| Author | Message | ||
| Bruno (Originalsinner)
Intermediate Member Username: Originalsinner Post Number: 1082 Registered: 5-2002 |
As I am always buying Fcars. I noticed 308GTB carbed cars are getting stronger. People are starting to notice the production numbers and it being a carbed car and a coupe. Will it last. Got me. | ||
| Dr. J C928 (Attitude928)
New member Username: Attitude928 Post Number: 15 Registered: 11-2002 |
The original question of the thread had to do with the state of the late model Ferrari market. My hypothesis is that a 2003 car depreciates more rapidly over time than a 1970 car, because at least in the case of Cadillac & Ferrari, new car prices have been raised to 1.6 times 1970's prices when adjusted for inflation. Anyone with an old Kelley Blue book? A similar arguement unfortunately may be made for housing & stocks [1970 Dow: 839 (x 4.74 = 3977) vs 2003 Dow: 8485 (even without reinvested dividends)]. My sense is that technological advances (eg computers) initially result in a relative rise in prices (beyond inflation) but often the prices revert back to the inflation rate (ie CPI). This has not happened with new Caddys or new Ferraris. I agree with Whart that niches in the collectors market remain strong & are even strengthening. | ||
| wm hart (Whart)
Member Username: Whart Post Number: 948 Registered: 12-2001 |
Not all ferraris can be treated the same for market evaluation purposes. Take for example a '59 caddy convertible (the more limited eldo one if you want); calculate what that behemoth cost in 59 and what its worth today. Then, do the same thing for a 250 pf coupe. I'll bet the caddy appreciated more. Do the same numbers on a daytona vs. a 365 gtc/4. Among modern ferraris, the ones that have appreciated are the limited production ones, like the 288 GTO and, perhaps the f-40. I don't think the f-50 has really appreciated much, and after the Enzo excitement dies down, they may or may not fetch close to double their sticker, as they are reputed to now. If you figure the classic ferraris (that have appreciated significantly) cost 5-6 times the average price of a caddy or lincoln of the late 50's-early 60's, the same price ratio holds true today, eg. a 50 k luxury car or truck v. a 12 cyl. ferrari @ 250k dollars,but the 12 cyl. ferrari will probably not be worth 100 times its original price in 30 years. I'm not sure its just that there's more of them today; there are also alot more wealthy people than there were 30-40 years ago.While the prices of production ferraris will fluctuate with the economy, i haven't seen a serious dent in the high end collector's market; if anything, its just as healthy as before, if not more so. | ||
| P. Thomas (Ferrari_fanatic)
Junior Member Username: Ferrari_fanatic Post Number: 78 Registered: 4-2003 |
Dave, I think that you would also have to look at the demgraphics of F-car buyers. I do not know the statistic for the median age of an f-car owner , but in a macro sense, as you are well aware of, Baby Boomers represent 2/3 of the nations purchasing power. As we all get older, will our tastes/preferences remain the same??? If not will there be another generation to replace the attrition (not to be funny but we will ALL die sme day)of older f-car owners? Right now, I see a majority of the youth fully consumed in these rice rockets (acuras, hondas, etc). Are they going to be purchasing f-cars??? Porsche has expanded their market, you now see more and more females with p-cars. | ||
| Ken (Allyn)
Member Username: Allyn Post Number: 838 Registered: 10-2001 |
Dave, what's the world population increase every year? Granted it's not 10% and most are people who will not be buying Ferraris...but like pro sports, the field of potential players increases every year. I'm sure Ferrari is very aware of where their satuation point is and I'm confident current production is not overwhelming it. The fact Ferrari is finally making good cars from a mechanical standpoint shows they know they need to keep up with Porsche etc. to retain that market share which they seem to be doing. To avoid that satuation but increase production, they acquired Maserati. | ||
| Dave328GTB (Hardtop)
Member Username: Hardtop Post Number: 512 Registered: 1-2002 |
