The 550 market

Musings on the 550 market.

Well, I’ve been casually exploring the market from the seller’s point of view. Haven’t really made a decision to sell but have had some not-so-serious conversations with private individuals as well as with the car dealerships in terms of trade in value.

Here are a few of my perceptions and I’d be interested in people’s (preferably somewhat informed) opinions.

1. The FML prices are pretty much in LaLa Land. While I recognize these are asking prices, they are almost uniformly 15-25% higher than what the cars are selling for on either the private or wholesale, eg dealer market.

2. For a very clean but not special car with low mileages (<15K) without a recent major, the dealer will offer 80-87, depending on the year. Of course, if you’re doing a trade, the pass-through on sales tax, if your state is one of the ones that does that, can increase the effective price that you get by 4-7.5%.

For example, my specific car, a no-stories, stock 1997 red/tan with all records, books, yearly maintenance, etc, in near conours condition but due for a major, will fetch between 80-82K on the wholesale side. With the savings in sales tax, that translates to $85,600.00. I could have the major done but I might only recover 80% of what I put into that last service.

3. For a private sale, the price can vary more widely, depending upon a host of variables, but can be anywhere from 10-30K above what you will get wholesale.

Comments/opinions?

 

Now is a good time to be selling red/tan. You didn't say how many miles, but I would guess retail is going to top out at $100K. I have been watching a nice nero '99 at Ferrari of SF. 27K miles, carbon fiber seats, red calipers, tubi. Was there for months at $109K. A couple of weeks ago they INCREASED the price to $119K. I have lost interest. A grigio/red '99 with 15K just sold for $93K on ebay and Michael Mann's nero/little mermaid car with 13K miles is currently bid up to $85K.

 

Doesn't that car have custom rain gutters?
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FML is a lagging average of advertised (multiple sources) asking prices (dominated by dealers). A 15-25% delta is not surprising. Based upon discussions with dealers and brokers a few months ago, my 550 would be $95-100K wholesale, sell for $115-120K with an asking price around $125K.

 

I think looking at having the major done may be the difference of someone being interested or not. It seems there are many Fcar want-to-be's that are down right sceeered of having anything done to these things. And don't have the skill or guts to try it on their own.

Your car sounds like one I'd consider. you know going in its on the verge. It's a negotiating point.

 

You are correct that FML is dominated by dealers seeking 20% margins and lala asking prices. Just walk up to one of then with an identical car and ask what they will give you for it.

PM me and I will send you my model.

 

I'm no coward, but I'd prefer a car with a fairly recent (12-24 mos) major. It's kind of a crapshoot otherwise. I would hate to find a nice car where the PPI reveals a bunch of issues and the seller's only response is, "I told you it's due for a service."

Just my 2 lire.

 

my last major by a F-dealership wasn't quite done to specs and they should have done more.

I would rather know someone, like say on Fchat etc., who took good care of the car, and they don't want to shell out the money for a major, then GREAT!

it's to be negotiated down, and I would rather have MY mech. do the major and do it to my specs. like a RD or FofSF or such.

that would be the best.

why Brad [or someone] would raise the price could be a lot of factors.
- events coming up, and it's Summer: BUY
- did some work on it to make it sell better: I remember they had a great 575M couple months back and it needed front and rear leather fixing: done, and it sold I believe.
- FofSF is a FACTORY dealership...they can play sometimes, but sometimes set the marked pace from a factory perception: always seem to be a bit at top 'blue' but you get what you pay for and they will make it right:

should talk to them: no, not a dealer or boosting the seller, just know them somewhat and would easily deal with them again.

 

I've been shopping for a 550 for a couple of months (See my post "Looking for a 550" for details) and did about 6 months research and market watching before that. Additional sources for pricing info are Cavalino Magazine, which publishes a pricing index of every Fcar model ever produced in every quarterly issue. They state that it's a combination of asking and actual selling prices. In the current issue they report that 550s are steadily declining with a top price of $100k for a `97 - `01 550 - That's hard to believe `cause every car that I see that I like wants much more - like closer to $130k.

The other source is Forza Magazine and I think their report, which was about 3 issues back was more subjective than scientific, but pegged the price range to be between $80k and $120k (which sounds more realistic).

As far as the service goes, there are 2 types of buyers...Those who have owned Fcars in the past and have been exposed to maintenance cost, have maintence contacts and are generally aware the Ferrari experience (me, for instance) and the first time buyer who can range from being well versed in Fcars to someone who thinks they're buying a Corvette. My suggestion is to have 2 asking prices...One with the major and the other without and let the buyer decide.

 

Ferrari market value discussions are fascinating.......

