The Great Depreciation Cloud that can Offer a Silver Lining

There are many models in the luxury sector that, due to the cost of fuel, are becoming increasingly illogical for their original purpose. Cars that were lauded five years ago carry technology and engineering that is becoming obsolete when oil is nudging $120/barrel, and there is the spectre of relentless demand from Emerging markets for the black stuff. On top of this, governments are seeking to heap more duty onto the price we pay at the pumps to help relieve the already hemorrhaging public coffers.

Take the BMW M3 for example. In the mid 2000s we saw, what was effectively, an arms race spring up between Mercedes, Audi and BMW in the small luxury Saloon/Coupe sector. The E90 M3 was launched in late 2007 with a high-revving naturally aspirated V8 engine that produced 420 bhp. The car’s powerplant was largely dictated by its competitor, Audi, who had launched their popular new RS4 with a V8 engine. Both cars were lauded by the critics: the chaps who drive them for a few days and then hand the keys back. To live with though, these cars are quite a different proposition. I remember buying one in a fit of pique early in 2008. Switching from a Porsche 911 I remember thinking that the BMW seemed to be guiding me to the pumps more often than I would have liked. I put it down to the fact that the car, being brand new (what was I thinking?!), was taking a while to bed down and that eventually it would start delivering a more economical return. I was wrong, owning the car for three years I only once managed to ring out 300+ miles in one tank and that was driving at 70mph in 6th gear from London to Newcastle. I remember how proud I was of covering such a “long” range. Yesterday I read in the Sunday Times that the new BMW 3.20d has a touring range of 800 miles and can sprint briskly from 0-60mph in 7.5 seconds! By the time I traded out of the M3 I had become obsessed with watching the fuel gauge needle, trying my hardest to be keep the car at low revs and in high gears at all times - what a miserable way to drive such a fabulous car. I averaged 18mpg for 30,000 miles over 3 years.

I have found myself going full circle and back to a car I originally owned 6 years ago. A fortnight ago I collected a 2006 E46 M3 CS from an approved dealer in Glasgow and was shocked at the fuel economy compared with newer V8 powered car. Without trying, I squeezed out 400 miles of motorway touring down towards London. The fuel-tank needle on the straight-6 car had hardly moved a millimetre by the time I drove past Edinburgh. As I left Glasgow and re-familiarised myself with the old M3, I began to wonder why I ever sold my first one all those years ago. It is a good size, has a reasonable boot, the rear seats are no smaller than in the newer model, and has all the performance one needs in the real world. The six cylinder may not have the grunt of the V8 but the “6” is keener and sharper for a mixture of urban and extra-urban driving. I found you had to really work the V8 in its lower gears to get it really hot and bothered, and of course the results were mind blowing, but, guess what? The fuel was getting combusted faster than you could fill the thing up (at £1.35/litre!!).

So, for those fortunate enough to have a few extra pennies to deploy, these unprecedented times are throwing up some interesting buying opportunities. I reached for an “expensive” E46 M3 and shelled out £17.5k for the rarer CS version (£45k when new), but good, standard stock examples are available for around the £13-16k mark – astonishing bang for your buck. And if you just want a sportscar car for weekend driving, I would not discount the newer V8, just be aware its shorter range, heavy penchant for premium unleaded and Michelin Pilot Sports sneakers. Expect to pay no more than £25k for a 35k miler (£55k when new). The deals continue among other thirsty, heavily depreciated V8s or performance cars that were manufactured in large numbers, particularly the Porsche 911 (997s). Audi S5s, Mercedes C63 AMGs, Maserati Gran Turismos and Nissan GTRs are all taking a bath and still have further to go with so much uncertainty paralysing the broader economy. If you decide to buy, there are bundles of fun to be had!