Luxury vehicles continue to have strong sales.
Ferrari’s quarterly report shows an increase in revenue, indicating that high-end buyers aren’t deterred by the high prices, Barron’s reports.
Before taxes and fees, the luxury car maker reported $455.23 million in earnings. Total revenue reached $1.3 billion, higher than the projected $1.24 billion.
The Italian car maker shipped out 29% more vehicles this year than the same time last year—3,445 units in this quarter, according to Barron’s.
Ferrari’s newest vehicles—Portofino M and F8—start at around $300,000. The new models were responsible for Ferrari’s higher sales numbers.
Unlike other businesses affected by supply-chain shortages and the Russian and Ukraine war, Ferrari avoided slow downs in production by moving to unaffected areas.
Luxury vehicles accounted for 18% of total car sales in June, up from 17.3% a month before, according to Kelley Blue Book. On average, buyers paid $66,476 for each new luxury vehicle—the highest price ever recorded—while the average car price is just over $45,000.
While those in the market for a Ferrari may not be as concerned about vehicle prices, those looking for more practical used or new vehicles may have a more difficult time finding what they need.
Though increasing vehicle repossessions could mean more inventory in the used car market, car prices remain high.
Since 2020, some car buyers have been using pandemic relief funds to purchase new vehicles. Now that those funds are drying up, more car owners are defaulting on their loans.
Nearly 13% of car buyers have a record-high payment of $1,000 a month. That’s nearly as high as the average mortgage payment of $1,600, reports stock analyst C. Scott Garliss at Stansberry Research.
Of the repossessed cars, many that go to auction are worth less than the loan amount that still needs to be paid.
Even with increasing inventory and slightly lower prices, Kelley Blue Book reported that the average used car buyer paid $28,012 in June.
