Ferrari F40 market analysis

It's had at least three (3) owners from new.

 

Well those seem like lofty numbers but not impossible so best of luck to all the folks that own those!

 

Its only a 6 % return per year, quite modest really.. you could get the same in a savings bond...

 

I'll take it! very cool.

Bryan

 

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Unless I'm missing something, your calculations are off.

Assuming a 288 GTO is worth an average of $4,000,000 today (that's being generous, GTOs have sold for less in the past year), in 5 Years with a 6% return the car will be worth $5,352,902, not $10m.

Assuming an F40 is worth an average of $3,000,000 today (that's being generous, many F40s have sold significantly less in the past year), in 5 Years with a 6% return the car will be worth $4,014,676, not $5m.

Assuming an F50 is worth an average of $4,500,000 today (that's about right, some have sold for more and others for less in the past year), in 5 Years with a 6% return the car will be worth $6,022,015, not $10m.

Assuming an Enzo is worth an average of $4,000,000 today (that's about right, Enzos have sold for more and others for less in the past year), in 5 Years with a 6% return the car will be worth $5,352,902, not $8.5m.

We have to remember that the market does not comprise only the so-called Grade A cars, and, not everyone in the market to buy wants such cars, as a result, the values of all cars are affected by average values achieved by average cars. Enthusiasts want cars they can use regularly and do events with which means they are not interested in the super-low mileage cars which investors buy and can't drive in order to keep the miles low. The former group still outnumbers the latter group in my experience and always will because the cars were built by Ferrari SpA for the purpose of being used, they are after all, cars. As such, I have seen some investors buy super-low miles cars and later realize they can't be used which is no fun, and then sell them to buy something else like art which is easier to keep and store with no maintenance costs. Which is why you see the repeat sales of the same low-miles cars. Anyone can look at their crystal ball and proclaim anything about future values, but the reality is, we don't know what's going to happen in this dear world of ours. So my advice is, go inside the garage, uncover that Ferrari, and turn the key whilst you still can.

 

I was not talking about average cars, I own two good cars.. higher miles, 13,800 mile on my other GTO and 11,000 on the other F40... so I totally understand the spread and prices of what I paid for the 2 other examples.. The spread has been the same now for 20 years, so from a charting point of view the trend is the same.
I never said an F50 would be 10 million or an Enzo at 8.5 million..so I am not sure where you got those numbers from. I said 8.5 and 7.5 respectfully, which is totally different to what I stated.. Maybe your calculator needs the batteries replaced..

 

The given future values, CAGR, and present values are inconsistent together. For the future values and 6% CAGR mentioned, the present values will be GTO $7.47m, F40 $3.7m, F50 $6.35m, Enzo $5.6m, which they are not.
Actually the inconsistency can be seen from the outset in the forecasted future value of GTO at $10m vs F50 at $8.5m. That cannot be the case for a 6% CAGR (or any other number) for both as it would mean, wrongly, that the GTO is today more expensive than the F50.

 

It depends on which cars we are talking about... a GTO recently traded through curated and a customer in Puerto Rico for circa 7 USD... I'm not sure a F50 has traded at that number... but maybe it has... I saw a F50 at auction recently traded at 5.4 USD this is the reason I gave for a GTO''s a higher valuation... also 3 GTO ( not grade A ) so miles around 18 -30 miles have sold in the last few months in the UK for circa 4.5 - 5 million... I paid 4.8 USD for my grade B car so that is the basis I used..

 

The same basis was used for my 2 F40's.. I have a grade A car 1560 miles and 3 owners original car... I value this car at circa 3.4 million USD and I have a Grade B car, nice owners and original but mileage is higher.. so I value that car a 2.5 million USD..

 

Yes you did indeed say the F50 would end up at 8.5 million not $10m (I missed that, perhaps lost in a fog of lofty numbers high up where the air is thin, I became light-headed), but the fact remains that based on current values, in your suggested 5 Years with a 6% return, the car will still be worth $6,022,015 as I previously calculated, not your inflated figure of $8.5m which represents significantly more than the 6% you claim.

Yes you did say the Enzo would end up at 7.5 million not $8.5m, but again the fact remains that based on current values, in your suggested 5 Years with a 6% return, the car will still be worth $5,352,902 as I previously calculated, not your inflated number of $8.5m which represents more than the 6% you claim.

The point is, your claim that the predictions you made represented "only a 6% return per year" over a 5 year period, is mathematically incorrect, and by a large margin, off by $5m with the GTO, $1m with the F40, $2.5m with the F50 and $2.5m with the Enzo. This has nothing to do with the spread of values, and it really doesn't matter wether you are talking Grade A cars, Grade B cars, good cars, or nice drivers, or project cars, 6% over 5 years is 6% over 5 years.

In any case, 10%, 0%, 5% or 10%, it's all pure speculation, predictions are just a forecast of what may or may not come to pass.