Hans reminded me of another comparison I heard which I believe was uttered by a Ferrari exec but I'm not sure. In any event, they said the aim was to keep the price of a starter Ferrari about the same as a starter home, and if you look, over the years that's been true most of the time with notable exceptions in the late 70's and late 80's, and late 90's. This fact may have been partly the cause of strong markets during those periods. Most of you have not addressed my original question, basically can the market for modern Ferraris absorb an 8-10% increase in supply year afte year? Dave | ||
| P. Thomas (Ferrari_fanatic)
Junior Member Username: Ferrari_fanatic Post Number: 77 Registered: 4-2003 |
Attitude, I tried the calculator, it does work. The manual way would be to continually mulitiply your annual inflation by your base dollar. In any event 110K for a 1998 Spider seems quite reasonable to me. | ||
| P. Thomas (Ferrari_fanatic)
Junior Member Username: Ferrari_fanatic Post Number: 76 Registered: 4-2003 |
Attiude, you are patrly correct in reading the CPI numbers.However the numbers compound (continue multiplying by 4.74% EVERY year). The 4.74 number that you cite should be reflected as a percentage, thus 1 dollar today adjusted for inflation would be 1.00 times 4.74% year 1, and 1.047 times 4.74%, etc. The CPI is a "basket of goods" that create an index. Relatively speaking, Ferrari prices really do not seem exorbitant right now relative to other cars. ie an Ecalade is $60K. That of course is with the exception of an F-40, F-50, Enzo etc. | ||
| Mark (Study)
Member Username: Study Post Number: 454 Registered: 10-2001 |
In the 80's when prices went crazy, the total number of Ferrari's was 50,000 cars? Now almost 15 years later, add 60,000 more cars. That's a lot. And add another 40,000 in the coming 10 years. Plus we all know they keep getting better and better and the old one's are kept for many years with few miles (never die). Will we ever see a period like the 80's again for Used Ferrari prices? | ||
| Horsefly (Arlie)
Intermediate Member Username: Arlie Post Number: 1022 Registered: 5-2002 |
The used classic Corvette market is full of idiots with more money than brains. It seems that the typical buyer willing to spend the fat money for a classic Corvette is the kind of guy who only dreamed of Vettes in high school, but didn't really know much about them. Fourty years later, they still don't know much about them except that they're cool and they want one and now their bank account is fat enough to "wheel the deal". The perfect sheep for the classic Vette "wolf" salesman. These uniformed buyers killed the Vette market for hobbyists. Also and even more importantly, all the dealers buy up every car they can find and then jack up the prices all across the board. Nothing sells except to the "more money than brains" type of buyer. The market stagnates. The only good deals out there are still sitting in the garage of the guy who bought the car in 1974. | ||
| Dr. J C928 (Attitude928)
New member Username: Attitude928 Post Number: 14 Registered: 11-2002 |
Click on http://minneapolisfed.org/Research/data/us/calc/ to make inflation adjusted dollar conversions (e.g. 1970 dollars into 2003 dollars is a factor of 4.74). Thus a 365 GT 2+2 that listed for $19,500 in 1970, cost 19,500 x 4.74 = $92,430 in 2003 dollars at that time. The 1970 Cadillac that cost $6500, cost 6400 x 4.74 = $30,336 in 2003 dollars. If a new 360 Modena cost $150,000 and a new top of the line Cadillac Seville STS costs $50,000, then both companies are now charging us 1.6 times as much. So in that sense your correct. However, the fellow who bought a new Ferrari or 3 Cadillacs would spend almost $60,000 more compared with the ?good ole days. This $60,000 provides plenty of room for rapid depreciation based on historical value (just like the stock market). | ||
| Hans E. Hansen (4re_gt4)
Intermediate Member Username: 4re_gt4 Post Number: 1144 Registered: 4-2002 |
EFWUN: You're Ferrari/Caddy comparison reminds me of a rule of thumb that I've always used in comparing NEW car prices. This has pretty much held the test of time: 1 new Caddy = 2 full size Chevys. 1 new Corvette = 3 full size Chevys. 1 new V8 Ferrari = 3 new Corvettes. 1 new V12 Ferrari = 5 new Corvettes. An approximation, and influenced by the exact models in question as well as options, but this has been a good approximation for decades. Where it's interesting is in comparing used prices. For example, compare an early 80s Ferrari with an 80s Corvette, with an 80s Chevy, with an 80s Caddy, and see how they compare to the "New" formula. Inflation adjusted or not, the F-car doesn't do too bad. | ||
