The Allocation — Issue No. 03

Lately the word going around is "bubble." People keep comparing this market to the late 1980s, when exotic prices ran up fast and then crashed hard in 1990. Maybe there's something to that. But it misses the quieter story that has already played out on the ground this year.

A lot of the cars that shot up early have already come back down. And they came down in a way that tells you exactly what this market is and isn't.

Take the Ferrari 812. A lightly equipped 812 is not a rare car. Ferrari built plenty of them. But when prices started climbing, the 812 rode that wave up with everything else, and for a few heady months a standard car with a plain spec was trading wildly above what it was worth.

Part of that early run-up was manipulation. Certain auction houses pushed numbers aggressively, and a handful of inflated headline sales set a price the rest of the market was never really going to support.

Then the obvious happened. Every 812 owner saw those numbers and listed their car. So did a lot of owners of other normal-production Ferraris. All of a sudden there were far more of these cars for sale than there were buyers, and the price corrected hard and fast.

Now you've got dealers sitting on cars they paid too much for during the run-up. The ones who didn't sell in time are taking painful losses to move them. That's happening right now, and it's not just the 812.

Here's the part I'd pay attention to.

The cars that corrected are the cars that were never actually rare. The run-up pulled them along for the ride, and when supply came back, the price went back to where it belonged.

The cars that held are the ones I've been writing about since the first issue. The genuinely rare, well-sorted examples. The right spec, the low mileage, the clean history, one or two careful owners. Those didn't drop, because there was never an oversupply of them to begin with. There can't be. That's the whole point.

So when people ask me if this is a bubble, my answer is that the frothy part already popped, and it popped on the common cars. The truly rare stuff barely moved. A run-up on a car that isn't rare is pure speculation, and speculation always corrects. A car that is genuinely finite is a different animal entirely.

A few things I'm seeing right now:

The losses are real on the dealer side. A car bought at the top of the run and still sitting on the lot is a serious problem, and some of these cars are being quietly dumped below what the dealer has in them just to stop the bleeding. If you're a patient buyer with cash, there are going to be real deals on the wrong end of that.

Spec is separating cars more than ever. Two of the same model, same year, are not the same car anymore. The one with the right options and the clean history held its value through all of this. The plain one is the one that fell. The market got picky, and it's staying picky.

And if you own one of the real ones, the noise around the common cars doesn't change what you have. The correction is happening a few rungs below you.

A new model I'm keeping an eye on: the Bentley Torcal.

It's Bentley's first all-electric car and their fourth model line, alongside the Continental GT, Flying Spur, and Bentayga. It's an SUV, built in Crewe, and the numbers are seriously strong. The base car makes around 810 horsepower, the S version a brutal 876, with up to 375 miles of range. Under the skin it shares a lot with the Porsche Cayenne Electric.

But the specs aren't what caught my attention. The pricing is.

From what I'm hearing, a nicely equipped Torcal is going to land in the mid $200s. That's a big deal. Bentley has spent the last few years pricing itself up and up. A Continental GT at the top end now climbs into the low to mid $400s. At that lofty number you're sitting right next to a Rolls-Royce Spectre and some very serious sports cars, which are not cars a Bentley should be cross-shopped against. They've been quietly pricing themselves out of their own lane.

A mid $200s Torcal brings them back in line. It's the right move, and I think it's going to help their sales a lot. I'll be watching how it's received once it's out.

How far the dealer losses go, because that's where the real deals show up for buyers who waited. And whether the correction stays contained to the common cars or starts reaching higher up the ladder. So far it hasn't.

Until then — if you're sitting on a car and trying to figure out which side of this you're on, reply and tell me what it is. Happy to give you my honest read.

— Brian

Brian Adelsman has spent twenty-five years in luxury and exotic automotive sales and runs an independent concierge brokerage built entirely on repeat and referral clients. He is the author of The Psychology of Exotic Car Sales.