would a Cuda, with 1970's technology, be worth 3-600 times it's 1971 value* in 2004? I mean, since then, we've seen some great cars produced, with technology far above what the Cuda had. Who would care about a Cuda?

IMO, the value of a car is based on several parameters:

• volume of cars produced (Cuda: low)
• contribution to its niche (Cuda: high point of Mopar musclecars)
• quality of its following (Cuda: rabid Mopar diehards)
• sex appeal (Cuda: arguably one of the sexiest musclecars produced)

I predict the NSX will benefit from this same perspective on the resale market. In fact, I think the NSX eclipses everything the Cuda had on my list. Granted, it may take 20-30 years, but it will come.

* A 1971 Hemi Cuda convertible sold recently for $2 million.

 

[NRG]

thanks for your input. I guess i better start buying 10 NSX for my future retirement. If it doesn't go up, then i'll be looking for you j/k hehehe. You have a valid point.

Well, when my Cuda was new, it sold for $3000. In the years after that, the value went down, bottomed out, and then, once the appeal for the car started building back up, the prices have gone back up. Now, why on earth would a Cuda, with 1970's technology, be worth 3-600 times it's 1971 value* in 2004? I mean, since then, we've seen some great cars produced, with technology far above what the Cuda had. Who would care about a Cuda?

IMO, the value of a car is based on several parameters:

• volume of cars produced (Cuda: low)
• contribution to its niche (Cuda: high point of Mopar musclecars)
• quality of its following (Cuda: rabid Mopar diehards)
• sex appeal (Cuda: arguably one of the sexiest musclecars produced)

I predict the NSX will benefit from this same perspective on the resale market. In fact, I think the NSX eclipses everything the Cuda had on my list. Granted, it may take 20-30 years, but it will come.

* A 1971 Hemi Cuda convertible sold recently for $2 million.

 

[nsxtasy]

In addition to being a continuous function, not a stepped one, depreciation declines over time. Based on the current market values of various vintages NSX, a new NSX, purchased at a "great price" (let's say $78K for discussion purposes), drops in value by approximately the following amounts over the years:

1st year - $9K
2nd year - $7K
3rd year - $6K
4th year - $5K
5th year - $4K
6th year - $3K
7th year - $3K

One could argue that any particular figure needs to bump up or down a grand or two, but that's the trend.

That's where the '97 is now, after seven years. As you can see, the value is no longer dropping $5K per year. It's now more like $3K per year, and the amount it depreciates can be expected to continue to drop each year. At some point, depreciation will be close to zero, and prices will stabilize. Just as the prices of the '91-94 NSX have stabilized over the past five years or so, you can expect the same for the '95-96 NSX-T, but at a price level higher than that of the '91-94 (due to the removable roof panel). Similarly, the prices of the '97+ NSX will eventually stabilize at a level higher than the '95-96 (due to the various improvements added that year).

Once the car is about ten years old, values depend more and more on condition and mileage, and less and less on which model year the car is.

Bottom line: I wouldn't count on getting a nice '97 for $35K two years from now...

 

[wctsao]

Look at the Toyota 2000GT. They are going for something like 70k-90k and they have a Yamaha inline-6 with something like 150hp. Its not always about hp. In this case, it was Toyota's first super car, much like the NSX is for Honda.

I also agree that the NSX will appreciate over time. Personally, I don't see a low mileage well-maintained 97 NSX ever dropping below 45k. With Honda hardly building any new NSXs, I don't see the supply improving. Last month, I think they sold maybe 8 in the US.

I can see an M3 depreciating because BMW continues to evolve the car giving each new revision the same identity. As a result, the previous generation M3's identity is forgotten by all but the hardcore, if that makes any sense. The old M3's drop in price as everyone wants a new M3 at roughly the same price with more power and better handling.

Notice how Honda gave its new prototype a different name calling it the HSC. This give the NSX a place in history as a one off built by Honda.

 

[KGP]

I predict the NSX will benefit from this same perspective on the resale market. In fact, I think the NSX eclipses everything the Cuda had on my list. Granted, it may take 20-30 years, but it will come.

* A 1971 Hemi Cuda convertible sold recently for $2 million.

