My calculations for actual ownership cost of a $130k F430

First, let me say that I am not trying to make buying a Ferrari only about the financials. This is just a fun post to share some useful info I've collected from the threads here, and an opportunity for others to correct any mistaken assumptions on my part. I realize buying a Ferrari is about emotions, but your $ needs to be able to support it still. The following is a writeup for my estimations on the cost of owning a 2005/2006 F430 F1, purchased now with cash at $130k with 8k existing miles.

Basics/Estimations:

Purchase Price: $130k
Sales Tax (7%): $9,100 one time cost (adjust as needed for you)
Annual Miles Driven: 4,000 annual, for 5 years = 20,000. (This estimation does not include expenses/maintenance associated with track use; If you are concerned about financials and want to track a car, then buy a Porsche, not a Ferrari (or better, buy both!)).
5 year holding period depreciation: Sale with 28k miles in 2016 = $50k estimated depreciation, sale at $80k. This is just a rough guess based on where a current 11 year old (2000) 360 is priced.
Loan Costs: Pay in cash, so none here. If you finance/lease, remember to add these in.
Annual registration fees: None for me in Ohio, but if you are in CA or another state that does this, I think it could be as high as $2k annually, which would add over $10k to your 5 year cost. Ouch.

Maintenance:

Clutch: Est. life of 15k miles, one replacement needed at $6,500
Tires: Est. life of 12,000 miles, two full replacements over ownership costing $3,000
Annual Service/fluids: Oil/filter and brake fluid: Est. $1,000 annual, perhaps can do DIY if so inclined for $300. Total = $5,000 over 5 years.
Front Brake pads (steel brakes, NOT CCB): Not too sure about this, but I thought I've seen that front pads can be done for $1k? If so, probably need at least new front pads over course of ownership.
Belts: F430 is chain driven, so no cost here (compared to $3k per 3 years for 360 I think; In the big picture not that big of a deal when comparing the two models).
Misc annual maintenance: $400 annually planned, $2,000 cost over 5 years - This includes things like power window motors, alignment, ect.

Repairs:

*I'm not including any of the repairs costs in the cost of ownership as they cannot be planned for. You may have no problem, or you may have a significant one, but a $15k side fund for repairs is advised.

F1 Pump: Not common problem, but I've seen numbers from $3.5k to $11k depending on the acutators as well.

Full Brake or Rotor Replacement: For street driving, I've read all you really need is front pads. While CCM brakes seem to cost about $35,000 for all four corners, I think steel is perhaps $7k? I'm not too sure about the details here, but this will mostly depend on if you track the car (in which case maintenance will be much higher too).

What else to add here as considerations of possible/likely repairs during 5 years of ownership?


Insurance:

Assuming this is your 3rd car with 4k miles driven annually: $750 annual - total over 5 years = $3,750 . This could be higher for some driver's, but it is what Geico quoted me.

Fuel:

20,000 miles at an average of (hopefully!) $3 per gallon at 15mpg average = $4,000 over 5 years.

Opportunity Cost:

This isn't going to be included in the total either, since it varies so much from person to person, but is still a significant financial impact considering the six figure price tag. In fact, opportunity cost is perhaps the main reason I personally am likely to hold off on buying until next spring, considering I have a extremely high opportunity cost of capital right now which will likely be much lower next year.

Total:

In total, the costs over the course of 5 years, ignoring unexpected repairs and opportunity cost of your money, as well as ignoring loan/lease costs and annual registration fees if your state requires this, total: $50k (depreciation) + $9.1k (sales tax) + $6.5k (clutch) + $3k (2 sets tires) + $5k (annual service) + $1k (front brake pads) + Misc. maintenance ($2k) + $3,750 (insurance) + $4k fuel = $84,350.

So $84,350 of actual costs to own a $130k F430 for 5 years with 4k annual miles driven is my estimation. Again, keep in mind you should have an extra $15k fund for potential major repairs, but these seem to be rare on the F430 model. Note also that at only 5% return on your cash, opportunity cost of $130k over 5 years would add over $32,500 to your real cost.

