Have you noticed that the vast majority of exotic cars have very low miles on them? Whereas with our average cars we will drive around 14,000 miles per year, exotic cars typically will have only between 2,000 and 5,000 miles per year.
Sometimes it’s significantly less than this. I bought a 2013 Lamborghini Gallardo in 2018 and it had around 6,800 miles on. That means that since new, it had only done on average 1,360 miles each year!
Why do people buy these exotic cars and then decide not to use them? There are even examples of 10-year-old+ supercars that have done less than 100 miles! If you’re wondering why this might be, let me explain.
Why do exotic cars have low miles? Exotic cars have low miles as owners tend to use them during the weekends or are limited by finance agreements as to how many miles they can drive each year. There are other reasons behind this though, take a look at the below.
What exactly is an exotic car?
I’ll keep this brief as I’m sure you know what an exotic car is but just so we’re talking about the same thing. An exotic car (also known as a ‘Supercar’) is a high-performance, high-priced car.
These exotic cars are usually hand-built and can have numerous options, bespoke for each customer. Typical exotic car manufactures are Lamborghini, McLaren, Aston Martin, Ferrari, Porsche plus numerous others.
Exotic cars are produced in lower numbers than conventional cars. You may see models that have limited runs of 10,000 and then that’s it. Others will have production runs of less than this. Typically, there is a direct correlation between the number of cars produced and the cost of it.
Exotic car depreciation
All cars depreciate the second they are driven off the forecourt. Well, actually there is the occasional exception but for the purpose of this article, these exceptions aren’t relevant as they are so rare. Different cars can depreciate at different speeds and exotic cars are not exempt from this behavior.
There are many different things that can affect how quickly your exotic car will depreciate. Here’s a list of the main things (in no particular order) that can affect the resale price of your car.
- Make/Model – if you are looking to give yourself the best chance of keeping value in your car, acquire a limited edition model that has a lower production run. Of course, the problem with this is that it will cost you more to buy than a non-limited edition model!
- Options – when buying your car, think about what someone would want when it comes to sale time. They will want the car as fully-loaded as possible. If you have the options of an upgraded hi-fi, front-nose lift, carbon fiber, soft-close doors etc. then this will give you a small advantage when selling.
- Color – with an exotic car you are already limiting the number of people who will be interested in buying it due to the high cost. If you choose a controversial color-scheme then you could be limiting it even more. For instance, Rosso Red Ferrari’s will always sell easier than their other colors.
- Service History – with exotic cars getting that service stamp from an authorized dealer is a lot more important than with your regular car.
- Miles – the number of miles you put on your car has a huge impact on the resale price of your exotic car – this is what this article is all about, so read on…
There are other, smaller factors involved but the above are the main ones. If you’d like some more information on Supercar depreciation, check out my article to find out all about it!
The effect miles has on an Exotic Car
It is a fact that residuals on an exotic car are hugely sensitive to the mileage that they have on them. Some more than others. The depreciation curve is steep at first, particularly during the first couple of years, but over time it will start to level out.
Once the car has done more than around 50,000 miles or so, the curve slows down even more. There comes a point where the car has done so many miles that it has reached the bottom of the curve and actually, you will find that the cost gap between a 50,000 Ferrari and an 80,000 Ferrari is a huge amount less than a Ferrari with 50,000 miles and one with 20,000 miles.
Perhaps predictably. However, the preference for low-mileage exotics is so high compared to high-mileage it produces a huge disparity in residuals.
The above is the main reason why exotic car owners do not want to put a lot of miles on their cars. They know that if they have a low-mileage example, every mile they put on will reduce its value.
How many miles do owners typically do a year in their supercar?
Typically, exotic car owners will do anything between 0 and 5,000 miles per year in their supercar. This naturally varies and yes – you will always get the outliers that happily hit 10,000 miles + every year. Then there will be others that don’t use it at all.
Owners of exotic cars will usually have more than one car. They will have a ‘normal’ car that is used for station-runs, shopping, family duties, etc. Then, they will have the supercar that is reserved for sunny weekends and special occasions. It is not dissimilar from a toy.
This is the most common way owners keep the miles down on their exotic. I own a Lamborghini Gallardo and only usually use it during the weekend and when it’s sunny. Living where I do in England, I don’t get many of these!
Somehow, I still manage to drive 4,000 miles a year on average which is pretty good going I think. My logic is that I bought this car to be driven, not to have it parked in my garage.
I’d be lying if I said that the depreciation wasn’t on my mind though.
Insurance and Finance
Another reason why owners don’t do that many miles is that they aren’t allowed to! For instance, most insurance policies will only insure you for a certain amount of miles. You can increase this, usually at a cost.
A good way of keeping supercar insurance down is by limiting the number of miles you’re insured for. From an insurer’s perspective, the fewer miles you’re going to do the less chance you have of tonking it!
Next, we have finance-related restrictions. Most people don’t realize that the vast majority of exotic cars are purchased via finance (including mine). When you take this finance out you usually have to agree to an annual mileage limit.
This protects the financer as you may wish to hand the car back at the end of the term, depending on what finance package you have. They want to ensure it hasn’t done too many miles and is therefore worth significantly less than they expected.
Keeping it special
If you do the same thing day after day, no matter how good or how special that thing is, it will eventually lose its appeal. The same can be said of your exotic car. Every time I sit in my Gallardo, it’s special – even though a couple of years has passed since I bought it.
Would the same be the case if I used it every day? Personally, I don’t think so. I think it would lose some of its special appeal. So, this is another reason why the miles are kept down – as owners tend to keep their pride and joy for special occasions or weekends and therefore won’t put so many miles on as they would otherwise.
The Mental Dilemma
You generally buy an exotic car to drive it. However, depreciation is always on your mind as that can run into thousands of pounds every single year. I wasn’t expecting to have this on my mind when I bought mine but it absolutely is. Maybe it’s because I don’t have millions in the bank so if I’m going to lose a few thousand – it’s going to hurt.
Every single mile you drive you are taking money off the future sale price of the car. What this does is make you really think about the drives you’re going to do. These cars are for driving as I said earlier and that’s certainly why I bought mine. However, the miles you put on them need to be ‘good miles’!
Summary
It’s an odd one this and a problem I never thought of before I bought my Gallardo. I really didn’t think I would be that concerned as to how many miles I was driving! However, there’s no escaping the impact that miles have on the value of your exotic car.
Although insurance and finance agreements can be a factor behind the low mileage of these cars – personally, I think the main reason is that owners of exotics want the experience to be special and most have other cars which they can use for their day-to-day purposes.