| EFWUN (Efwun)
Member Username: Efwun Post Number: 546 Registered: 2-2003 |
Attitude, I'd question your measure of inflation. In 1970, my dad paid Chinetti $19,800 for a 365 2+2, #13149GT. At that same time, if memory serves, the ubiquitous Caddy Fleetwood Brougham was around $6,500. His friends all favored him with, "Jeeez, jack, you coulda got THREE cadillacs for that!!" Considering the top of the line Caddy today is a little over $50K (??) I'm thinking the 2+2 was equivalent to $150K plus. Similarly, Daytonas were around $22K two years later. The market IS unstable on late model Ferraris currently, leading lots of wholesalers to make ridiculous offers for cars because they simply don't want to own them IF prices remain depressed. I'd bet (and I'm no economist) that if the DOW reached 9K again, the Ferrari market would pick up substantially. I think you have people on the margins (not the mega guys with 12 different Ferraris, and not the little guys like me who spent the swimming pool money on the '01 550) not spending discretionary money because of market-induced fear. | ||
| Dr. J C928 (Attitude928)
New member Username: Attitude928 Post Number: 13 Registered: 11-2002 |
The rising inflation adjusted prices of Ferraris over time is another cause for late model depreciation (yes, the cars are better, but so are everyone elses) In inflation adjusted 2003 dollars, cars like the 250 PF coupe, 330 GT 2+2, 330 GTC, 308 GT4 cost between $75,000-$85,000. The Daytona, 308GTS's & 328GTS's were up in the $100,000-$110,000 range. 400s & 412s in the 140s. Boxers in the upper 100s-low 200s. Yes, the rich get richer, but not at that rate. | ||
| James P. Smith (Tigermilk)
Junior Member Username: Tigermilk Post Number: 115 Registered: 7-2001 |
I'll be driving around town with my wife and she'll spot an SC430, Boxster, Z3, S2000, or some other flavor of the month and say how she'd like one of those. I always steer her away and tell her it'll depreciate like mad. Fortunately she loves Vipers so I'm trying to convince her we need a mid/late 90s Viper. Those cars have just about hit their lower limit and I think they'd a great buy and great ride. BTW, was getting in my 308 last week and some kid comes by and says how nice the car is. He asks, "Is that a Mustang." | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 1076 Registered: 7-2002 |
I'm glad Ferrari's aren't common even if the older models aren't terribly expensive. I love that mystique and the avg joe doesn't know a 308 from a 360. They just see Ferrari and go WOW! | ||
| Eric Eiland (Eric308gtsiqv)
Member Username: Eric308gtsiqv Post Number: 756 Registered: 11-2001 |
Like Jim Schad alluded to...it's amazing what people are spending these days for older American cars. Was walking around the Daytona speedway spring carshow recently, and was shocked to see 50's thru 80's American cars (some of which were very poor condition) selling for $25k and up. In fact, I found out later that my dad ended up purchasing a '57 2-door Bellair for around $40k! This is approaching TR territory here  . Of course, the maintenance would probably be vastly different cost-wise. | ||
| Craig A (Milo)
New member Username: Milo Post Number: 13 Registered: 4-2003 |
Well said Jim, In about 3 weeks of ownership I've had no less than 10 people suggest that the computer business must be great and that I must have money coming out the wahzoo. In the meantime I'm sitting there looking at their $50,000 Lexus SUV. Simple economics. I see it as supply and demand. I was a victim of this simple rule with my Honda S2000. I bought when supply was low and demand was high and hence I paid a premium. I sold when supply was high and demand was low and hence I sucked up the depreciation costs. But all is well I now have a Ferrari. The 348ts (what I own) was produced in large numbers by Ferrari standards. I figure there is still some depreciation left in this model. But I figure the numbers (supply) of quality cars will decline through attrition (wrecks, etcs.) and hopefully in about 10-20 years it will be labeled a classic. With all this in mind I think prices will increase or at least level out at a decent price in the future. Side note: I'm I the only one who thinks Luxury SUV makes no sense? | ||