This might hurt then: 20k miles driven at $84,350 cost = ~$4.25 per mile. Assuming my numbers are close, and how this ignores opportunity cost and major repairs, and is on a 6 year old Ferrari, I think the "$1 per mile ownership cost" is way off. So, driving 15 miles each way to dinner; that'll cost you $127.50 before you pay for your dinner. . Of course, this also ignores the "artwork value" of staring in awe of your Ferrari while parked.

I look forward to comments, and will be happy to tweak things if my assumptions are mistaken or I've left out major items. I hope this gives a decent picture to those wondering if "I can afford a F430." Plan on $85k-$120k of overall costs including repairs/opportunity cost right now. Personally, I think its definately worth it, and am just waiting for my own optimal timing to match up, but in no case do I think I'll be able to wait longer than next spring .

 

I just added some last minute stuff but was cut off by the 60 minute editing window. I added fuel cost data, and was cutoff before I could note that the fuel cost is not really incremental since you'll likely spend a similar amount driving a different vehicle instead.

I also added some important "cost per mile" analysis. The cost of those 20k miles totals about $4.25 per mile driven with my numbers, and that is ignoring opportunity cost (~30k-$50k perhaps depending on your own rate) and major repair bills (perhaps $10k-$15k). Adding those in, and its very easy to see how realistically possible it is to hit an average ownership cost of $7 per mile for a 6 year old Ferrari. I don't think you'd want to see what these numbers would be like when buying a new Ferrari with a much steaper depreciation curve, think 430 Scud! But, as I also mentioned, this is focusing costs and value only when the car is in drive, and significant value should be placed on staring at the thing with a glass of wine and admiring its beauty, or starting it so your friend can hear the engine and exhaust note, ect.

 

I started with a $40k depreciation figure, but given what we've seen in the Ferrari world lately depreciation wise, and as the 458's supply increases and price drops, I think that 11 year old F430's with 28k miles in 2016 will likely be worth what thier current 1999-2000 360's with such miles are worth, which is currently $75-$85k probably. If the economy is stronger, depreciation could be less, but I wouldnt' count on it in a financial analysis.

You could get a 2005 with 17-20k miles on it now for perhaps $115-$120k out the door, but that means you are fishing from the current bottom of the barrel and perhaps increasing your chance of a major repair cost (which was not added in). More importantly, you should get the perfect build Ferrari that you want, and likely the cheapest ones have the wrong colors, or seat wear, or something else. $130k after negotiation should be able to get you the exact car you want with lower miles, and in the long run, paying $10k more upfront for 10k less miles and the perfectly built car for you, is absolutely worth it in my opinion. My perfect build is a rossa corsa F1, black daytonas with red stitching, yellow calipers and a yellow tach. I'm flexible on the calipers/tach, but not exterior/interior color or seat type. I don't care if the car has CCB so long as the purchase price isn't a lot higher becuase I like the way they look, and for my street use, should not wear out at all. If I decide to track and manage to kill all four, I'll not be paying $35k for 4 new corners, but would switch to steel brakes at that time (can only be done on base F430, not 16m or Scud).

I am 90% sure I won't get a 360, but I might do the same analysis with a 360 too. The biggest difference will be opportunity cost of capital ($40k cheaper), lower depreciation (although still could be $25-$30k here I think in 2016) and potentially a higher chance of a major repair needed. I love the way the 360 looks, but my problem is that to get close to exactly what I want, the sticker of available ones is closer to $100k still, and I'm willing to pay $30k more to get the F430 considering the better F1 system, extra 90hp, no belt maintenance, and updated interior. As I mentioned, belts are not that big of deal, and only add $3k cost every 3 years, so you could get away with only 1 belt change in 5 years of ownership.

 

Note my numbers only include $1k for front pad replacments and assuming steel rotors. Everything I've read says CCB's should last pretty much as long as the car if its just street driving and not seriously abused. I was just mentioning the cost of CCB's in case someone was planning on tracking the car, since replacement of those puppies could cost 1/3 as much as the car is worth! But again, with the base f430 you have the option of switching to a steel brake setup for $8k (close $ wise?).

