Ferrari curbs UK allocations amid residual-value pressures caused by non-dom tax overhaul
In a striking turn for the British luxury auto market, Ferrari has begun cutting the number of cars allocated to the UK in response to weakening residual values and shifting demand dynamics following the government’s decision to abolish non-domicile tax status. Financial Times+1
The move, confirmed by CEO Benedetto Vigna in an interview with the Financial Times, is a structural recalibration rather than a short-term tactical retreat. He disclosed that the carmaker had begun to significantly limit allocations to the UK about six months ago, with the goal of shoring up used-car valuations — a cornerstone of its leasing and financing ecosystem. Financial Times
Tax reform and client flight
At the heart of the disruption is the UK government’s decision, implemented in April 2025, to end the favourable non-dom tax regime. Under that status, certain wealthy residents who declared that their long-term domicile lay outside the UK enjoyed lighter tax burdens on foreign-sourced income. With non-dom abolished and higher duties on the affluent introduced, some wealthy individuals have reportedly relocated, eroding Ferrari’s historical UK buyer base. Financial Times+1
“Some people are getting out of that country for tax reasons,” Vigna noted, stressing that the decision to cut supply reflected broader market signals rather than knee-jerk reaction. Financial Times The firm sees residual values as an early barometer: once those slide, financing costs rise, lease deals become less attractive, and buyer confidence wanes.
Residual value tumble
The impact is already measurable across key Ferrari models. Data from Auto Trader indicates that from January to October 2025, the Purosangue model saw its residual value fall by 12.2%, while the SF90 Stradale dropped by 6.6%. Financial Times+1
Given that a large share of luxury sports cars are acquired via leases or similar financing, residual values directly determine the affordability of monthly payments — weaker used prices force upfront or monthly costs higher, squeezing demand. In markets like the UK, where right-hand drive models hold limited appeal abroad, the depreciation risk is magnified further. Financial Times
Vigna has also stressed that tax policy alone doesn’t explain the full picture. He pointed out layering effects: bespoke customisation of Ferraris (multiple unique options) makes resale harder, and right-hand drive cars often can’t be easily moved into left-driven markets during lease turn-in. Financial Times
Scarcity management and margin vigilance
Ferrari’s strategy has long been built on scarcity and exclusivity — carefully controlled production helps maintain high margins and a premium resale market. Even in the face of this UK contraction, that logic remains central. The company has signaled it will prioritize pricing discipline over volume growth, particularly in markets under pressure. Financial Times+1
Still, the firm is confronting headwinds. Its shares have dipped c. 17 % following announcements of flat profit margins over the next five years, as Ferrari braces for the challenges of hybrid and EV expansion. Financial Times Investors are probing whether the brand can maintain its historical resilience in residual value across geographies.
Implications for the UK luxury car market
Ferrari’s recalibration sends ripples across the UK supercar space. The reduction in allocation suggests that ultra-premium brands may adopt more cautious volume strategies, interpreting the UK as a riskier territory amid capital outflow and tax headwinds. As residual value erosion becomes visible, other marques may follow suit in recalibrating their local strategies.
For UK dealers and clients, supply constraints will intensify the scarcity premium — but also magnify downside risk for owners when clearing a used Ferrari. Dealers may be wary of holding higher inventory at risk of depreciation. And prospective buyers reliant on leasing or financing may face steeper terms.
The broader narrative is a reminder for sectors targeting high-net-worth consumers: tax policy and domicile regimes matter deeply for demand in luxury markets. As the UK signals it will target the wealthy more directly in upcoming Budgets, luxury goods firms across the board will be assessing how structural demand shifts might reshape their foothold in the country.
Outlook
Ferrari’s decision to scale back UK supply is not a retreat but a measured rebalancing. By throttling allocations, the company aims to defend its franchise’s used-car stability in a market increasingly squeezed by tax policy shifts and capital migration. The test now lies in whether residual values can stabilise, and whether the UK continues to justify its place in Ferrari’s premium portfolio.
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