The financial reality of Ferrari ownership...

IMO a good rule of thumb is to pay cash for one. Think about what that means? You have the money in hand, you've weighed spending it on something else or investing it, you're in a position to have saved that much, you're making the decision to buy a car with it so you better have other things in place.(you don't want to own an expensive car and live paying rent for example) Many will argue that the money can be invested elsewhere but most saying that don't have the money laying around in the first place. Pay cash or don't buy.

 

I also think a good rule of thumb is being able to pay cash (even if you don't, the key is being able to). In other words, if you can get a loan for 2% to buy the car, that might make sense, as long as if needed, you could pay cash. If you adhere to that rule of thumb, then usually you can't get into too much trouble financially over Ferrari ownership.

I have purchased two Ferraris and have only done so when I had enough free cash (i.e. fun money) to afford buying the cars (and upgrade parts, if needed, which can add $10K typically) outright. It's also a good idea to be debt free (in my opinion) before putting too much money towards something like a Ferrari. In other words, if you are $40K in credit card debt, you shouldn't be car shopping until you pay off the credit card, student loans, etc, etc.

Just my 2 cents.

Ray

 

My 2 options are to win the lottery and buy it cash with my winnings or continue to work and save for years until I can get the money to pay for most of it in cash and finance the rest. I don't need a 7 bedroom home to be happy, but a Ferrari is another story and of course it's much cheaper than a home. I'm interested in only the 360 modena or F430.

 

well, keep in mind buying the car is just the start of it. Unless you can work on your car yourself (as I do), then if anything breaks, it can potentially cost in the $5K or higher range. A good rule of thumb I have used for Ferraris is to take the price of any part or labor on a Honda and multiple by 10x. That will almost always get you very close to what the same job on your Ferrari will end up costing.

Even routine maintenance can add up rather quickly. If something semi-serious breaks, you can be looking at $10K pretty quick. It's not really a car to fool around with when money is a concern.

Ray

 

I don't fit in any of the three profiles.

Definitely couldn't buy with cash.

Mid-50's

Feel ZERO pressure to sell.

Not upsidedown

Car is holding strong


G

 

A ferrari is a pure luxury/discretionary item (a fun one, but not mission critical on the food-shelter-clothing-healthcare-education continuum), and I agree with the above posts in that it's not worth putting your financial health in danger to own one, especially now that credit is tight, the market is soft and no one can predict whether another economic shoe will drop. This is a good time to buy if you know you can afford to buy and hold for a while (probably years not months), but this might be a tough market if you buy and either can't afford the aforementioned unexpected repair bill (really hard to sell one that needs a major repair), or your job/portfolio/inheritance/health or whatever faces an unexpected change and you have to sell a car into this market. Only you can weigh how important the car is compared to other discretionary expenses such as dream houses or vacations, but I agree with the notion that you want to have your financial house in order and your non-discretionary expenses covered before launching into a 360 or 430. As for participants here and what category the fall into, you will find folks that fall into every category you mentioned, including your own, but don't expect enough posters to respond to the direct question to get a feel for the percentages. If you read enough posts, you get a sense that some people want to own but don't, some people own older Ferraris and self-perform maintenance to make it more affordable (or own older ones because they prefer them to newer models), and others own the super cars or own multiple Ferraris. The common thread is that 98% are enthusiasts, some more Ferrari-centric than others.

Your general question is not unique to the board, and it usually leads to a further discussion about whether someone should finance a Ferrari or pay cash, or be able to pay cash but still finance, etc. Every situation is different, but the credit markets will now start to weed out who should or can finance a Ferrari. Good luck though and hope you can prudently make it pencil, which is the gist of the responses are saying.

 

I think you are putting yourself in a world of hurt my friend.. you were trying to buy a 60k 360????? do you realize that any 360 at that price range is likely going to bury you financially on maintenance??

I don't know what middle income is.. but if you are looking for a 60k 360 modena you are going to be really hating that car once the bills come in.. do yourself a favor buy a 60k 355 which will likely be in better condition and even though maintenance is higher the bills likely wont hit you for a few years.. a 60k modena is going to be a basketcase and you are going to have mechanical issues within months of purchase which will really REALLY mess you up financially..

 

COULD NOT AGREE MORE. Very well put! look at my profile. I have owned almost everything except for Porsche and Lamborgini. NOTHING compares to ferrair bills. My spider has 7k miles. My first service bill was $7600. My Modena has 16k miles, my first bill was $24.5k. And both cars looked and drove like new. What you will find is that much of what gets replaced is because of age prior to the part actually going for fear that failure may affect something else.

For $45k you can buy one heck of a lotus espirit V8 with relatively small repair bills.

Most exotic cars, with few exception, are a massive drain on your finances between upkeep, insurance and depreciation. Make sure you know what you are in for.

Bora

 

That is Fing insane, why should we allow people to charge that much for that kind of work. There is no reasonable reason service should cost a quarter of $100K. You can buy a new toyota for that money lol. Does anybody have any experience with Aston Martin DB9 and it's maintainance costs?

 

What the hell did you spend $24.5k on with your 360? A new engine?

 

Agree. The repair bills can be shocking if you are not prepared for them or no way to pay for them.

I think the OP's 3 categories leave a lot to be desired. In fact I'd be willing to bet that many f-car owners on this site are not: ultra-wealthy, nor who had to substantially cut back, nor are low income.
I think there is a huge range left out between the first two categories.

