Luxury car sales have taken off over the last six months, according to an industry insider who says it's been the busiest time he's seen in 20 years.
Mortgage rates from as low as 2 percent have made it cheap to borrow money. Rising house prices have made it difficult for first home buyers, but those who already own one or more properties have seen the value of their assets go up. As a result, many felt better about splashing out on luxury items.
Kerry Hoffman, senior sales executive at Continental European in Auckland, told Newshub that sales of luxury cars such as Audi, BMW, Mercedes-Benz, Porsche and Range Rover hit record highs this year.
"I've been with Audi 20 years and the last six months have been the biggest I've seen - ever," Hoffman said.
Buyers of upper-end luxury cars are typically self-employed, retired or semi-retired baby boomers. Travelling abroad is part of their normal lifestyle. With borders closed since March, they've been forced to stay home - and find other ways to enjoy their money.
"When you're a baby boomer and you've got equity in houses, part of what you do every year is travel...they can't do that and they've been told to lock up," Hoffman explained.
"A reflex when they get let out [of lockdown], is to spend...there's a feel-good factor as well."
Record-low interest rates have provided meagre income on cash in the bank. This prompted many of the car dealership's clients to dial into the property market. The remainder was spent on cars, boats and other big-ticket items.
"Most of my client base own multiple houses and holiday homes at Omaha. Their housing assets would be $10 million and buying cars or changing over for $40,000 to $50,000 on top of the car they trade is nothing to them," Hoffman said.
"Nothing is forever and things will adjust but at the moment, I can't see things changing until travel gets back to normal and people spend on other things again."
Trade Me spokesperson Logan Mudge said that since COVID-19 lockdown, there's been a big jump in the number of people viewing and watching luxury cars listed in the $100,000 plus category.
"In November, watchlists on cars listed for $100,000 plus were up 33 percent year-on-year, while views were up 39 percent," Mudge said.
Also in November, the auction website also had a 41 percent increase in new listings, indicating supply as well as demand was higher than the same time last year.
"The most viewed luxury vehicle in November was a Ferrari 488 with an asking price of $408,000. It was viewed 63,265 times," Mudge added.
Motor Industry Association (MIA) monthly sales data for November shows total new car registrations were down 14.1 percent compared to November 2019, at 11,889.
Over the first eleven months of the year compared to the same period in 2019, total registrations were down 22.5 percent (32,364). This was partly due to the effects of COVID-19 restrictions affecting sales from March to May.
In the year to November 2020, there were 1412 new Audi registrations, down 119 compared to the first eleven months of 2019. The number of BMW registrations was 1472, down by 145 and the number of new Mercedes-Benz registrations was 2597, down by 442.
November registration data shows overall, Toyota was the most popular make of car with 19 percent market share, followed by Ford and Mitsubishi.