| Mfennell70 (Mfennell70)
Junior Member Username: Mfennell70 Post Number: 117 Registered: 7-2001 |
The old depreciation vs. ownership cost issue. My S4s and ffr cobra cost about the same as a new Hummer H2. 2 years from now, that h2 will have depreciated 20k and my 2 cars maybe 5k. Hell, maybe less. Ignoring "fun money" I throw at them, maintenance will be another $5k. So I'm $10k ahead of the "me too" H2 owner. BUT the H2 owner has less risk than I do. If anything goes wrong, he hands it to the dealer and says "fix it". No suprises. Owning a Lotus or Ferrari is like shorting a stock - your downside risk is unlimited. OK, exaggeration, but it sure seems that way some days. :-) | ||
| Jordan Witherspoon (Jordan747_400)
Member Username: Jordan747_400 Post Number: 781 Registered: 12-2002 |
LOL Well said Jim and Vince. | ||
| Vincent (Vincent348)
Junior Member Username: Vincent348 Post Number: 85 Registered: 4-2003 |
And people say: "but it's so impractical" then you can watch them take 2 hours parralell parking the "titanic". Who's to say what's not practical? Driving can be a lot of fun, and it's easier to park than my duelie. | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 1062 Registered: 7-2002 |
I was telling my wife the same scenario yesterday as we passed a $45k pickup truck. Nobody says a word to that guy, but you pull up in a 328 and people think you must be rich. I mean it is a luxury and not a SUV, but still... | ||
| Hans E. Hansen (4re_gt4)
Intermediate Member Username: 4re_gt4 Post Number: 1132 Registered: 4-2002 |
1) I paid $100K for my GT4. 2) Misconception of maintenance cost?? It's all accurate. | ||
| Rob Lay (Rob328gts)
Board Administrator Username: Rob328gts Post Number: 4502 Registered: 12-2000 |
I think the "market" is untap'ed. This is based on two assumptions... 1) Misconceptions of used car prices. How many times do people think your 308 is worth $100k? 2) Misconceptions of used car maintenance prices and headaches. What's the second question they ask after how much is it worth? An informed market would increase the demand, but I'm not sure I like that idea. I kinda like it being our little secret that these cars don't cost a lot to own or maintain. The cheaper these sale for the more I can buy. I'm a lifetime "keeper" of these cars. I hope never to sell a Ferrari. Every Ferrari I've bought so far I think I can be happy with the rest of my life. There's still others on my list though. | ||
| Hans E. Hansen (4re_gt4)
Intermediate Member Username: 4re_gt4 Post Number: 1130 Registered: 4-2002 |
The KEY to selling high $$$$$ cars (or anything else for that matter) is to have negligible depreciation. Makes the actual cost of driving very low. High entry price keeps out the riff-raff (just kidding, but I think you get my drift), but good resale value keeps the demand up. I've watched the Corvette market for many years. It has cycled thru high and low resale several times over the last few decades. When the used market dries up, so do the orders for new cars. | ||
| Dave328GTB (Hardtop)
Member Username: Hardtop Post Number: 510 Registered: 1-2002 |
There have been several recent threads discussing (or more often lamenting) the state of the late model Ferrari market. I don't own one myself, so I have no axe to grind. Markets always fascinate me though, so I spend too much time thinking about them. Any way, here goes. Is Ferrari making too many cars? At first thought, it sounds preposterous because wait lists are still very long, at least in the US. But Ferrari has made only about 100K cars lifetime. With production at 4-5K units per year, that is an increase of 4-5% per year in supply. If you consider the late model (like after 1990) as a separate market, then production increases the supply nearly 10% per year. When the economy is hot, no problem. But the economy is no longer hot and the aftermarket is falling hard. You can already buy new 12 cylinder cars less than MSRP. The 8 cylinder still has a long wait list, but how many buyers merely hope to resell for a nice profit? When the aftermarket no longer offers profits, will the list dwindle quickly? At current production rates, there needs to be more than 10% increase each year of money pouring into the late model market. Is this sustainable? Food for thought and I look forward to your comments. Dave |