The financial reality of Ferrari ownership...

1. In some states, the Property taxes (personal property tax, that is) is often referred to as the ad valorem tax and/or the tax you pay to renew your license plate.

2. In the current financial market, I suggest you clear your credit card balances completely, pay off all consumer debt (including cars), make sure you have about 25% to 30% in home equity (and if you have to pay down the mortgage to get here, then do it), have at least one year in reserve for home mortgage payments property taxes and insurance, AND be able to pay cash. If you do this, you have acted responsibly and you have protected your downside in the event of future negative consequences. If you pay cash for the car and need to liquidate, you can always sell at a loss, but since you have no debt, you still walk away from the sale with cash.

Look, I know that wanting a Ferrari means that you want it even when you can't really afford it. I believe that if you follow the rules in #2 above, you are responsible and have accounted for rainy days.

 

i keep wondering, what is RICH? is Rich the guy who is bringing in $30$-$40M per year? Or is rich a guy who may only be bringing in $500K but has no bills and an assload of money invested / saved ?

is making $1M gross per year with no debt (including house paid off) considered "rich"? What if that was my situation but I DON"T have a lot in savings (none).... Ferrari a bad idea? I could buy the Ferrari with one quarter's worth of bonus.... but then I feel weird because I know I have no savings (because I am busy paying off everything including house and have put $350K into remodel the past 3 years).... so I figure instead, I should get $2M in savings (I am using that term loosely.. I mean invested) before I buy an ferrari...

But then I have acqaintences that make 1/2 what I do and they have no problem buying a $150K car and have big fancy house, etc... and I feel like maybe I am being way to conservative ???

This thread is enlightening and great, but I feel confused now about where I fit into this equation. I wish it was all simpler and easy. I guess if I made $10M instead of $1M then it would be easy.... I must be one of those folks kind of "almost" there but not quite. Maybe in a few more years I can afford it without worrying / risking.

And I want to add, god I love this forum.... Have not been posting at all really since I bought my Cayman S instead of a used 360, but I sure enjoy the group of members over here.

 

You have stumbled onto the silver lining of the current financial woes. We are pretty conservative with our investments but still, some probably would have gone into stocks, which as you have correctly pointed out, suck. But my numbers are still on the conservative side in the long history of investments. I could have made more than 4% on Tbills. The other factor I neglected to mention is that interest income is taxable, so the after tax expense is not quite as great. My intent is just to point out that Ferrari ownership, especially modern Ferrari ownership is more expensive than most people think, even when you are lucky enough, as I was, to buy a car at MSRP.

The lesson is to realistically assess all the costs and decide if 1. they are worth it to you and 2. how they will affect your long term financial health. In my own case, I have a personal balance sheet with 0 liabilities and enough cash to blow that would not materially affect my lifestyle or my wife's lifestyle negatively as to retirement, etc. Under these circumstances, I am free to enjoy the car, drive the crap out of it and not be worried, but it took a long time to reach this point. In my opinion, the only thing being worse than "house poor" would be "car poor".

Dave

 

is this post a joke amigo? 500k is PLENTY to pick up a 150k car.. and 1m a year is WAYYYY more than enough to get a 150k car.. I don't know the point of this post but surely you know that 500k or 1m a year can afford a 150k car.

 

+1

 

You don't want one.

 

I agree with you 100%

There are too many ultra conservative types on this site that want everyone to abide by THEIR priorities. Just because they feel you need $1m in the bank before buying a $100k Ferrari they feel EVERYONE needs to follow their rules.

What they fail to realize is everyone prioritizes themselves differently. For some having a Ferrari may be more important than the larger house, or the vacation, or even having a child.

My brother makes a little less than I but we live very different lifestyles because he chose to have 3 kids, a large home and a stay at home wife he drives a $30k used vette.

Myself, I like being single, I dont want kids and I have a very modest home which allowed me to spend $100k on a Ferrari (and have a viper) without any sacrifice to my lifestyle AND I still put away 35% of my yearly earnings.

I think a single person making , for example, $200k year can easily afford a $100k car if its at the top of their priorities and are willing to do without some other things.

The problem comes when you have someone that has maybe ~$2000 month left after paying bills and then gets a $1500 mnth Ferrari payment. Thats a recipe for disaster. Its really all about what you have left after expenses and saving.

 

The short of it is: do anything you want as long as you're willing to pay the price.(revised)

 

I'm the guy that is satisfied with a 4-5 bedroom single family home, 1 exotic sport car and a daily driver. That is fine by me. Some of you here have multiple exotic cars and huge mansions, that is not my ambition, and for you guys you may need those multimillions of dollars to live that life style, but that doesn't mean everybody has to be a miltmillionaire to own a ferrari.