Can we once and for all together agree that Cavallino, Forza, FML and auction results do not indicate the wholesale, retail or private party value of a given car.......stop wishing otherwise.......gee whiz. Why do some Ferrari buyers and sellers expect market values to be quoted like stocks, bonds and commodities.......and why would anyone expect the Ferrari market to be any more transparent or efficient than the market for real estate, airplanes, watches, etc.

The other thing that stuns me is the dismay expressed that a car dealer might be making 20% gross margins on their inventory. In my business, we routinely sell products with 55-80% gross margins. Ever stop to think about Starbucks gross margins.......will you stop buying coffee now?

How about.....buy them, drive them, enjoy them...it can be simple if you choose.

 

There are two reasons for the steady decline in value of 550's: The 575 and the 599. If you think that's bad, wait until the successor to the 430 comes out. 360's , given the huge production run, will drop like rocks.

 

I had a 550 for many years and absolutely loved that car. I sold it over a year ago in anticipation of my 599 - I had the first one in Asia. I was never tempted by the 575 - not even the HGTC. Here is my take on the market:

1. 430/430 successor is irrelevant to the 12 cylinder GT market
2. 575 was not a quantum leap over the 550 and there were many people, like me, who preferred a modified 550 to a 575. Impact on 550 market was negligible
3. 599 makes the 550 a classic car. Sad but true - please don't flame me too badly! The technology leap is massive. But so is the price increase. I don't think that many people held a 550 until the 599 came out (I was simply heavily attached to my 550-it is still my avatar). I don't think the 599 necessarily had a negative effect on the 550
4. As a car gets to the 10 year old range the universe of potential buyers is rather smaller. The car is 2 generations out of date but is not yet a collectible. Maintenance costs remain rather high, particularly as a % of value. 550 is stuck in this space
5. Economy has been fantastic for a long time so many potential buyers are higher in the food chain than might normally be the case. This fuels the bizarre premiums for new models
6. I think the 355 is stuck in the same segment as the 550 - just a different pool of buyers - but same general dynamic

I suspect that 550 will continue to drift down as the above has not played out yet. Just MVHO!

 

Absolutely agree on almost all points but particularly point 3 and 4 sum up the 550's position at the moment. The "problem" is that the 550 is a big V12 bruiser with running and maintenance costs to match. 5 1/2 years ago it was the top dog Ferrari - the bees knees. For people that can afford this kind of car new (i.e. the 599 crowd) this car is now too old and dated. For the people that are looking for a first Ferrari, they are too expensive to run but not too buy. Also, for a first F most people look for a sporty type, not a GT.

This means that there are relatively few people in the market for these, and that shows in the resale value.

Of course, one person's problem is another's upside and for me the 550 is an absolute steal at the moment. I could not hope to be able to afford a 599 but can afford a 550 and I'm looking forward to getting to know mine - picking it up coming Tuesday.

What struck me when shopping around is that most 550's tend to be on the market for a LONG time. I've seen beautiful, well priced examples, on sale for more than 6 months. So be prepared to take a hit if you want to get rid of it.


Onno

 

The other thing is that there are a lot of choices now if one has 550/575 money. The Astons are dropping like rocks too, for example. Potential first time Ferrari buyers have to determine if they want a 10 year old design versus a two year old design, and some may not be able to tell the difference.

 

I think this an interesting discussion and probably could be revisited (updated) quarterly or even more frequently. I agree FML is not a barometer of sales, but it doesn't pretend to be (although obviously the title implies that the publication concerns the "market" for Ferraris). What is useful is direct personal experience.

I watch eBay for signs of where the market is heading, but I have come to realize that eBay is pretty unreliable too. Here in San Diego, the prices seem to be maintaining steady at $90-$120k for credible 550s. I have been toying with the idea of selling my small collection of CA smog-exempt Italians and consolidating in one modern 12-er. I think the 550 has such beautiful proportions and balanced lines that it will be fresh and contemporary for a long time to come.

It's natural not to want to buy if you perceive the market is declining, but if you intend to hold on to the car for awhile and enjoy it, the downside is marginal and there may be upside if the car turns around and appreciates (like the Boxers). I also wonder if there is any regional variation to the market for larger-volume production F cars (note, not "mass-produced")? Is a 550 cheaper in Chicago than San Diego b/c you likely won't drive it for several months each year? Or, are they more expensive b/c they've seen less use?

Does the conventional wisdom on early cars vs. later production effect pricing? I spoke with a local gentleman who was selling a very nice-looking, well-documented, blue '97 550 for either $90 or $95k, but he seemed quite put off when I inquired how firm he was on his price (I just thought his price was high for the year and equipment).

