What's the cause of the car market slowdown and is it like other ones?

That's hilarious!

For those who can't read the screenshot, see https://content.knightfrank.com/research/540/documents/en/knight-frank-luxury-investment-index-classic-car-special-q2-2018-5812.pdf

A coffee table research from Knigh Frank, the estate agents(!), but the car data is from HAGI, and you can look at their price history and draw your own conclusions. I'm certainly not dissuaded by these comparisons from continuing to "drive it like you stole it".

 

Don't be so sure about that. I know ALOT of 20-somthing whipper snappers that drive sticks and prefer the stick. They're the type of guy who likes cars and will buy a Ferrari when they can. Note, not the guy who drives a beaten Camry and doesn't care what he drives.. but true car enthusiasts. I think it's a flaw to assume that the US is the center of the universe for all things car related. In Mexico we sat in a Mercedes sprinter van that had a stick. We don't see it here because everyone wants to text and drive, but in emerging markets the stick is alive and well.

 

FWIW the 550 and 575 might be great cars, but the mid engine sports car is the what a Ferrari is in the minds eye of the public. Not surprised it takes time to sell. Why buy an F1 575 when I can buy a 599?

 

Going back to my 45-year old car guy who has some dough. Did he read Road & Track growing up? Will he care about a 275 GTB or a Daytona? Even if he is interested in a F40, will he be willing to buy such a raw car?

 

It's not that I was unlucky, the issue with Ferraris that are used is that many owners are the "less is more" type of owners, they do the bare minimum bc the car is a showpiece to go to dinner and showoff, and its not treated like the high tech piece of engineering it is. The 575 is a spectacular car, but it was my first Ferrari so I didn't know all the ins and outs of buying one. Many of the big maintenance things that took a ton of time and money were things that had the previous owned not been a cheap bastard wouldn't have been issues. Take for instance my clutch position sensor, that was a 4-5 week job + $3,700 and mostly labor. The clutch position sensor could have been changed by the previous owner when he did the clutch but he only did the clutch disc trying to save some money. When you tear apart the car to get to the clutch, the labor is whats costly and the clutch position sensor is nothing expensive, but the guy skimped and when buying the car with 100+ pages of service records that was missed. Have you seen most shop receipts? They suck, the guy I currently use writes out detailed step by step of what he does, the next owner is going to have a quick and easy ppi.

My car is perfect now, it just took a lot of time, aggravation, and money. I bought the Ferrari to have fun, I didn't buy it to have it sit in the shop for weeks on end waiting for parts stuck in customs. It was a first try, now I have an 812, its given me no issues bc from day 1 I've maintained it properly and don't skimp around on things. The 575 really gave me anxiety every time I drove it at first, it was like o my god what is gonna go wrong today. I had to flatbed it 3x in maybe 6 months. It wasn't the fine piece of engineering I thought it was until we went back and fixed all these silly little issues that should have been addressed. Again many of these cars sit at dealers for a year or more, things go wrong when you don't use a car too.

I love old cars, I have alot of them: 575, SL500,SL600, 500e but they are time consuming and expensive to deal with.We're in a society today where everybody wants instant gratification waiting a month to get parts for your european car is not really in the plans when countless cars are just as quick and way more reliable for a fraction of the money today. As much as I hate Tesla a p100d can do 0-60 in 1.9 seconds. If you're the type that just loves to launch, there are plenty of options out there without the headaches of classics.

Aside from that we're at an interesting time in history, you have a massive amount of baby boomers retiring and they're dumping their toys but are there enough buyers? Im 33, guys my age who didn't have wonderful parents who paid for their college or wedding like me are saddled with debt beyond belief, my cousin is the same age and $369k in medical school debt, so buying childhood dream cars is not on his mind for a while.

I still think 80s and 90s cars will take off sooner than later, guys my age love cars as much as you older guys, but most are knee deep in debt right now, let them work out of it and the car market will be fine.

 

As an *ahem* middle aged male who tore out the 348 article in R+T from the library in the 80's when the magazine was put into the "take it surplus" rack... it depends. There's having MONEY to indulge your whims. I.e. I sold my company for $15 mil and I WANT to have a couple classics for my 3 car garage from when Enzo was alive. Then sure, I'll spend the cash and have the classics and they'll sit until I drive them once a year.

If that 45 year old guy is a professional with a six figure income and a) actually intends to drive it, b) has to pay for someone to fix it, c) wants something that has some cache.. of course he's going to go for the 458, 488 or newer car. It drives like his Porsche, he can take it out, it has a warranty and can be fixed by his local mechanic.

None of the 40 year old professionals that I know will buy a classic to drive. Sure there are exceptions, someone will park an F40 on the curb in the ghetto, but by and large they'll buy a newer car unless collecting.

 

The worst part with these cars is the maintenance. Esp with early 80s' cars. The first two can be had on ebay or craigslist for under $5k. the latter under $20k. I call it the "wife factor". When the wife starts asking the car guy "You bought that car for $5000. You just spent $6000 in the last 6 months at the shop! What are you doing?" Mind you, she's wearing Louboutin's when she says this and an answer "it's an emotional connection" is an unacceptable answer.