I disagree, yet I don't agrue the points you make. Make sense?
A) Production numbers for Cuda's was far lower than NSX's.
B) Years produced was far less.
C) The Cuda is a slice of American auto manufacturing history and the NSX is not.

I hope I'm wrong! But, I don't see the NSX appreciating. I do think the depreciation floor will somewhat stabalize, bu not move upward.

BTW, there was a hemi cuda that sold for far more than 2mil, but the sale price has not been advertised. Try 3+mil. Mopar world is just nuts right now. My partner just sold one of his, a superbird, that he bought a year ago for 75, dropped 65 into it, then sold it for 250K. Freaking nuts.

 

[nsxsupra]

C) The Cuda is a slice of American auto manufacturing history and the NSX is not.

Nsx price will probably never appreciate. I doubt anyone of us bought it with hope of it would appreciate someday.

It is however a slice of Japanese auto manufacturing history, also considered as national treasure.

Yes, seriously, I have read a few books and various magazines in Japan that actually call it national treasure.

I lived in Nishi Shinjuku (wealthy business district) in Tokyo for a year, most people probably would think NSX is common in Japan, but it is actually not common at all. In a sea of Japanese/Italian/German super cars, I saw a grand total of 3 NSXs in 1 year while living in Japan and that was in Tokyo area.

 

[KGP]

It is however a slice of Japanese auto manufacturing history, also considered as national treasure.

Yes, seriously, I have read a few books and various magazines in Japan that actually call it national treasure.

If it appreciates, it will do so in Japan. If the prices get out of hand, then that might effect our prices, but only because the appreciation in Japan is high enough to make sense for them to export US cars back to Japan. Once again, I don't see it happening. In fact, I'm not sure we will ever see something like the appreciation of cars from the US muscle car era.

 

[PowerKurve]

Will 91s with over 100k miles but in good condition ever see the teens, you think? As in, in a year or two, do you guys think it will be possible to find a nice high-mileage 91 for $17k ish?

 

[NsXMas]

Will 91s with over 100k miles but in good condition ever see the teens, you think? As in, in a year or two, do you guys think it will be possible to find a nice high-mileage 91 for $17k ish?

I seriously think not.

 

[gheba_nsx]

I think the NSX will bottom down at a maximum of 30k for very nice exemplars with low miles, whatever year they were built, in the far future (10 years from now).

The average price will be in the 15k for moderate conserved exemplars and 8-10k for very bad ones.

I have no proof or evidence about this but I just feel this way. I could be completely wrong of course...

 

[fkong777]

Car can appreciate. I was looking for a Supra Turbo for a long time and they seem to get more expensive as time goes.

If you were lucky and purchase a Supra Turbo before the Fast and the furious came out. You could prob get one for about 20K. Now they run for 30K minimum..

 

[Bram]

I think the NSX will appreciate in some years to come...here is my thinking.

Who are buying the muscle cars today..yep the Baby boomers!

Who are souping up cars (mostly Honda) today, so look down the road 10-12 years. These are the kids who will have the most disposable $$ to spend on their dreams...just like to Baby boomers are spending today.

Just a tought...

Bram

If it appreciates, it will do so in Japan. If the prices get out of hand, then that might effect our prices, but only because the appreciation in Japan is high enough to make sense for them to export US cars back to Japan. Once again, I don't see it happening. In fact, I'm not sure we will ever see something like the appreciation of cars from the US muscle car era.

 

[CokerRat]

As much as I love this car, I just can't see NSX demand increasing over the next decade to warrant appreciation.

Looking out another couple of decades, sure, prices could superficially appreciate due to inflation.

 

[Autophile]

A) Production numbers for Cuda's was far lower than NSX's.
B) Years produced was far less.
C) The Cuda is a slice of American auto manufacturing history and the NSX is not.

Gene, I had some thoughts on this subject that I wanted to post before I forgot about this thread. :smile:

Actually there were many more Cudas (and especially Barracudas) made than NSX's. All total, there were about 117,000 E-body Barracudas made during 5 years of production. Of those, only 23,000 were '70 and '71 'Cudas (the most valuable Barracuda versions). So even though the most valuable Barracudas were made for only two years, this number is still double the entire production run for NSXs. (Note: Even Barracudas cloned into Cudas are fetching high dollars. Therefore, the potential "Cuda market" is considerably higher, still.)

