Car Values, Mods and Such

[JPS Europa]

I am going to throw my $.02 in here. One of the things that brings down an entire model is when that model is not deemed worthy of keeping close to original. All of you track guys can do what you want. I am talking about street cars. Ferrari cars don't get much modding and I think that that helps their value. I have seen the Lotus Europa never really appreciate strongly, in spite of its rarity and historical importance (no flaming, it's true). I think a large part of this lack of appreciation, both monetarily and perceptually, is due to the fact that the car was somewhat affordable and people did odd (read UGLY) things to them. Again, track and racing mods are fine and don't hurt the breed (as long as you are fast and don't expect a return on your investment). Wheel changes are OK as long as you keep your old wheels and don't drive around with sparklers in them. Performance mods that are unseen don't hurt a cars reputation. But again, the mods should be reversible. Weird exterior and interior mods are the owners perogative (it is your car), but they don't help the long term value of the model. The perception of the car is cheapened. Now further down the road, these cars become available at a cheap price since a collector won't touch them. An original car becomes hard to sell for what it should because the buyers know that there are less expensive cars out there. Everybody knows that a true restoration costs more than the value of the car unless it is truly special. So as someone who plans on keeping his NSX a long time, I would like to keep values up. Some of these mods are driving down the value of ALL the cars. I am sure you know about DPO's (D**n Previous Owner). Don't be one.

FWIW, My Europa is still worth twice in $$$ what I paid for it new. Considering the time value of money, it is at about half its original value.

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Happy Motoring At all Costs!

[This message has been edited by JPS Europa (edited 13 February 2003).]

 

[nsxtasy]

Originally posted by JPS Europa:
So as someone who plans on keeping his NSX a long time, I would like to keep values up. Some of these mods are driving down the value of ALL the cars.

I'm not so sure that I agree - at least, not with the NSX, not in North America.

Granted, there are NSX owners who put big-@$$ wings on their trunk lid, and paint/upholster their interior in gaudy colors, and other, similar mods that are of questionable taste. But those cars remain a distinct minority of NSXs. Go to NSXPO and you'll see that the overwhelming majority of the cars are either bone stock, or have aftermarket wheels and not much else, or have performance mods while keeping the aesthetic changes to a minimum. So I don't think that the marque is being devalued by the few who go overboard in the looks department. Compare the NSX with some other models, such as the Integra Type R or the Supra, and you'll find that the NSX has retained its good looks, and its value as well.

Furthermore, as time goes on and the cars accumulate miles, it will become more and more difficult to find a "perfect" NSX, in immaculate condition, with low miles and no issues, so that such cars will continue to fetch a premium on market value.

Just my O.

Then again, I would strongly disagree with your first statement:

Originally posted by JPS Europa:
So as someone who plans on keeping his NSX a long time, I would like to keep values up.

As someone who plans on keeping his NSX a long time, I don't care a whit about market value.

 

[Rubber Chicken]

Originally posted by nsxtasy:
Compare the NSX with some other models, such as the Integra Type R or the Supra, and you'll find that the NSX has retained its good looks, and its value as well.

Not that you're wrong, I also believe that modified NSX's are the vast minority, especially those that have heavy cosmetic modifications. I just thought it was funny that you picked those two cars, the ITR and Supra and mentioned value.

I ran a few sample cars from edmunds TMV, and kbb.com and a few other used car sites, and saw on average, most cars lose 38% of their value after 3 years, this includes cars like the NSX, M5, Legend, etc.

I made a running list of the cars that held their value the best out of any others, and wouldn't you know it, Supra Turbo's only lose 5-10% of their value after 3 years, maybe even less. And Integra Type R's lose only 10-15%.

As as example, 98 Supra's will sell for around $32k. And in 1998, Toyota dropped the price down to 38k because they weren't selling. Talk about a good investment.

Also you can find some good condition 98 ITR's going for around 19k when their MSRP was about 24k. Heck my 1999 (a whole year newer) 3.2 TL MSRP'd at 29.8k and its worth less than that.

I just thought it was peculiar that you picked the two worst examples of depreciation.


