Is this a bubble?

My crystal ball is in for a major, but my view: for 308s, not a bubble.

First, prices aren't shooting up for steel cars. Hagerty's index was flat this month.

Second, remember that it's a largely handmade, classic two-seater Ferrari for the price of a new Porsche Boxster S. We're all too conditioned to take it for granted that there's an endless supply of decent 308s available for $40K. These have been stupidly underpriced for a long time. 308s are a lot of car for the money: driveable, relatively reliable, affordable to maintain relative to other Ferraris, and most people think the styling has aged well. (I do.)

Frankly, there aren't many Ferraris I'd want to own out of warranty other than the 308/328...

I also own a vintage Porsche, and while I think prices are optimistic right now (and probably due to slip a bit), it's also true that they're the best vintage cars to drive and own - reliable, cheap to service, build quality, huge fun to drive, excellent spares availability, incredible club scene, and massive history/nostalgia. The value is there. I wish I'd bought a 911S at the same time I got my 356, but I couldn't swing two restorations at the same time. (Money, partly; sanity, mostly... )

 

Small bubble

Steve's column this month is going to help $ even more when the thaw comes and people start really wanting one this spring.

They will fall back a little after the frenzy but never to what they were before.

But keep in mind they really have not increased in value much at all. Even with this nice shove in the back we are seeing, all it really has done is just keep up with inflation and no one here would ever consider that a good investment.

When I bought mine in 97, a QV sold in the 30's. I paid 34,500 for mine but I looked at two that were a few thousand more. Either way they were pretty much all 30 thousand something. Some low some high.

$35,000 then is a little over $50,000 now. Remember that thread where we were predicting the value to be published this month? Our average guess was $49,000 or so. We are the market. That was our number.

In other words if I were to buy a 308 today I am spending the same money I did in the late 90's.

We really shouldn't get too excited until we see the 70's or 80's as a matter of routine. We are not there yet.

(It will be fun for me to pull this post up next Jan and re-read it then....)

 

Last night I saw a TV commercial for a company that will lend you money to buy a classic car. To me that's a bubble sign.

 

I wish I could pull the conversations when the Dino started to sky rocket. I don't think that it is a bubble. The price of the 308 has been flat and underpriced (IMO) for the last 8 years. I agree with Jon. I also think that the age group that grew up with the 308 is at that age where they can/want to buy one...(may be part of the recent Countach +300% increase also).

Yes, I know that advertised price on eBay may be different from actual selling price. But here is another recent example that is in a Hagerty Condition 2, in my opinion. I'd be tempted, but it would be difficult to smog here in California:
Ferrari 308 Ferrari Euro 308 GTS QV | eBay

 

As a possible dispassionate indicator, Prices for steel dry sump 308's in the Uk have been comfortably over £60k ($100k), for some time, and the very best carb cars are now pushing £85-90k ($130k+) ..... If the trend were to follow that of the Dino 246 recent rise, then US 308 models should , i would have thought, get to a similar level, at the very least (barring another financial meltdown, of course!)
BR,
Jez

 

+1

 

US market and European market are different. I notice that American members seem to talk the prices down, whereas there's a real rise in prices in Europe.

 

I don't think it's a bubble. IMHO 308's have been underpriced for some time and are now starting to find their true value and as time goes on there will be less cars around. Parts become more valuable as the cars rise so more cars will be parted.

 

Both of these guys are right, it's going up but hasn't really beat inflation yet.

 

With the lessons learned in the sub-prime real-estate market bust several years back, I would think that nowadays institutional lenders would be very careful to only finance something they believed is a good investment, i.e.: an asset that will maintain or increase in value, or at the very least depreciate at a rate slower than the principle is paid down. Given that classic cars are, de facto, fully depreciated, that leads me to believe that these lenders think they are a safe investment.

 

Agree with Dr. Tommy and Bullfighter, and not surprised. These guys have been in this market a long time as owners, have seen cars - and many newly minted hyper enthused new fans - come and go. Yet I'll offer a diversion:

The spiking of prices is following the dreaded '80/20' curve where the frenzy feeds itself. To me (and this isn't remotely original) reminiscent of 1989. Not talking about the 'conditions' that led to that, only the price curve parallel.

No doubt a bubble here. A settling back will occur. The higher priced cars will definitely fall the farthest. The 3x8s will probably just 'correct' a bit with the market, but we won't see the "$35,000 all day every day" prices we'd seen for way too many years.

I got out of my Boxer, Ford GT, NSX all in one swoop, admittedly early. I just got uncomfortable with nearly half a million in 'value', mostly sitting around not being enjoyed as cars. (Dumbest sale for my purposes of actual driving? The NSX since it was/is imminently usable, had a rational appreciation.)

In my limited opinion, when 'investors' who are not the end-user or appreciator run the prices up, the bubble forms. Lenders, brokers, middle-men, 'funds' for car ownership all conspire to create disproportionate 'values' that can and will only deflate when rationale takes over. The music stops.