I don't think the Boomers huge homes or their toys will fare well personally. Esp the 60's and 70's muscle cars. They go in a straight line fast but fall off the road in a turn. Unless you were 16 lusting after one, ain't gonna happen. Market I suspect will implode when the senior citizens who own them die and their garage gets liquidated in the estate sale.

 

I've felt the same way for years, there's entirely too many 1950s and 1960s cars like corvettes out there at silly prices and 99% of guys my age could care less, and Im a car guy haha. I want the cars I wanted when I was a kid, not the ones my dad wanted. It will be interesting to see where those markets go, but south and fast is my guess. Those 1950-70 cars are for the most part not remotely rare.

You're absolutely right maintaining the cars is timely and expensive and its hard to justify it with most wives, depreciation they accept bc they don't see it leaving the bank account haha

 

The issue you run into as well is money is freaking cheap. I leased a rolls royce in 2016 for $30k down and $1999/mo BRAND NEW, it wasn't loaded or anything, but it was still cool. When you buy a classic you tie up all this money in an illiquid asset. My 575 has been for sale 3 months and not even 1 person has called my friend to view it, so demand is low, my wraith cost me $2k/mo and then i just gave it back. Leasing these exotics brand new vs buying/fixing a classic if you do the math isn't that big a difference. I spent $13k on the 575 last year in maintenance so thats $1,100/mo in maintenance? I mean geez its a cool car and all but you can lease an M5 for that and have an awesome performance car with none of the headaches. Is it as rare? No but its faster and plenty of fun.

 

Just FYI, your ad is marked as Sold, that may be the reason you aren't getting any calls for it.

 

It's sold bc Fchat wont let you pull it down, I sent it to my friends dealer bc I moved away. I asked them to take it down but they have their "rules"

 

Wife complains about maintenance costs. Tell her its your 4 wheeled and ONLY girlfriend.

 

With the cost of new Ferrari cars continuing to increase do you think it will provide a floor to some of the older Ferrari?

 

my 7 yr old always ask why i dont sell the corvette - i tell him i will never sell it and i am leaving it to him

he responds by saying he will sell it then.....

 

IMHO I think on the recent used market absolutely. I.e. Last 20 years. When you get into the "Classic" market.. it's a completely different animal.

You can buy a used 488 for $200k or you can buy a Dino 246 (lets say). 488 will let you hang with your friends in the latest Corvettes and lets you take a Bluetooth call. 246, well if it starts today and runs.. you can let them jet ahead and meet them at the lunch spot and hang out with the MG owners. (Oh the carbs need adjustment? I don't even know any mechanics that do that anymone) OTOH, why should I buy a new 488 when I can own a used 458 or 430 with similar "modern" looks and performance at half or a third the price?

 

Honestly with all the computers in these new cars I wouldn’t be shocked if something like a 458/488 is worthless in 15 years, they certainly won’t age as gracefully as a 355/550

 

I believe these new computer heavy cars are going to be real maintenance trouble in the future?

 

Perhaps more interesting is what is missing in this report. On a 10 year basis, the S&P has more than quadrupled. It suffers neither the illiquidity of these luxury assets nor the 20% transaction costs (bid-offer). In that context, it seems startling how poorly these luxury assets have performed in a period of unprecedented cheap money.

Luxury goods as investments may be fashionable, but they do need to be evaluated in the broader context of financial investments such as stocks.

 

I can hang with my 550 because I can DIY repair just about anything on the car and the engine and transmission are very solid. What to do with a 458 or 488 or later with DCT when that $30 sensor buried in the trans goes out and it's $7,000+ to fix? Can't be DIY'd because there are specialized tools required.

 

I don’t obsess over the value of Ferraris. I bought mine to enjoy it, not as an investment.

 

Excellent, if discomfiting, post on Automotive News by an automotive analyst re: a coming perfect storm around the "demographic time bomb" that is likely to hit the U.S. automotive market by the mid-2020s (and I'd guess this would apply to the European market, too). If, as they say, demographics is destiny, I'd suspect the exotic/collector/specialty car market will be similarly impacted.

https://www.autonews.com/commentary/demographic-time-bomb-awaits-automakers

 

Mark G.: I object to this witness being called at this time. We've been given no prior notice he'd testify. No discovery of any tests he's conducted or reports he's prepared. And as the court is aware, the defense is entitled to advance notice of any witness who will testify, particularly those who will give scientific evidence, so that we may properly prepare for cross-examination, as well as give the defense an opportunity to have the witness's reports reviewed by a defense expert, who might then be in a position to contradict the veracity of his conclusions.
Judge Haller: Mr. Gottfredson?
Mark: Yes, sir?
Judge Haller: Mr. Gottfredson, that is a lucid, intelligent, well thought-out objection.
Mark: Thank you.
Judge Haller: Overruled.

(Apologies to My Cousin Vinny and to the author Mark G., but it ain't happening.)

 

I certainly hope so. I'm a 45 year guy, and I drooled (and still do) over the F40. Not much I wouldn't do to have one parked in my garage. Sure I have worked on them, driven them, but damn..thats one a car I would drop big money on. The other would be the Zonda.

Even knowing whats coming down the road, if I won the big one..I would have both in my garage within a week of collecting my winnings.