(as a side note, 3rd place was given to the Ferrari 360 Modena, which loses only 22-25% of its value over 3 years. (from ~$190k to $140k) )

[This message has been edited by Rubber Chicken (edited 11 February 2003).]

 

[nsxtasy]

Originally posted by Rubber Chicken:
I ran a few sample cars from edmunds TMV, and kbb.com and a few other used car sites, and saw on average, most cars lose 38% of their value after 3 years, this includes cars like the NSX, M5, Legend, etc.

For several years now, you could buy a new NSX for around $75K, more or less. A nice 3-year-old NSX generally sells for around $60K, give or take. That's a 20 percent loss of value, not 38 percent.

Originally posted by Rubber Chicken:
I made a running list of the cars that held their value the best out of any others, and wouldn't you know it, Supra Turbo's only lose 5-10% of their value after 3 years, maybe even less. And Integra Type R's lose only 10-15%.

I question those figures, too.

Originally posted by Rubber Chicken:
As as example, 98 Supra's will sell for around $32k. And in 1998, Toyota dropped the price down to 38k because they weren't selling. Talk about a good investment.

Well, it's not exactly fair to pick only the last year the car was on the market, when they dropped the price; after all, if you took the previous year, when the price was $10K higher, they would show as a much poorer investment.

And, with most '98 Supra Turbos typically selling in the high twenties (and earlier ones in the low twenties), that's not 5-10 percent from their original selling prices. Check your math.

Originally posted by Rubber Chicken:
Also you can find some good condition 98 ITR's going for around 19k when their MSRP was about 24k.

No, they don't. Good condition '98 ITRs generally sell for around $17K with relatively low miles, $15K with higher miles. For $19K you can get a 2000-2001 ITR with average miles.

However, your point is well taken - the Supra and the ITR both retain their value well, just like the NSX, despite a plethora of examples with lots of mods that are not exactly in good taste to most observers, much more widespread than for the NSX.

Originally posted by Rubber Chicken:
I just thought it was peculiar that you picked the two worst examples of depreciation.

Perhaps you missed my point, Rubber Chicken. Those examples show that it's possible for a model's market value to remain high (especially for nicely-maintained bone stock examples) at the same time as its image is being negatively affected by widespread modifications of questionable taste. As I noted, compared with other models, the NSX retains its good looks and its market value, while many lose one or the other, or both.

Incidentally, one other reason I don't worry about the market value of my own cars (in addition to a lack of plans to sell them) is that I believe that the market is too big. One person cannot affect the market value by trying to talk prices up or down, or by trying to encourage or discourage owners from doing mods to their cars. Not with 8000 cars in the country, and many of them on the market at any given point in time.

[This message has been edited by nsxtasy (edited 11 February 2003).]

 

[milz50]

I crack up every time I see someone quoting KBB prices because their estimates are so poor.

For example, an excellent condition (the best condition according to KBB) 1991 NSX with manual trans and 40K miles will sell via private party for.... $23,405.

This fair market value estimate is crap. It's not like they are a little low in their estimate; this estimate is egregious. Has, in the history of the NSX, an excellent condition (clean title, low mileage, manual trans) example ever exchanged hands for 23K?

My conjecture is that KBBs pricing issue is isolated to certain models that have anomalous depreciation curves. It's apparent that their estimates are based on some formula rather than empirical market research. My guess is that KBB is relatively accurate for most makes and models. They should either do the necessary market research to arrive at plausible estimates for the models that do not fit their standard depreciation curves or refuse to quote prices for these examples. In its current state, I'd be embarrassed to be responsible for the content of the KBB.

Whew…I feel better now.

 

[JPS Europa]

I guess that I did not infer strongly enough that the values I am worried about are those that are 15+ years out there. Just about every car is going to lose value during the initial period. The NSX is a historically important car and should be preserved (both physically and in the market). I expect appreciation way down the road. The degree of $$$ appreciation is directly related to the way we (the NSX community) take care of our cars today. I agree that most cars are tastefully upgraded or left stock. This is good. The problem is going to be those cars that are messed up. Those cars will end up on the market at low prices and do affect the whole market because buyers see the price and it gets factored into their thinking. I don't want it to end up like the Europa market where the only way a car gets cleaned up and gets back on the road is if it is a labor of love. Having said that, I believe that the number of those cars on the road is increasing as most of the cars are now in the hands of folks who truly care about the cars and the history they represent. My problem is that those cars should have appreciated to a much greater degree. They have not because there are so many poorly repaired and modified cars out there. Again, track and competion cars are excluded from the complaint. Some of these old Europas are still pretty competitive! Of course a big part of the problem is Honda marketing (or lack thereof). Lotus did a better job (AND they had more factory ugrades with significant changes))and that is a sad comment.
Carry On!