 

Good points. From a financial analysis, you should value your resale as $0 and write off the entire purchase price in your accounting. If you can be comfortable doing that, then you are financially ready to buy a Ferrari.

I don't plan on ever selling the F430 I buy, just like I don't ever plan on selling the 911 turbo I bought last May, or the 04 G35 coupe I bought in 2008. But, I think the reality is that most people will sell for one reason or another. I chose 5 years as a compromise.

As you hold the car longer, the upfront costs like sales tax (and if you are in CA and pay 10% sales tax, this is significant) will smooth out. Depreciation will also slow.

 

No MBA, but a BBA with four business majors (finance, econ, business law, MIS), and a JD from OSU as well. Considered a joint MBA/JD, but the MBA was just redundant in my opinion. Of course, after all that and graduation from law school last May, I'm self employed and have no interest of working for someone else anyway. Hence the free time to write this post, and not to say that I didn't enjoy my college years .

needspeed, note I carefully mentioned at the beginning of the post that buying an F car is not just about finances at all. You need the passion and emotion too! I think av2 said it nicely that "if you can afford it, its definately worth it." . Trust me, I cannot wait until I buy one, but I don't want to rush the process just becuase I can afford it and am enjoying the anticipation stage. After all, I just bought my first exotic (modded 996tt) 9 months ago and am not even familiar with it yet (what a fun car though!).

SCEye, I was actually in the process of including the $32.5k opportunity cost at 5% as an additional statistic, but the 1 hour editing time limit cut me off. I did mention it in my post right after, however. The main reason I excluded it in the the first place is that its too much of a variable for a generalized estimation. Marginal tax rates and dramatically varying differences in actual realized profits will vary too much from person to person to estimate for the masses. Hell, you could invest the $130k in stocks and lose 1/2 of it in 5 years and be better off financially (and have a hell of a lot more fun) in a F430 anyway. My own opportunity cost is perhaps 40% APY or more currently, but I know that doesn't relate to most and is also a fragile/temporary opportunity for my own investments (think contango/backwardation in futures/PM/commodities niche opportunities, but otherwise I can't share details, gotta pay my own bills, sorry ).

 

I have asked several folks at 2 different Ferrari Dealerships (both service guys and salesmen) about the cost of a new clutch for a F430 (or 360 for that matter since its the same clutch), and they have said its around $6500. I've also seen that number repeated here at Fchat. I'm sure you can find an indy place to do it cheaper. Let me know where you've found it cheaper.

As for clutch length, plenty of people say 20k to 25k miles is very possible if you drive more on highways and also do it right (no creap, avoid hills/reversing up a hill if possible, ect). I don't think driving the car hard necessarily speeds up clutch wear too much (at least with F1), but city use will kill the clutch faster than if most your driving is more highway focused. In the city you can do 20 starts/stops in 3 miles, or on the highway you can do 20 miles with no starts or stops all in the same gear. Big difference. My driving would be a mix of both, so perhaps 15k is low, but I wouldn't expect to get over 20k unless you are very careful, avoid hills, and do more highway driving. Regardless, the point is moot b/c if you buy a car with 8k miles and sell it before 30k miles, you are either going to have to replace the clutch yourself or sell the car cheaper b/c it will need a new clutch at 30k miles anyway.

 

I wrote a simple compounding interest computer program back sophmore year in high school to calculate retirement worth of X at Y growth, where you could plug in whatever you wanted for X as the initial investment and Y as the constant growth rate. Compounding time was set to 45 years since I was 16 at the time and was expecting retirement around age 60. It was a simple program, but basically it told me that I really should not be buying that movie ticket b/c if I only invested that money for 45 years, I've have enough extra money for a BMW. . Its a true phenomonen, and if I recall correctly, Albert Einstein called compounding interest the "9th wonder of the world."

Keep in mind that also ignores inflation. 3% increase over 45 years would pretty much be wiped out by 3% inflation during that time, so your purchasing power hasn't increased at all. Also, there is no guarantee anyone will live until age 60, and even if so, owning a Ferrari at age 60 is not like doing so when younger. One of the best line's I've read from someone on Ferrari Chat is something to the effect of "enjoy your money when you can, becuase money is a renewable resource but time is not."