With some prestige cars losing up to half their value in less than a year of leaving the forecourt, more consumers are now choosing short to mid-term finance packages to negate the losses.
Specialist luxury car finance firm Bridford says feedback from customers shows more are turning to finance to avoid the risk of losing equity in the vehicle.
Bridford owner, Tim Marlow, said: ‘The depreciation level of some luxury vehicles is staggering. We are seeing cars with delivery miles losing up to £20k and others that are a year old dropping by half their value which equates to £50k in some cases.
‘Clients tell us flexibility is the key detail they are now looking for when it comes to paying for their motors. They want to avoid depreciation levels and have the ability to change their vehicles regularly so they are able to enjoy the latest releases.
‘It also gives them the option of assessing their vehicle and the car market in general. For example, they may choose to finance a Ferrari or a Bentley and then make a decision towards the end of the term to see if their model is likely to increase in price in years to come.
‘If they are sat on a potential modern day classic, they will settle the finance term and take ownership because they know they have a good investment or they will simple swap for a new model.
Marlow went on to say that Bridford has seen cars such as the Ferrari 458 and Lamborghini Aventador with prices reaching £245k and £330k against list prices of £173,181 and £242,280 respectively.
‘So by linking the facility to the depreciation curve via finance they can avoid paying into an asset that is losing its value and give themselves far more options by not tying up their capital,’ added Marlow.
Bridford also reports that clients are negotiating healthy discounts of up to £20k on top end vehicles as dealers look to clinch sales.