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Prices Fall When Hard to Get Cars Become Available
Nissan looks to be moving forward in bringing the Skyline GT-R to the United States as a 2007 or 2008 model. This car will have a twin turbocharged 3.5 liter V6 that will produce 450 horsepower. This car should sell for around $62,000 to compete with the Lexus SC430 that currently lists for about $65,000. What is interesting about that price is that it is exactly $40,000 less then the $102,000 that you can currently buy the 300 horsepower Skyline for right now from Motorex this car includes a 2.6 liter inline 6 with twin turbo's and all wheel drive. The reason this car is in such demand is that even with the current engine the power is usually tuned to produce 400 horsepower and modifications to bring it up to 600 horsepower are possible.
Five years ago if you wanted the Mercedes semi military vehicle the G500 you would have had to pay about $120k. Mercedes then noticed that Arnold Schwarzenegger was driving one, and the car was becoming important in Beverly Hills, so Mercedes decided to import the car. They brought in two models the G500 at about 75k and the fire-breathing G55 with 469 horsepower at $102k. Although these cars are clearly expensive, (a fully loaded 2005 Toyota Landcruiser runs $55k) their prices still represent an enormous cost savings to those who had already decided to buy the car.
Much of this price dropping is due to U.S. laws requiring air bags, safer bumpers, and low emissions. Companies that brought over cars that were not built to U.S. specs have had to spend about $25k per vehicle to convert them to meet the U.S. standards which would then make the cars legal for U.S. registration. It might occur to you that this sounds like a good business, buying cars like three year old Ferrari’s for $70k in Germany, (there inspection laws are so strict that cars depreciate quickly as it is hard to keep them on the roads for more then six or seven years) then spending $25k to legalize them and sell them for $125k. It can be a good business but things can go really wrong. If you can’t seem to get the cars legalized, then you and your car and your $70k are in serious limbo. The problem is you can’t just return the car to Germany and sell it easily because the cars performance has been compromised, and it is almost impossible to sell the cars here if they are not street legal. When a manufacturer decides to bring a model to the U.S. market he spends the money to legalize the product and usually does a much better job with the conversion. More importantly cars imported by the manufacturer are under their warranty.
In a rare case the opposite can occur, instead of a manufacturer deciding to bring a car over, they can decide that it is too difficult to legalize a certain model and will stop importing them. The Land Rover Defender is such a model. The Kelly’s Blue Book value for a 1994 Defender has remained around $22,000 since 1994. Currently several 1997’s are fetching bids around $39,000 on EBay. This is a car that sold brand new for $25,000. Land Rover felt that it would be too hard to add air bags to this model. The decision to stop their importation led to the rare occurrence of a model vehicle’s value not suffering virtually any depreciation.
Some products that are very similar are sold under different brand names. The VW Touareg is almost identical to the Porsche Cayenne. When both are equipped with a 240hp V6 the VW cost about $37,000 about $4,000 less then the Porsche. Not too surprisingly, Porsche has no problem selling this car at a little over list, while VW is currently offering big discounts. The reason for this is simple, The Porsche is perceived as an $80k car while the VW is not.
The name on the hood means a lot, for the last couple of years Ferrari and Maserati have shared production. The Ferrari Enzo holds a place in history for selling at $500k over list when still new at the dealers. This year there is a new Maserati the MC12, it will have essentially the same V12 with 624hp as the Enzo, but with a list price of $810k. At $150k more then the Enzo’s list price 3 years ago it is almost impossibly hard to imagine they will sell for half a million over list.
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