 

Yes, the engine came out for the clutch, not a major (aka belts).
The mounts ARE required..... if they are bad. I suppose the mounts could have been damaged by some previous mechanic? Not really sure, but the 2 factoids I'm basing this on are: (1) mine were physically damanaged and it was clear that only a fool would reuse them and (2) the shop (respected dealer) indicated that its common for this rear mount to be replaced since it sees a lot of engine torque and is tricky not to damage it when yanking the engine.

 

A few clarifications: $10k was my total for the year (over 2 visits).
My recent clutch work ran me about $6k. Of that around $4k for the clutch and the remaining $2k was for "clutch related updates". Some of these were discretionary costs (i.e. 3 to 6 bolt ring gear update) and some were required due to the new clutch kit sold by ferrari. Since my car was not up to date, this was a bit of a domino effect.

And, for your reference, we are talking about a manual tranny car.

 

360 Modena OE tires from TireRack are $287 each. Drop ship to your local shop
Recommended installers mount and balance for $25 each wheel

Ive done this for years on NSX and 911's

 

That's right boys and girls.. 1248.00 for a complete set of new tires.. NO more expensive than my M3.. Whaddya know about that!! of course doing it at the dealer will cost you 2x more.. but hey!!!

 

Steve,

You have the financial discipline of steel! Keep it up knowing that you can always spend money on toys should you decide that it is worth it to you. I think in a sense, it can be more rewarding to not buy, knowing full well that you can.

 

What are you on coke? why don't you give yourself some papercuts and pour lemonjuice on them while you are at it.. all the while sitting outside the ferrari dealership w/ 1M in cash in a suitcase next to you.. never going inside..

oh yeah and here is a handgun for when you go completely insane.. you'll thank me for it.

 

Unless, you get in over your head. If this happens, don't make any payments and write your congressman. Tell him that the predatory lender put a gun to your head and REQUIRED you to get a loan on a Ferrari. You didn't really want it, but Ferrari Ownership, like home ownership, is the birth right of all Americans.

Then, after not paying for the car, congress will come in and bail you out. In fact, Congress will pay your bank for making this bad loan and then it will cause the bank to reduce the loan on your car because the car has gone down in value. How dare a bank lend you money for the car you need and expect you to pay it back! Those damn bankers!

And, all of this will be paid for with a middle class tax cut.

For the almost 40% of Americans who do not pay taxes, they will receive a "refundable tax credit." What is that? It is a welfare payment (called a refundable tax credit) to people who never paid taxes in the first place.

After all, we just want to spread the wealth around, don't we?

 

no not a joke at all... that is my problem I guess. I have a hard time coming to grips with what I can / can't afford because my income is high, but my actual net worth is not... I don't have a lot of CUSHION if things go wrong. I need my job, every paycheck, right now. Because my income has not been like this very long (its taken me 10 years to work up to that) and I have sunk a bunch of money into my house (its not big, it just was a dump and needed extensive remodel) and paying off debts instead of "saving"..... so my gut still says get a little savings put away, then in 2 years buy the car I want. I can afford it now, but could also regret it if something went wrong... health problem, lose my job, something else unforseen if I wait two years then I buy it with no worries... if I buy now, maybe it goes fine, but every day I worry, which weighs on the heart and head and makes it not as fun or enjoyable. that is my thought.

It make me nervous. on paper, everything looks great, the income is high and secure, god situation, but experience tells me things can go really wrong really fast when you least expect it.

you think $1M is a lot, but its my gross, then I am only bringing home $500K... I want to retire in 12 years, so I need to save money FAST for retirement.... and its really not that much money. Probably a lot of other people on this forum that would consider it chump change. For me, its more than I ever dreamed of, which is why I have trouble grasping what I can / can't afford.


in the past 5 years, I have seen the VP of one company I worked for get fired ( he deserved it) and then the president of my current company get fired (again, well deserved) .... and I am sure those guys were just as confident as me, everything looked dandy on paper, life was good.. they never saw it coming. But it happened. And I know, that could be me (highly unlikely, but NOTHING is impossible). I have got a wife and daughter that depend on me, and parents that MAY depend on me soon.

