Join Date: Feb 2019
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Hypothetical Value Question
I'm pondering whether to buy a 2019 Scat Pack Wide Body or 2019 Hellcat Redeye Wide Body, whichever one it will be factory ordered in about a month. Haven't owned a muscle car since high school when I had a pretty low powered, but still pretty throaty with glass packs 65 Mustang with the 260 V-8 (built in 64 before they upped the displacement to 289). Had a lot of fun in auto shop playing with that car. Been driving family trucksters and Subarus ever since, but now ready to take the plunge into modern MOPAR heaven.
I'm wondering if experienced muscle car owners, or people with some financial savvy, might care to comment on this hypothetical question.
If someone could pay cash for a $56,000 Challenger Scat Pack, or $86,000 Hellcat Redeye, the difference would be parking $30,000 in the Hellcat Red Eye versus a bank, or other kind of investment. Banks are paying nothing in interest right now and 30k might earn $150 in interest annually, stocks carry risk, and it's not enough money to buy rental property. The flip side of low interest rates is these cars might be bought with an acceptably low rate and possibly people could afford the monthly payments, in which case the following math still pretty much works. So if this enthusiast kept either car for 10 years and averaged 5,000 miles/year, in 10 years the car would have 50,000 miles. Assume both cars would look awesome and be in great condition, etc - a loved car. I'm just guessing that the depreciation might be 40% for such a nice Scat Pack, and because of its relative rarity/desirability that the Red Eye similarly equipped might not depreciate as much. Uhh, let me reach around here...say 26%. It might not even lose that much value, especially if inflation kicks off and future cars cost a lot more - or the government or the economy or the larger car market causes these big block, high HP cars to stop being made en masse and they become even more prized collector items like our older muscle cars. If it was 40% for the the Scat Pack it would lose $22,400 in value and be worth $33,600. If it was 26% for the Red Eye it would lose $22,360 and be worth $63,640. They'd both lose the same dollar value, and so the yearly average cost of owning each car for 10 years is the same - $2,240. There is a higher insurance cost to the Red Eye - I'm hearing about double the Scat Pack's $760/year - but let's just talk about parking the money in these cars, and assuming a low lost opportunity cost of doing something else with the $30,000. My point is, especially if paying cash, that there is relatively little financial risk to buying the Red Eye. If the cost of ownership would likely be the same, why not buy the apex predator among 2019 Challengers and enjoy owning it? Of course, paying cash is impossible for many people, but I'm lucky enough to have saved up from all those family trucksters and inexpensive Subarus to do it.
Of course I could be wrong! A Red Eye's future value might do something unforeseen by my "never owned an expensive car" eyes. It's a question of relative depreciation.
If this appeals as a topic of discussion please throw in your two cents worth. Joining this forum and hearing the thoughts of more experienced owners and drivers who have bought and sold these kinds of cars before can give me perspective.