------------------
Happy Motoring At all Costs!

 

[Rubber Chicken]

Originally posted by milz50:
I crack up every time I see someone quoting KBB prices because their estimates are so poor.

I'd agree in saying that the car isn't worth what YOU think it is, its worth whatever anyone is willing to pay for it.

For better or for worse. Someone with no clue who has an Original Shelby Cobra 427 thinks "hey I have a clunky ass piece of junk, I'll put it up on autotrader for 3k"

Next day he gets an offer for $100,000. Is it worth 3k or 100k? 100k obviously since someone was willing to pay it.

My point here is that you take standards like kbb and tmv with a grain of salt. I merely mentioned them as a reference to let you know I looked a lot of places.

A decent way to get an estimate of what ppl will pay is over a period of time check on ebay and look at 'completed auctions' and see what prices the cars sold for. Again take with a grain of salt. You could look on car bulletin boards for sale sections, and see the prices cars have sold for. Usually the most knowledgable people about that specific car type will be found on bulletin boards such as this. Also you can see sometimes on dupont registry (although they tend to inflate the prices somewhat) the prices cars will typically sell for 3 years after they were built.

And in all this, only compare data to data that was found from the same source. I think its absurd to compare TMV's to Dupont Registry selling prices, or Ebay prices to KBB's. compare KBB's to KBB's and Autotrader's to Autotrader's, and I think you can walk away from the results with a fairly sound idea of market depreciation of a specific vehicle.

Do you not agree?

 

[Ryanmcd2]

Anyone looking to by a NSX for an "investment" is a fool to start with. Just like someone buying Honda stock because they like the NSX is a fool and that is an emotional decision.

 

[nsxtasy]

Originally posted by Rubber Chicken:
Do you not agree?

I don't agree that eBay is a good gauge of market prices. The problem with eBay is that there is a significant risk of misrepresentation and fraud. As a result, prices there tend to be lower than elsewhere, and there is a disproportionate number of poorly-maintained cars there. The avid NSX enthusiast is much more likely to advertise cars on the NSX forums (e.g. NSXprime). Even Autotrader is a better place to sell a nice NSX than eBay.

 

[Imola]

The one Great advantage to Ebay is the tremendous exposure in a short period of time. Far more people see an Ebay ad than an autotrader ad over the same period of time. Reach is very important in selling a car and at this time, Ebay seems to have the longest arm. Keep in mind that your use of Ebay should be for exposure and not necessarily for a winning bidder.

 

[nsxtasy]

Originally posted by Imola:
Far more people see an Ebay ad than an autotrader ad over the same period of time.

Not true. Autotrader is the leading website for reselling cars. In fact, eBay listings also show up on Autotrader (since they're all one company).

eBay, Autotrader, and cars.com will all give exposure to many, many shoppers in a short period of time.

Originally posted by Imola:
Keep in mind that your use of Ebay should be for exposure and not necessarily for a winning bidder.

I would be very suspicious of anyone putting a car for sale on eBay without any serious intention of selling it through the auction. Your comment just points out one more way that sellers are misrepresenting themselves on eBay.

[This message has been edited by nsxtasy (edited 12 February 2003).]

 

[Imola]

It isn't a misrepresentation trying to sell an item on ebay without truly expecting to get someone to place the actual bid. I have sold quite a bit of my camera gear using ebay as the listing source. So many people would not bid but would contact me post auction to inquire about buying it. There seems to be an issue of bid-phobia with many people. For whatever reason, they aren't comfortable placing the bid yet they are very interested in the item.

