is the bubble due to burst?

while you certainly don't need to buy an older car . I would agree the market is NOT a ponzi scheme in any way.. I have chosen to buy and to sell cars in the last few years and in some cases the market works for me and sometimes I end up over paying but so far in 90% of my cars over the last 20 years i have not lost money .... Even though i have bought cars in years like 2007 then see it drop by 50% in 2009 but i wasn't tired of the car till 2014 and guess what It sold for much more then the 2007 value... It all about the passion of the cars if i see car i really want i research then spend a little time shopping and eventually find the car and the price i can live with... never even think about loosing or making money .... but as i said in my over 20 years of owning classics etc i have bought at the top and at the bottom the bottom is much more fun but what the heck i buy the cars because i want it....

 

exactly - stocks, real estate, bonds, commodities the list goes on....

40 percent of all sovereign debt is trading at a negative yield. now how many people on this board with strong opinions are going to read this and have to google "sovereign debt" and "negative yield"?

 

95%

 

at which point will the Ferrari brand become another used car... production is approaching 10,000 units per year... not everyone is a collector or has aspirations to have several old cars around without any significant provenance... current production levels have a good chance of exceeding demand as the current crop of used cars matures

 

Isn't that the argument in favor of the "Enzo Era" cars?

I don't think any Ferrari will ever be seen as just another used car though. While production is increasing, what is the % of Ferrari output vs the total output on a given year. I don't think it will ever be seen in the same vein as a used Rav-4.

Whats Google?

 

Your last statement is exactly my point. If prices of a typically very valuable cars as a whole (an entire market) crashed to only 1/3 of value... we would all be ****ed. your last sentence is the explanation of why we would all be ****ed. EVERYTHING would be down a 1/3 and we would have a major major crisis on our hands. The entire collector car market can't go down 1/3 without bringing major major sectors with it. Also, the catalyst or factor for this event wouldn't be the collector car car market rather it would end up being the result or product (in the mathematical sense) of it. Meaning the collector car market wouldn't cause everything to collapse to a 1/3. There would be an outside influence... subprime bubble. Duestche bank and euro bank collapse etc...

So basically... we agree.

Yes F40s have been a wild ride... but just like you can't pick one stock to determine the entire stock market you can't pick one car to determine the entire car market. The sampling is too small.

 

You just can't generalize the word "Ferrari". You have Enzo era Ferrari and Fiat era Ferrari Just like you have a Picasso and a Picasso Lithograph.

 

Well, I can recall a time in the late 60's when the cherished 12 cyl cars were "just old cars". Nice examples sold for decent money (a couple of thousand dollars, or the price basic car in those days), but if the car was trashy it was just junk and priced accordingly. That GTS that caught on fire and was put into a barn sold for huge money at auction, but back when it was parked it was a fugitive from the scrap yard. It wasn't worth fixing and it wasn't good enough to be parted out, so it just sat.

Same thing will happen with modern cars when you're making 10,000 per year. Ferrari had kept demand up by restricting supply but as the realities of maintaining these cars as they age catches up with them they'll depreciate sooner or later. If the car gets through the "valley of death" in the depreciation curve and starts back up later (as 308's have done in the present market) than maybe not, but remember that Dino's and 308's were cheap at one time.

Just my humble opinion and qualified as such.

 

its like AOL lol, you go "online"

 

People keep saying this but look at the past six monts. Index was down a little over 20 percent going into monterey, and the (high production "so called classic" wannabe blue chips) are still falling significantly. Gone are the 350,000 dollar 993 turbos. There has been no financial crisis here, no war, no nothing. The overwhelming supply of those cars and fear from investors will continue to push prices downward, no war necessary. Unless these auctions can pull in more "investors." Kind of hard to do when the graph is pointing downward. Especially when many of the cars with the crack-pipe prices are still sitting at dealers unsold for how long now? Over two years? Sounds like we're nearing the end of the "return to normal phase" if you ask me. First signicant drop has happened and levelled, one more to go. The final drop is more than likely here already

 

there's a huge financial crisis - its called a world with huge amount of negative yield and no room for central banking policy. financial crisis isn't just defined my a negative equity market. the world is more effed up now than it was in 05 to 08

 

Even that is a little off. We can get Picasso Lithographs made for eternity. An authentic Fiat era Ferrari is still a limited quantity. Now if you want to discuss kit cars and reproduction/knockoffs....

 

This automotive bubble is not a Ponzi scheme. Not sure how you would create such a scheme based on tangible cars.

Some don't have the wealth to buy when prices are what seems reasonable but just out of their reach, then get more upset when the prices blow beyond even their dreams.
Others buy up and horde what they see as an ever rising commodity on credit, then can't understand when no one wants to buy their Purple Princess Unicorn Beanie Baby at the inflated price they bought it at, let alone the outrageous price they thought they could get for it if they just held on to it for another 6 months.

 

I agree, this car market isn't a Ponzi scheme unlike social security in my opinion! It's just driven by supply and demand. Of course you have speculators just like in any market place.Some do great regardless if the market goes up or down and some get burned!

 

A 993 Turbo was NEVER a $350,000 car.

I said this in the Boxer section, but worth noting here as well:

Based on the cars that I inspected at the Monterey auctions, the market today is holding steady for strong condition cars, with lesser cars being priced correctly for consideration of needs to bring it to the next level, if so desired. I can give you many examples of this with many different makes / models based on the Auctions this weekend. Of course there will always be outliers high or low, it appears that the market has matured for the better.

You would never buy a car without knowing the condition, story, etc., so why does it make sense to analyze the market based solely on the sold prices? Condition, miles, color, etc. can swing the number greatly. The current market is pricing the cars accordingly, which is good for everyone. I much prefer the current market to one that rewards any car in any condition.

Here are some examples that I've posted elsewhere on the forum:

http://www.ferrarichat.com/forum/144880343-post34.html

http://www.ferrarichat.com/forum/144881714-post31.html

http://www.ferrarichat.com/forum/144880289-post6470.html

I'm happy to point to countless other examples of cars that I actually inspected that support this claim.

 

@Solofast, fair enough point. I remember that too. I don't know the prices of the classic cars when they were new but I think they were typically on the order of 3-4x a typical other new car. What are they today? Whats the average price of a new Ferrari? I will guess that number is around $300k... I see on line that the average price of a new car is ~$32k. So we are looking at a number around 2x the factor it used to be..... This extra space between the typical selling price of a new Ferrari and the average car could be a reason why I don't think too many new ones will sit around as not worth repair if they are damaged. Also I think financing options are far more plentiful these days.

And I also think the Ferrari mystique has grown since then and even now when people see one of these cars its exciting because "its a Ferrari" - doesn't matter the model. I think that will give a little bit of a prop to the pricing. Proof is how come modern Ferrari's don't depreciate at the same rate as other normal cars. Thats just my take as well.

But just out of curiosity I looked up pricing on the 355. MSRP base price was $130k and today they seem to be around $70k. Thats a 54% residual value after ~20 years... Not too bad I don't think.

Just for fun, I looked up 1998 Honda accords... $15k new and around $2k now... a 13% residual.

Now thats not entirely fair since the Hondas have 6 figure mileages and the Ferraris have no more than around 40k miles. If we look at depreciation / mile driven I bet the Honda is doing great. So I'm not saying this absolutely proves everything, but I think the gap between 54 and 13 does mean something... It seems to me that these older Ferraris are seeing a premium for some reason.

I guess time will tell with cars like the 458 but I suspect it will be closer to the 355 experience. Again JMHO also.