My few little toys remaining are all 'sanely valued' (at least to me) so if/when the correction occurs, hope not to get hammered too badly. The 3x8 market still seems in the comfortable range. Too many fans, too many positives, too beautiful, too representative of a bygone era - and yes - too cheap for the long-range view of value.

 

Only a couple of models have not gotten on the train and left the station. Last couple of years we have watched the 250 GTE ride away, the 246, the C4, 308 glass, etc.

The 308's are climbing aboard now.

When is the Mondial going to get the memo? The 400i?

Remember when everyone said the 246 will never have value because (fill in the blank)? That made sense then.

Who here believes we will ever see 1981 Mondial 8's pulling 6 figures all day long?? Today I just cannot get my mind around that ever being a possibility. That is my impression TODAY 9 Jan 2014. Someone else go ahead and say it - say it will NEVER happen because (fill in the blank).

 

As long as the Fed can unwind the stimulus without tanking the economy, the car appreciation will hold.

 

What you and others forget is people go down stream.

As people move out of the Dino, bb, 308glsss for whatever the reason ( can't afford it, love the money it brings etc ) that car guy is still a car guy and love cars. Once out, they go downstream, (the mondial, gt/4 or 360), which stabilizes those prices....you may never see a 100k mondial or 100k 400, but soon enough you will never get those cars ( in good running condition ) for 25 grand ever again.

That's why they made fiats and Alfa's

 

Yes, and the usual rationale back then was that 246s are "common", because by Ferrari standards they are (over 4,000 of them). But, the numbers involved for all these cars are pretty small compared to worldwide demand when a car is perceived as collectible.

Early 911s are the perfect example. Because there are tens of thousands of them, a lot of people were blindsided by the strong rise in prices. Also, like 308s, a lot of them were used hard, because they were never viewed as serious collectibles or otherwise irreplaceable. (I.e., who would want a '69 911S when the '90 964 is much faster, etc.?)

Parallels to Ferrari... a 360 is a much "better" car than a 246 or 308. But maybe not in the ways that ultimately matter.

Many others have said it, but modern cars don't really replace vintage/classic. A 599 will never be a Daytona.

 

I hope I live long enough to see the values reach what I've put in my car. Would I sell it? Probably not if I can still drive it.

 

As I briefly mentioned in my first post. I see 70's and newer (80's for me) becoming more popular and 70's and older becoming less. Why? Because the people that want the older classic cars are growing older and their priorities may be changing. That generation, that grew up with the 50-70's Ferrari's, will also be shrinking. For me, I would not be interested in anything older than the 1980's (I would take a 288 GTO any day over a comparable priced 1960's car). Actually, all of my "bucket list" cars are 1980's and newer. So, my prediction: more buyers for 1980's classics = more demand = higher prices. We'll see

 

If I had an extra $50,000.00, (and an extra slot in the garage), I'd double down!

 

I'm the outlier, I suppose. Some of my favorites are older than I am. Hoping E-Types and Cobras tumble in popularity so I can pick a few up on the cheap.
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Could we also get in the same page of no car that left the factory had paint that would make it into the hagerty #1 or #2 condition.

If it's that good it has been repainted yes??

Because the paint job on my 82 isn't great.

 

I look at what the cool cars that 40-50 year old's could have on their bedroom posters when they were teens and follow that trend. The other trend to follow is follow the next model from the boom car - (the 308 is after the 246) (or mercedes the 300 shot up, then the 190's followed and the pagota followed that)

 

I don't think it's a bubble. Several dealer/broker friends have asked me to find all the 308s I can. The one I bought mine from two years ago wants it back. I could almost double my money selling back to him. $100K wouldn't even get my attention because I have exactly what I want and would be hard pressed to find anything better for the same money. I don't care what Hagerty currently says. I really enjoy my QV, even when it's sitting in the garage. A dream that came true. How do you price that?

I also agree older cars will tend to become less popular as time marches on. Not a new discussion but who among the 30-50 crowd is collecting Model As, street rods, 50s era land barges, and even now, perhaps American muscle (and I own a 67 GTO)? The 70/80s are now vintage and as iconic as the 308 is, it has nowhere to go but up. With a little over 12,000 made over it's ten year run, 308s are rare. It has aged well and is as pretty a car ever made. I'm still amazed at Dino prices for what they are. In my opinion, the 308 is better...in every way, yet valued at a fraction what a Dino goes for. Wish I could acquire five more 308s just to speculate.

The countdown sequence has begun. Hold on tight. Once the rocket clears the tower, it ain't coming back anytime soon.

 

Sorry, but I have to take issue with you. My 81's paint is as flawless as the day I picked her up from the dealer. I did however pay for a special color factory paint job.
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Yes and yes.

There are those of us who complain about the cars being/getting 'too expensive' and then there are those of us who can't wait to be driving around in a $300k car... for those of us with the stones to drive a $300k car.

It's almost like the former group was holding the 3X8 line back from it's true potential and it's, finally, rising.

When I bought my car, I couldn't believe I paid as little as I did for EXACTLY what I wanted (I hope JimShadow doesn't see this): a series 1, Euro, and it was originally the color I hope to paint it one day to boot!