The gentleman who purchased my '02 Imola was very active in contacting me during the auction, along with about 30 others. He never decided to purchase until the auction was over even though he told me he was probably going to purchase it while the auction was running. I'm assuming he falls into this group that are NOT comfortable placing of bid of that magnitude.

Your comment that seller's are using this to misrepresent in some way shows you truly don't understand ebay and the way many people's minds work. If you have sold on ebay before, you know that many times people won't place a bid no matter how good a deal it is. It's a big commitment to place a bid for $1,000, let alone $70,000 on an item you probably haven't seen in person. It seems to me that many buyers contact the seller post auction as there is less commitment on the buyer's end and they can change their mind without the repurcissions of having negative feedback left for them.



[This message has been edited by Imola (edited 12 February 2003).]

 

[nsxtasy]

Originally posted by Imola:
Your comment that seller's are using this to misrepresent in some way shows you truly don't understand ebay and the way many people's minds work. If you have sold on ebay before, you know that many times people won't place a bid no matter how good a deal it is.

Well, there you go, making false assumptions. The fact is, I have bought and sold quite a few items on eBay.

It is indeed a misrepresentation to place items up for sale with no intent to sell them via the auction. And it is a violation of eBay's rules for buyers and sellers to use eBay to contact each other and complete a transaction outside of eBay on items placed for auction there.

Here are the eBay rules for buyers:

eBay Policy

Soliciting off-site sales is a form of fee avoidance that circumvents the eBay fee structure. It is strictly prohibited.

Examples:

The following activities using member contact information obtained through eBay are not allowed:

- Using member contact information obtained from eBay or using any eBay feature to offer to sell any listed item outside of eBay. However, it is acceptable for a buyer to email the seller and ask to end the item early at an agreed upon winning price.

- Offering to sell any listed item outside of eBay

- Canceling a listing to sell the item to anyone who contacted the seller through eBay or became aware of the item through eBay

- Ending a listing early to sell the item at a higher price to the winning bidder

- Offering to sell an item outside of eBay to any of your bidders in a Reserve Not Met listing.

- Offering to sell duplicate or additional merchandise outside of eBay to underbidders

- Sending unsolicited (without prior permission) commercial email offers to bidders for the same or similar products that they have bid on in the past.

Here are the eBay rules for sellers:

Circumventing fees by soliciting sales outside of eBay

The following activities are not permitted:

- Using member contact information obtained from eBay or using any eBay feature to offer to sell any listed item outside of eBay

- Using member contact information obtained from eBay or using any eBay feature to offer to sell an item outside of eBay to any of your bidders in a Reserve Not Met listing.

- Using member contact information obtained from eBay or using any eBay feature to sell duplicate or additional merchandise outside of eBay to underbidders

- Sending unsolicited (without prior permission) commercial email offers to bidders for the same or similar products that they have bid on in the past

Apparently either you don't understand ethics, or you don't care that what you are doing is unethical.

[This message has been edited by nsxtasy (edited 12 February 2003).]

 

[cpmoran]

Originally posted by JPS Europa:
I guess that I did not infer strongly enough that the values I am worried about are those that are 15+ years out there. Just about every car is going to lose value during the initial period. The NSX is a historically important car and should be preserved (both physically and in the market). I expect appreciation way down the road. The degree of $$$ appreciation is directly related to the way we (the NSX community) take care of our cars today. I agree that most cars are tastefully upgraded or left stock. This is good. The problem is going to be those cars that are messed up. Those cars will end up on the market at low prices and do affect the whole market because buyers see the price and it gets factored into their thinking. I don't want it to end up like the Europa market where the only way a car gets cleaned up and gets back on the road is if it is a labor of love. Having said that, I believe that the number of those cars on the road is increasing as most of the cars are now in the hands of folks who truly care about the cars and the history they represent. My problem is that those cars should have appreciated to a much greater degree. They have not because there are so many poorly repaired and modified cars out there. Again, track and competion cars are excluded from the complaint. Some of these old Europas are still pretty competitive! Of course a big part of the problem is Honda marketing (or lack thereof). Lotus did a better job (AND they had more factory ugrades with significant changes))and that is a sad comment.
Carry On!

