550s Below $100k?

My point is simple -- the market for Ferraris does not exist in a vacuum. I did not mean to rant, but rather to discuss how Ferrari pricing could--could--be impacted by economic events. For example, if one believes that the market for 550s is under 100K and falling, it might be a good time to sell now (if selling is what one desires) because the price will be even lower later. However, if one believes that the general economic conditions are favorable, it might be a good idea to wait and let prices strengthen. My view is that prices on production cars, including the 550 are headed down. The premium on new 430s and 599s are headed down. That's all.

 

While I agree that modern Ferraris, across the board, depreciate, I do not agree that the overall Ferrari market, for any model, is going to be impacted by the subprime crisis or any other crisis for that matter. Yes, there will be some exceptions to the rule, but they will be the outliers. A Ferrari is a luxury good. Pricing on luxury goods are very sticky on the downside. So while a market crisis may affect liquidity or how long it takes to sell a luxury good, it generally does not trigger price decreases.

To use another example, if I follow your logic, diamond prices should be falling due to the subprime mess.

Guess what, they're not. Yes, I'm sure that you can drive a harder bargain that you could, say, a year ago. But, prices falling? I don't think so.

I suspect that you may be suffering from a little bit of a halo effect. That is, whatever you do for a living is impacted by the subprime crisis. Thus, it is understandable that you may think that it has the same impact on other people.

I can tell you that it doesn't affect me or those who I work with, even though I'm involved in the home buidling bidness. In fact, in my circle, we saw this one coming well over a year ago. Thus, we have zero inventory. Zip, nada, nuthin.

Indeed, the buzz in my little world is whether it is time to start up a vulture fund to cherry pick the ROE inventory...

Dale

PS Personally, I don't think we have hit bottom yet.

PPS I must admit that you got me, though. Here I am doing what I criticized you for doing, mixing bidness with pleasure. So I'd rather not continue this debate because, once again, I don't come to F-Chat for financial advice. I come here just to shoot the **** about cars.

 

thinking this through more, i am tending to believe that adjusting for inflation, ie, future depreciation of the value of money, the 550 may become the 328 of more recent times: entry-level and affordable to purchase, with the exception being very soaringly expensive to maintain (relative to a 328 which, evidently, is still expensive to fix as is any Ferrari) when major repairs are warranted.

it seems at least from what i have been reading, the 550 is much more the potential maintenance whore than a 328, requiring special computer equipment to diagnose certain repairs, with such repairs expected more often. but i've never experienced either case so perhaps i'm off the mark. regardless, the 550, then, may become more akin to the general profile of the GTC/4 --an "affordable" entry-level exotic that holds great potential for fantastic levels of rape on maintenance, with the redemption being, perhaps, that the 550 is modern and more reliable a machine.

 

How on earth can you consider a 550 entry level?

The 550 was the flagship of the Ferrari production line (Enzo, F50s are not production line cars).
The 3xx series cars, while fantastic, were Ferrari's entry level.

John



This boggles the mind.

 

Prepare to be B%&#@-slapped when the Chairman of the Board reads this. As everyone knows, 328s not only never break down but even if it was to happen (urban legend that one needed a new clutch one time) the mechanic would be required to reimburse the 328 owner an amount equal to the said repair for the honor of laying hands on a 328.

This is from page 36 of the 328 Syndicate handbook.

 

Am I drawing the wrong conclusion that both the 328 and the 550 are devoid of major design issues and for the most part are very reliable?

 

Funny you should bring it up. Lexus contacted me again -- yeah, it's getting to the point of being a nuisance -- about buying my car so they could incorporate Ferrari's quality secrets into their new supercar. Enough already, I say.

I think all Ferraris have their weak spots, but overall I would say you're right about the 328 having no major timebombs. I haven't owned a 550, so can't really comment there. I know one 550 owner here in San Diego, and he loves his car (and drives it). AFAIK, they don't have anything like the Boxer/TR 'exploding differential' or 355s '7 habits of highly defective cars'. But reading about the service costs I can see why prices might settle a bit further: it takes someone totally enthralled with one of these cars to buy one knowing that five-figure service bills are a real possibility, and the market only has so many people like that.