 

I had an 01 DB7. Again repair bills, from what I seem to remember, were $2-$3k. Nothing like Ferrari. I have an older Toyota Tundra that still looks like new but I have my eye on the new body style. I have been waiting to pull the trigger but am too frugal. I wasted the cost of a new pick up truck in these two repair bills!!!!


B

 

If your budget is 60K, you shouldn't be looking at a 360, or even a 355 for that matter.

If you want fast, buy a Pbug of some type. If you want Ferrari, go take a look at late 348s, Mondial Ts, early Testarossa cars, 328s -- all of which are in the 40-50 range. That gives you a cushion for that "oh hell" moment. Honestly, all of them are fast enough to get you thrown in jail, and every Ferrari can be eaten 0-60 by a $10K motorcycle.

 

breakdown of $24.5 k (dont quote me, bill is at home)

$5500 - new dash (very slight warping in leather)
$300 - oil change
$500 - clean headlight lenses from inside
$10k - rear differncial and cv joints
$5 - front ball joints
$3500 - engine mounts

btw- not included

$1800 - new tires Pilot Sports (rears go fast)
$4000 - new exhaust (getting old and creating lots of dust in my engine bay)
$1500 - coolant flush - my wife overheated the carand I didnt put the recommended shell in there

 

Whether pocket change, or financial burden, I recommend owning a Ferrari (and actually driving it) at least once in your lifetime. Even if you strain to buy it & end up selling at a loss, if you enjoyed it then "loss" is subjective. When I remember that my Spider rents for $450 a day in Vegas (and you only get 10? miles to drive)... then I feel like I've gained from the experience!!! Do it

 

Many potential Ferrari buyers are unaware or delude themselves of how much ownership really costs. Until all these costs are properly assessed, a person cannot accurately determine how ownership fits in with his/her financial situation and how owndership will affect their finances in the future.

Here's an illustrative example from personal experience:

I bought my 430 new in 8/05. cost was about 190K out the door. I paid cash and could have flipped it for maybe a 20K profit. Instead I took the scenic way home and put a couple of hundred miles on it that afternoon. The odometer might as well have been counting 100 dollar bills. Now it has 13K on it and maybe I could get 150K for it. So here's a rundown of the costs:

Depreciation: 40K
Service: 3K
Tires, brakes: 3K (It's been on the track hence new pads needed).
Insurance: 4K but current about 900/year.
Prop taxes 5K (current year down to 900.)

Total: 55K

Now here's the back breaker: Suppose I had sold it for 200K and invested that money in interest bearing securities at 4%/year. I would now have 225K. Instead, I have 150K and I'm out 15K in running expenses so the car's true cost of ownership is 90K if I sold it now. If I had financed a significant amount, the costs would be much higher.

Wait there's more: Let's say you are 20 years from retirement. This 3 years of 430 ownership would cost your future nest egg a total of 197K figuring a conservatie gain of 4%/year om the 90K.

Ferrari ownership ain't cheap!

Dave

 

Dave, koodus!

I think one of the most responsible things we can do is look out for fellow car buffs and save then from a big finaicial mistake. Let's face it. Life behind the wheel of these cars is unbelievebale! But as the economy around us crumbles, keeping your future stable is far more important. I deal with young guys that make a LOT of money. I'm 41 and its hard to edcate without preaching but still worth trying.

Good for you giving it a go.

B

 

quote Prop taxes 5K (current year down to 900.) quote


property taxes on a car? I have never heard of such a thing.

 

I'll be the lone contrarian and say that (almost) any 360 is worth 60k. (Where are you going to find one cheaper?) Short of blowing an engine or wrecking it, you could always get your money back in short order.. (something that can't necessarily be said about most of them for sale).

As far as the 3 catagories go...pretty good. The only thing I would comment on about them is that everyone's definition of what "I can afford a Ferrari" means is different.

good luck. hope your eventual car is everything you hope it will be for ya

 

Come on Dave. Don't get me wrong, I did this math too before I bought my car and ownership is expensive. BUT you are using discounted cash flow and discounting to different points in time to make your point; that just isn't correct. You need to discount everything to one point in time THEN discount that point to current dollars (assuming that the first point isn't current date).

 

Huh? They do that? This has been a topic several times here.... only 1 person was able to resolve to my knowledge (called for taking the light apart). Your dealer did this? Woner how they did it considering it's very difficult to get in the rear of the light assembly. I know.... I've looked myself.

Would like to hear more on this procedure and how bad it was before, and how much better after.

 

Bora,

this is NOT normal maintenance.. this looks more like the maintenance during 5 years+ of life on a car.. you are listing some major issues here that most owners (if they buy smart) won't experience.. for instance.. the engine ounts and exhaust and dash and CV joints are uncommon.. that is 20k of the 24k bills right there.. likely during the entire 50k ownership of a car would you maybe see these issues.. and if 25k maintenace on 50k (about 5 years driving at 10k miles a year) happens then that is fine by me..

ownerships costs (tires/maintenance) on a 360 modena likely are 2-5k per year if the car is driven 10k miles.. which is really quite good considering the car you own..

 

have to agree $5500 for a dash is not maintenance.

 

Dave,

I wish i could say came out excellent! I beleive they did what others have talked about doing on previous threads. Although I believe they have something a little nicer than rag on a stick. it came out ok. Not sure i woud say drop $500 to get it done. If your dealer charges you an hour of labor, then go for it otherwise, subjective return. I had mine done at Ferrari of Central NJ.

Dave,

To be a little more accurate, neither of my cars were bad. I have seen some that were much worse. I had some dust on mine that IMO made the car look old. The lenses themeslves were pretty clean.