JPS Europa, I would also like to see the price of the nsx go sky high, but I dont think a few kids wacking out their car is going to make a diff. I also think if everyone with a nsx did some very ugly "rice" mods and you kept yours stock and in mint condition your nsx would be sooo wanted by everyone who collects cars. Imagine every nsx was wrecked beyond repair and yours was the only one left. It would be priceless. Just my 2cents I also wish that the nsx value would drop soo low that I could buy 2 or 3 more. And everyone on nsxprime could buy 2or 3 until we own every one in county, and we wont sell them for less than 100k but thats dream land.

 

[kgb_agent]

Originally posted by Rubber Chicken:
For better or for worse. Someone with no clue who has an Original Shelby Cobra 427 thinks "hey I have a clunky ass piece of junk, I'll put it up on autotrader for 3k"

Next day he gets an offer for $100,000.

I want to meet the person who bids $100,000 on an item with an asking price of $3,000. I have a house I'd like to sell him...

 

[nsxtasy]

Originally posted by kgb_agent:
I want to meet the person who bids $100,000 on an item with an asking price of $3,000.

Hey, I want to meet the person who offers a car worth $100,000 and only asks $3,000 for it.

 

[Imola]

Originally posted by nsxtasy:
It is indeed a misrepresentation to place items up for sale with no intent to sell them via the auction.

When did I ever state that I didn't intend to sell the items via auction? I don't place items on ebay unless I want to sell them, otherwise, why waste my money? All I am stating is my real world experience with regards to ebay. If someone contacts me after the auction ends and wants to buy the item at an agreeable price, I will damn sure sell it to them. I DON'T consider that in any way unethical and I'm sure others would agree.

[This message has been edited by Imola (edited 12 February 2003).]

 

[mlambert890]

The point is that EBay cannot be viewed as a reliable source of info. Whether using it as "advertising" is ethical or not, too many people do it for the auction results to mean anything. The same cars list over and over, "closed" auctions really translate to an actual sale, and there is a new scam monthly.



[This message has been edited by spookyp (edited 12 February 2003).]

 

[snapper]

Knock KBB all you like. Their numbers are close.

As far as Ebay, look at the ending bids. When averaged this is what MOST are willing to pay. Usually lower than KBB. Like it or not, more and more ebay is setting market price on everything.

This forum is not unique in that most have strong emotions on the topic.

Is the NSX a nice car? Sure. But the fact is your NSX is only really worth what you can sell it for NOW, today. And the more mods the fewer buyers.

 

[nsxtasy]

Originally posted by snapper:
Knock KBB all you like. Their numbers are close.

No, they're not. I can sell NSXs all day long at prices that are thousands of dollars higher than KBB claims.

Originally posted by snapper:
As far as Ebay, look at the ending bids. When averaged this is what MOST are willing to pay. Usually lower than KBB. Like it or not, more and more ebay is setting market price on everything.

No, they're not. Most of the car auctions don't close, because the bids don't reach the reserve price. Is that because the only bidders are lowballers looking to buy a car at less than market, or because bidders won't pay market prices because of the frequency with which sellers misrepresent their items and their intention, or because the sellers have too high an opinion of their cars' value? I've seen all of these factors in operation on eBay.

Originally posted by snapper:
Is the NSX a nice car? Sure. But the fact is your NSX is only really worth what you can sell it for NOW, today. And the more mods the fewer buyers.

I'll agree with that.

 

[snapper]

nsxtacy,

When I say Ebay is setting market price on everything. I mean everything. Not just cars.

Each bidder has their own reasons for their bid limit. But like I say, when averaged, you have a good idea what most think your item is worth.

NSX example: There is a local 91 red/ivory, museum clean and maintained with under 15k miles. The seller is asking 37.5, and has had the car on the market for 5 months. After checking the car over I discovered it is in snap ring range. All things (re-sale/tranny replace) considered I offer him 31. He is insulted. Two weeks later I see the car on Ebay. Guess what the ending bid was?

That's right, 31.

BTW, I did not bid.

 

[milz50]

Originally posted by snapper:
nsxtacy,

When I say Ebay is setting market price on everything. I mean everything. Not just cars.