 

lol

as for the rest: 550 is a bargain at today's prices I feel, but will still drop. I put it in the $65-70k range for bottom, and anything less is an issue car. 550's, 456's, and the 575 will hold their own <IN THE FUTURE> as the 3x8s in terms of desireability [in terms of looks, performance, 12 cyl, maintenance--especially 575's for ODBII-- and FUN].

 

that it was a flagship is not relevant when it can be bought so cheaply in only a few more years. some of the $85K valued cars today will easily go for less in 4 to 5 years. i would consider $65k-70K entry-level for a Ferrari.

not really.

 

your conclusion is correct. members who actually own them can corroborate this.

however all cars --reliable or not-- require maintenance as they age and will have issues arise specific to the car. the 550 is such that one must take it to the dealer only = fantastically steep costs in both parts and labor. therefore, over time the potential running costs for a 550, despite reliability, will be far beyond a 328.

 

lol... i like your humor.

agree.

 

I'm unconvinced. In fact, I'd go so far as to say that since the timing belt is in front of the engine, and since the engine on the 550 is in front of the car, that major service on the 550 might be *easier* than on some mid-engined cars (engine out required for belt changes, often).

But, that being said, looking into the engine compartment and seeing so little room for my arms to get in to turn a wrench was a big turn-off to me for the car (which I admire aesthetically).

 

With the impending real estate crisis, I don't see the post-vintage Ferrari market being especially strong over the next 4-5 years. I don't know how bad it will be, but I have a hunch these

Someday I'll ditch my 328 and step up to an entry-level Ferrari.

 

I don't know how influential a factor that is. The overall market for Ferrari automobiles is big.

Possible 5-figure service bills: true for ANY warranty-less Ferrari, and most Ferraris are purchased "preowned", often with several previous owners. In the largest potential-owner economic category, the not-wealthy one, there's a large number crazy enough make the jump in the face of these facts.

 

How do you know all of this?

My Ferrari tech in San Diego (independent) works on a lot of 550s.

 

that all cars require maintenance? every car i've ever owned has required some form of maintenance regardless of how reliable they were.

 

No, how do you know that the "550 is such that one must take it to the dealer only"?

 

unless an independent shop owns a computer to run diagnostics on the car, you have to go to the dealer. those shops probably exist but are few. for an oil change, you could probably do that on any car yourself in the driveway (however i wouldn't want to do an oil change in an F355).

 

Is this computer different than the OBD equipment they use for the 355s? Doesn't seem like a 10-year old 550 would be beyond the ability of most Ferrari shops.

 

if i've got this right, the F355, 360, 550, 575M, 456, F50, Enzo require Ferrari SD1 or SD2 software to run full diagnostics. developments have probably been made in this area, so if anyone is SD savvy, please chime in...

 

You need an SD2 to set the POS for the F1 clutch. 550's are 6 speed manual, however, not F1.

By law, the $30 OBDII scanners have to be able to read/reset the error codes for the engine, though (not much of a hurdle for an Owner or shop).

 

Thanks, that's what I thought.

 

Many independents have made the investment in computer software and OBDII capability to work on the 550's. So I'm not sure where the dealer needs to come in, particularly if the independent is diligent in keeping up to date on the recalls and TSA's- which the good one are and the car is out of warrantee.

 

Maybe you and I consider the term "Entry level" differently.

Are you saying the 550 will cost less than a 348, 355 ? or are you saying that since they are so many of them (3.5K) they can be had easier?

 

unless i am incorrect, the SD2 is a Ferrari-proprietary/specific diagnostic software that must be purchased by independents from the dealer. in other words, i don't believe the SD2 is an off-the-shelf thing like generic OBD II equipment. most major car makers have their own diagnostic software.

however, cars are cars. there are probably many independents and master mechanics that can service late model Ferraris without the Ferrari software. i would imagine the SD2 makes diagnostics much easier but is probably not entirely necessary. indeed, a computer readout alone cannot fix the car and cannot replace experience.

i suppose some independents that do have Ferrari SD2 use this as a selling point for their services but do not actually need it for major work.