Sorry this is so long... I just didn't want anybody to think it was just "hey look at me I make $XXX per year" troll post. It wasn't . I was being serious about asking how much money is really enough. I guess a forum is not the place for it.... its more the conversation you have with your buddies over a couple drinks at a bar. but I though some folks here would have interesting perspectives from both sides... plus, none of you know me , so I actually feel more comfortable bringing up my particular financial situation. most of my friends make about 1/10th what I do and have NO IDEA how much I make, not a clue (you would NEVER KNOW ifyou met me) so its almost impossible to ask this questions of my friends... I only know two people in my income range, and one of them is a car nut also, so his answer is always BUY IT BUYIT.... but he is crazy anyway.

 

its guys like you that live conservatively planning every step of their lives when one day out of nowhere they die from a stroke or a silly car accident.. grow some balls bro and start living! lmao at 500k a year... i have an adjective suitable to describe you.. its 5 letters long and starts with a P.... ends with a Y.. also used to describe the most valuable commodity in the world.

 

LOL. i know you are right. But its not like I don't spend money, just not on a ferrari. I have had fun with a lot of other cool cheaper cars, and spend money on other stuff I like... I am not really as bad as you think.

and that is a FINE commodity I must agree

 

If you are a real person and NOT joking don't take this the wrong way but you just have to be slow or daft or something.. first.. if you are making 1M a year you BETTER be taking home over 600k+ net or your ******* accountant is taking you for a ride..

2nd say you buy a 150k ferrari today.. in 4 months you are in trouble and NEED that 150k back (that is your argument right?).. then you can just sell the car at 130k or 120k.. and your only REAL risk or loss is that 20 or 30k.. that's it.. the car is a commodity and CAN be sold.. the only REAL risk is the money you lose when selling.. which would likely be under 50k and if you can't risk losing 50k on the car when you are making 1M a year then once again.. there is something wrong with you..

I am going to go out on a limb here and say that I truly do not believe you make that amount of money.. Because all your counterpoints are coming from a very niave and youthful perspective.. that being said.. if this IS for real.. my apologies.

 

$1M is a lot and also it's not. After taxes, $500K, after mortgage, maybe 250K (just guessing) - that's 20K monthly left over for everything else. If you put half away for retirement, your down to 10K monthly to live on. Enough for a 150K car, but your' going to feel it a little bit. Presumably you'll need one or two other cars, depending on your household size. If Barack gets his way, your taxes will go up an extra 10K monthly - woops, that's your retirement money. I'd get the car to experience it, but you are right, it's still a tight squeeze.

 

having assessed the costs does it really hurt to wait hell its a benefit .your savings go up prices come down .people can get faster cars for cheaper but thats not why
people buy these cars its the experience of owning one. i personally think part of the experience is not having to wake up and stress on the burden.

 

Sorry to dissapoint. The tire recommened on the passenger side door of my 99 Modena is the Michelin Pilot Sport. As per Tire Rack and Michelin (866-866-6605) the tire was discontinued as of April of this year. Therefore, impossible to get. I found them on ebay for $1487 (search the size) shipping is $150 and installation. I did not go to the dealer. I am an OEM guy so I wanted the recommend tire. As I stated earlier $1800. I am sure you can get cheaper tires, but if want the Pilot Sport, I challenge you to find four new tires cheaper. Better yet, find four for $1,248 and I'll paypal you $100 for time spent ($100 for 10 mins of work, not bad). (yeah, I'm that guy that has to be right, bad charecter flaw I know. I am seeking counseling. LOL).

B

 

... I give up you are right.. 1 M a year is a "tight squeze" especially when you are paying 50% in taxes (what state is this?!) and over 20k a MONTH towards your mortgage (to live in your 2M mansion that you financed at 100% in order to have a 20k a month morthgage)

People... get a GRIP

 

Bora.. once again.. buying the "recommended" tires from ferrari is another way to be paying as MUCH as POSSIBLE for upkeep.. If you really think that the recommended tires from ferrari are the only and best tires for the car then you are going to be once again paying top dollar..

Michelin Pilot Sports.. are decent tires.. they are also the recommended tires on MOST manufacturers... my M3 and Modena both have them listed as recommended tires... guess what.. I did though.. just like the people who don't take their modena or M3 to the DEALERSHIP for everything I used abstract though and did some research..

I have been using KUMHO's on the m3 (cost half the price AND better on the track) and plan to do so on the modena as well.. and just to argue your point.. the Michelon Pilot sports cost the EXACT same price for the M3 as the Modena.. It's the TIRE not the car that sets the value in this case..

As much as a like the pilots I don't know many people who actually buy them for their cars regardless of the "recommended" status... There are other just as good options at half the price.. and most everyone knows this..