On another note, I agree that Japanese cars do not enjoy the same respect in the American collectable market that '60's and '70's muscle cars have. However, with the global center of economic power shifting toward Asian-Pacific countries and China in the future, the things that are valuable and cherished there IMO will have an influence on our pricing here (Counter-argument: Are NSXs desired in China? Do the Chinese even know about NSXs? I honestly don't know....). Even though NSXs don't appear in the Barrett-Jackson auction today, who's to say whether or not they will appear in the future? Could a comparable auction organization arise in Japan that has the same influence as Barrett-Jackson? Maybe...?

Lastly, in general, I have to think that with titanium connecting rods, a plant devoted to its construction, and all of the other groundbreaking things associated with this car, the NSX will be a true collectors item for those in the know.

P.S. My gut tells me the NSX is a special car. I had a Cuda WAY before they were popular, and now my stylistic taste is rewarded by the current collectable market. How could I be so wrong about a car (the NSX) that I KNOW is special? :biggrin:

Sorry about the long rant. Why in heck am I up so late tonight?? :tongue: :wink:

 

[drew]

Doubtful the NSX will be an investment car. Even if the JP market goes nuts: US cars are LHD....making them parts cars.

I sold off my 65 Mustang recently for 4x the original sticker price and the car had 650,000+ miles on it. The weekly production of Mustangs was greater than the entire run of NSX's. Making them very common and parts widely available.

The NSX has too many parts required for routine maintainence, they are very specific parts and only a few crossover onto other more common models. And it is not a slice of America.

It is going to be a real pain to keep the NSX going in 10-15 years. Buy up your head gaskets, seals and timing belts at least a couple of years before the dreaded 7 year after production phase out occurs. I think everything else can be machine or retro-fitted: ball joints, suspension links and electrical (mostly sensors and engine control).

BTW: Regarding investments: even cars that appreciate wildly (GT40's and Shelby's for example) are not as good as the So Cal house market has been for the past 40 years. While a GT40 could have been had for $10K in 1965 and $550K today...buying and selling your basic house a couple of times down here would have netted you ~$1M-$2M.

 

[tampajerry]

Is price not a function of supply and demand? Clearly the NSX supply is very limited compared to other cars. The price of the NSX has remained stable. Track the deprecation of any 91/92 car. Excluding the muscle cars of the 60s and early 70s, has any 14 year old car retained 50% of its selling price? My 35 year old vette had a production run of about 28,000. An average price today for a well cared for old vette is 6 times its original list price. How about a 40 year old XKE? The NSX is in a league of its own. No doubt their prices will bottom out and begin to appreciate. I can't think of anything that is a blast to drive turns heads and may even appreciate in value in the long run.

 

[paladin]

when you talk about that convertable hemi cuda, you have to take into the account the production number. There were only 8 or 9 hemi convertables made in that year, as most of the people that bought them wanted the hard top for performance reasons.
So that would be like tracking only Zanardi versions, except still even less production

 

[rmani]

Will 91s with over 100k miles but in good condition ever see the teens, you think? As in, in a year or two, do you guys think it will be possible to find a nice high-mileage 91 for $17k ish?

I've heard stories of a few high mileage cars going for the teens. Once a car has 120-150k miles, most people can't justify spending $25K on it. Just just gotta hope you get lucky and meet someone who really wants to unload it and has been trying for a while.

 

[nsxtasy]

in a year or two, do you guys think it will be possible to find a nice high-mileage 91 for $17k ish?

No.

 

[gheba_nsx]

Will 91s with over 100k miles but in good condition ever see the teens, you think? As in, in a year or two, do you guys think it will be possible to find a nice high-mileage 91 for $17k ish?

I think it is possible, depending the how "nice" is nice for you!

Anyway, IMO it should be possible to find it for even less in a few years from now: again, IMO , the average price will be in the 15k for moderate conserved exemplars in 8-10 years from now!

 

[Dan Ciezniewzki]

about 5 years ago a dealer here in Indy was going out of buisness had an 92 NSX with alot of miles (don't remember how many) for only $22k!!!! But take into consideration it's high milage and they were closing and just trying to get rid of it.