Motoring: Burnt fingers for hot car speculators

If there's a bubble, it has to burst. Those who bought the Mercedes SLK at an inflated prices in the hope of selling on at a profit will have had their fingers burnt. The Jaguar XJ220 was another dud for speculators. But, James Ruppert discovers, there are always opportunities.

You only get what you pay for and when it comes to cars sometimes the list price just is not enough to buy the model of your dreams. If there is a queue for the car you want, instead of waiting years for delivery, then pay a little premium and get it parked on your drive tomorrow. That is exactly what happened earlier this year with the brilliantly marketed Mercedes SLK.

A sexy supercharged little roadster which at the push of a button became a proper metal-topped coupe and it was priced at only pounds 29,500. That is cheap for a Mercedes, so the SLK was never going to be short of customers. So unless you were a Spice girl, or Tim Henman, the chances were you could not have one. However, if you paid anything up to pounds 10,000 over the list price an SLK could have been yours. But that sort of premium is no longer required.

A casual flick through the more prestigious motoring classified ads in one newspaper turned up almost 30 SLKs. According to one Mercedes dealer, "The problem is that everyone ordered them in silver, a traditional Mercedes colour, mostly with a red interior. They are now everywhere and anyone who thought that they could make killing may well get their fingers burnt. There is now no reason to pay anything more than list price for this car." Even so, dealers are still quoting 18 months' delivery, but those who needed to be seen in an SLK before the Joneses have either paid a premium or can now take their leisurely pick. As supply meets demand and the models become a more familiar sight on the roads, then the market inevitably calms down.

Other models whose premium price bubbles have burst include the BMW Z3, Porsche Boxster and Lotus Elise. Like the SLK they were reputedly commanding prices significantly above their retail value. The BMW has probably hit the ground hardest, because underneath that James Bond-starring retro roadster styling is a humble 3-series Compact as many owners have discovered. The latest six-cylinder 2.8 version now makes the original 1.9 seem ordinary and there are dozens on sale. Another distorting factor is the increasing numbers of left-hand-drive Z3s, SLKs and Boxsters arriving from the Continent. The strong pound has inevitably helped and easily undercut the British retail price by up to pounds 10,000 in some cases. That is not good news to the private Porsche Boxster owner who was offering his 3,000-mile car at just pounds 500 over list price at pounds 41,800. He was finding that only car dealers were ringing him up, and offering pounds 5,000 less than he originally paid.

You cannot talk premium cars without talking to one man in particular. Tom Hartley. Never backward in pushing his premium car business forward, the ever quotable Mr "I may not manufacture cars, but I do manufacture their prices" Hartley is keen to reveal how good the the SLK has been to him this year.

"We had around 30 per cent of the supply, which means we sold over 130. I'd say it is one of the strongest premium models I have know in my career."

But its premium life is over and Mr Hartley has moved on to another Mercedes, the CLK 320, which now commands up to pounds 10,000 over the list price, and the latest Porsche 996. "I have sold seven of those so far and some Porsche dealers haven't even had delivery of their demonstrator models yet."

Proof positive that some areas of the premium price market-place is as dead as a dodo, is the dodo-like Jaguar XJ220. Back in the late Eighties Ferraris F40 and Porsche's 959 supercars became pounds 500,000 must-have toys and other manufacturers though they could join in.

So did the premium-priced speculators, hence the tragically mistimed Jaguar XJ220. An impressive car, but in the harsh economic reality that was 1992 pounds 415,554 plus VAT looked a little steep.

The lawyers got involved once the speculators could smell their burnt fingers and finally were relieved to walk away and leave behind a pounds 50,000 deposit. Now, the Jaguar dealer Grange has the last remaining, R-registered, left-hand-drive XJ220s on sale, for pounds 127,550. Plus VAT of course.

Although the Hartleys of this world see them at closer to pounds 100,000 these days.

And are there any tips for the future? Mr Hartley does not hesitate in naming the forthcoming M Class Mercedes, an American-built Range Rover rival.

"Already sellers are asking me how much it is worth and buyers want to know how much it will cost for immediate delivery. Like the SLK it will be very good for my business and it will definitely fetch a pounds 5,000-plus premium. As I've always said, there is no car I can't supply, at a price."

Tom Hartley 01283 762762; Grange Jaguar 01277 216161.