These are just some random thoughts, but I am interested in hearing from others who may be more knowledgeable as to their observations, predictions, opinions, etc.

 

Some interesting points have been made in the discussion. I do think it's a buyer's market right now as the cars, while they will drift slowly down over the next 10 years, have already experienced the bulk of their depreciation. SO, for the right buyer who knows and appreciates the cars, and has a strong enough stomach to tolerate the yearly maintenance costs of a V-12 Ferrari, it will be a great car to own.

I've been driving a lot of cars this past week and have to tell you, the 550 impresses me even more considering that "it's two generations out of date." The tractability of the engine, the gobs of torque across the rpm range, the handling and sense of road feel all keep it near the top of the list in terms of superb GT road cars that still have a sporty feel.

It stands up VERY well to most of the modern Porsches, Aston-Martins, Bentley, Mercedes and BMW. Each of those cars have their strong points but for all around enjoyment and sense of driving excitement, the 10 year old Maranello is right up there- at least IMHO.

A 10 year old car is now well sorted out so all the little bits and pieces that were questionably engineered have now been replaced and it should be even more dependable, if one keeps up with hoses, lines and other parts that go through a normal aging process.

I don't expect the car to increase in value for many years at which time I may or may not own it. But I certainly didn't buy it as an appreciating asset: I bought it to enjoy and look on it as a moving piece of art that is immensely satisfying to drive- and drive hard. In that respect, it's never disappointed me.

I was initially thinking about putting it on the market because my wife and I have talked about potentially simplifying our lives, now that the kids are out of the house- and having 6-7 cars around does not really lend itself to simplification. But my guess is that after exploring the market and seeing what else there is to drive in terms of replacing it, I will hold onto the F-car until the right person comes along who really wants the car and knows exactly what s/he is getting into. We probably will meet at a car event or they will have heard of the car through our local network of carguys. If that doesn't happen.....well, it will be no hardship to drive it for (hopefully) years to come.

I now have confirmed the numbers that the dealers will give, getting firm offers from multiple brokers.: these cars are fetching from 80-87K depending upon the year and when the major was done. What the dealers/private sellers get is of course, dictated by the local market and excitement of the moment.

 

AGREED!

Newer cars are as much as $10K over your 1997 in both the wholesale and retail markets.

 

the 550/575 is the best looking car ferrari has produced since the early 70's, imho. 20-50 years from now it will stand out.

i would love to buy a nice car 85-90k range but i am scared ****less of maint costs and some sort of big unexpected repair. i read sheehan articles (and granted it was "juiced") but many see that and keep legit potential buyers who can afford the cars from actually buying them.

 

Henryr, if you want to know more about 550 costs, I can forward you my XL spreadsheet. I have done a lot of research over the last 6 months to ease my mind that I could actually afford one of these and I am convinced I've got a very close approximation to actual costs (and yes, they are pretty scary, even with the slow depreciation curve now, but Sheehan's article was nowhere near as realistic as my spreadsheet). Of course, it's based on the Euro , Dutch prices and SI units (litres, kms) but you should be able to amend it with a bit of effort.

PM me if interested.


Onno

 

Compared to an F355 or 360, the cost a major service on a 550 is lower because you don't have to pull the motor (actually, you don't pull the motor on a 360 but changing the belts through an access hole in the bulkhead isn't that much easier and is still labor intensive).

I think long term the 550 will provide better durability and lower over all service cost as I have heard from many Fcar mechanics and FNA insiders that the 550 is the most reliable car of that generation.

 

I would someday love to own a 599 but not at 200k over sticker.
I've imagined driving to my local Ferrari dealer in my 4000 mile 575
with 350k cash- NOT !!! Who amongst us is convinced that a 599
is worth that ? This is why I've never understood the "drop" in market value
for 550/575's.Logically one might assume they'd being going up not down.
God bless the 599 owner cause you must have money to burn and an ego
beyond belief.Just my 2 cents

 

I assume you mean for the owner buying at current market price. For the lucky few that can buy a 599 at MSRP, it is the opposite of "money to burn". They get to buy an incredible car, drive it for a year or two, and sell it for slightly more than they paid for it.

 

Toggie,yes that is what I mean.Why do you have some paper you want to start a fire with ?

 

Why don't you post it in Doody's thread on this exact topic?
http://www.ferrarichat.com/forum/showpost.php?p=135313355&postcount=29
It sure would help to give some current perspectives on it

 

No, I don't have a pile of green paper that big to burn.

Even buying a new 599 at MSRP has some sizable additional costs to it. I don't know what insurance and personal property tax would be for a $325k car, but it's got to be a step up from my daily driver.