Each bidder has their own reasons for their bid limit. But like I say, when averaged, you have a good idea what most think your item is worth.

NSX example: There is a local 91 red/ivory, museum clean and maintained with under 15k miles. The seller is asking 37.5, and has had the car on the market for 5 months. After checking the car over I discovered it is in snap ring range. All things (re-sale/tranny replace) considered I offer him 31. He is insulted. Two weeks later I see the car on Ebay. Guess what the ending bid was?

That's right, 31.

BTW, I did not bid.

The bottom line is that the Ebay auto market is, in economic terms, less efficient than their auctions for DVDs, electronics, and gift certificates (commodities). Bidders are vulnerable entering into a blind binding contract for a high-price, condition sensitive item. The short duration and geographical issues inherent in these auctions are barriers to market efficiency.

Did the car sell at 31K? Perhaps the seller has an inflated estimate of the value of his car. On the other hand, perhaps the Ebay market has underestimated the value of his car. I'm not judging either way. A ton of potential buyers and sellers does not necessarily constitute an efficient market.

 

[milz50]

Originally posted by Rubber Chicken:

And in all this, only compare data to data that was found from the same source. I think its absurd to compare TMV's to Dupont Registry selling prices, or Ebay prices to KBB's. compare KBB's to KBB's and Autotrader's to Autotrader's, and I think you can walk away from the results with a fairly sound idea of market depreciation of a specific vehicle.

Do you not agree?

No, I don't agree. I wouldn't use a source (KBB) for my evaluation that isn't even close to accurate. If you use crap data for your analysis, your result will be crap - regardless how sound or valid your analysis is.

KBB reminds me of those calculators that measure your body fat. You enter your height, weight, age and sex and are told that you are X pounds over or under weight. The creators of these programs create formulas that are a best fit for the entire population.

I always crack up at the results of these body fat calculators. I am told that I am obese (+30 pounds overweight). I could probably lose a few pounds (maybe 10), but there is no way that I am obese. My guess is that most people with my age, sex, weight and height actually are obese because they have more fat and less muscle. It works for most, but has its limitations. A live evaluation of the persons' measurements gives much more accurrate results.

KBB has implemented a 'best fit' formula similar to these fat calculators. Obviously, they don't have the resources or motivation to actually evaluate the market, so they'd prefer to risk their credibility and deceive their users by printing inaccurate values.

There is a difference between the fat calculators and KBB. The fat calculators always have a disclaimer that they are not accurate for all individuals. KBB represents that they are "The Trusted Resource", which is laughable.

 

[milz50]

Originally posted by snapper:
Knock KBB all you like. Their numbers are close.

This forum is not unique in that most have strong emotions on the topic.

I should have included examples for cars I don't own. How about an '87 Buick Grand National (Excellent condition, 50K miles)? KBB says $8,200. I think you'd be doing well to find one for 150% of that price.

Is the NSX a nice car? Sure. But the fact is your NSX is only really worth what you can sell it for NOW, today. And the more mods the fewer buyers.

Man, I'm really disagreeable today...

I probably could have sold my NSX for about 22K TODAY. If you give me a week, I'd probably get about 25K for it. If I had a couple of month's time I could most likely get 28-30K. A car isn't very liquid. Ebay increases liquidity by creating a marketplace for buyers and sellers, unfortunately, the short duration of an Ebay auctions would probably net me only about 25K for my car.

I definitely agree with the more mods fewer buyers.

 

[Lud]

Originally posted by snapper:
Knock KBB all you like. Their numbers are close.

HAHAHAH!!! That is hi-freaking-liarous!

I'll make you an offer:

KBB tells me private party sale value on an excellent condition 1991 NSX 5-speed with 15,000 miles is $23,405. Even if I put in a high cost-of-living ZIP code like LA, the most I can get out of KBB is $27,005.

I will pay you $2,500 cash more than the KBB value for every car like that you can provide me with.

At $2500 profit on each one, you should be able to make tens of thousands a month in your spare time.

I am quite serious. I'm anxiously awaiting the first one...

BTW why did you offer $31k for a car KBB says is worth thousands less if you believe KBB is accurate?

[This message has been edited by Lud (edited 13 February 2003).]