 

Of course grade A and grade B would have a factor in any calculation or are you saying all F40's carry the same value? so lets base the numbers on fact if that helps with the math... Romans in the UK have a great Enzo that my friend is looking at, its around 5 1/4 USD my math says thats around 7.1 million USD not 5.3 USD at 6 % compounded but again maybe its my calculator that need batteries .. Again it's all speculation but that has been this market now for 2 decades. They have rightly or wrongly become a store of wealth and nothing is going to change that anytime soon, with inflation out of control people have to buy assets and the dynamics of supply and demand fuel this.. that's why I bought 2 more cars over the last 12 months, money is becoming worthless.

 

Moving along to F40s in today's market and speaking of nice drivers, although we have tended to specialize in low-mileage examples up to and over $3m, I am being asked more & more to facilitate something different for those who like to drive, so we can provide two separate European F40s via Private Treaty, both well maintained but with mileage, one at 49k miles at 1.565m Eu plus commissions, the other at 31k miles at 1.875m Eu plus commissions.

These are examples of F40s that can be enjoyed and taken on events without concern for mileage preservation, interested end-user principals contact me directly offline at (714) 928 5626.

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These are 100 % cheaper compared to the F40 that just sold at auction for 3.4 million, 2 for the price of 1.. apart from the mileage.. what's the catch ? or is it the mileage that makes the difference so big.

 

Of course the mileage is a huge contributor to the price disparity between a "nice" car and an exceptional car... You acknowledged so much in one of your earlier posts:

The car you're referring to is 57495, which is very likely the lowest mileage example of the 288 GTO extant... and it was sold for a value of ~100% greater than some otherwise nice, albeit higher mileage, 288 GTOs. Let's be clear, the price of 57495 was far more of an outlier in the 288 market, than a "normal" example at ~$3.5mm.

 

I must say it’s nice someone agrees that mileage is the number one factor on an exceptional example that’s makes a car double the price.. it’s refreshing to hear.
I not sure Joe would agree on your views on 57495 he has a very different view on this GTO.. not sure what kind of GTO you would get for 3.5 million.. I can only guess ..

 

so i get to drive mine AND pay less for insurance ! BONUS !

 

I didn't say that mileage was the number one factor; just that with the example you cited, it was.

And I don't think I have a view on 57495 besides knowing that the mileage was the motivating factor for the buyer - in this particular instance - and he felt that mileage warranted a premium of ~100% over an otherwise 'nice' 288.

To be fair - and I will agree with Andrew, that - I think a lot of buyers use mileage as a proxy for condition, at least when scratching the surface of evaluating a car... As we all know, it's not always a reliable metric, but that doesn't seem to prevent some buyers from prizing it more than it warrants... And as long as those buyers are operating in the market and - in some instances - willing to pay 100% premiums for ultra low mileage examples, then it's a criteria that affects all cars.

 

Yes mileage is not a good indicator of condition, especially when those pesky speedo relays at the back of the gearbox sometimes accidentally get unscrewed and then the speedo and odometer don’t run …

 

I could not agree more, this is why all the boxes need to be ticked, mileage, Bullet proof provenance, no questions or gaps that need answering.. That's why these cars achieve the numbers they do.

 

What you are saying is 100 % correct, its always the first question asked, as you say an opening proxy that buyers seem to feel that the mileage dictates the condition, which we all know is not the case as highlighted below and the many numerous cars that have had their speedo disconnected.. I remember my F40, the Ferrari service agent even asked me if I wanted to disconnect the speedo once, which I found quite unbelievable .. That is why after the first question all the other pieces have to be put together.

 

The catch is, you can actually drive these without depreciating their value, if you can call that a catch, and yes, mileage does make that much diffrence, which is why you want to think carefully about wether you really want to own a super-low miles car you cant drive. This is where we are.

Correct.

Thoughtful post, I agree.

That said, I personally do not believe the story of that GTO achieving what it being represented as achieving and I have my reasons for this, that said, I'll stand corrected if I can independently corroborate documentation which proves it.

My view on that GTO is quite simply that the last time you posted images of it's speedometer, I pointed out to you that this GTO has had an odometer change (obviously leaving true mileage in question) and that the speedometer in it was from a 328!

You say this, but as an example, with GTO 57495 which you seem to uphold as the Holy Grail, not all the boxes are ticked, I mean, if you buy a GTO touted as one of the lowest mileage GTO extant and it comes with a replaced 328 speedometer and no paperwork stating when this was changed or at what mileage, and the original speedometer is not with the car, then provenance is not bulletproof. Similarly, with F40 84116 which you mentioned as a 1-owner car going off the auction writeup has had at least 3 owners (not the 1 you stated) from new and some of it's early life is unknown, so there are some questions or gaps to be filled.

Here's a car I inspected on Wednesday with all the boxes ticked, mileage, bullet proof provenance, no questions or gaps that need answering:

A USA F40 with just one single Southern California owner from 1992 when he took delivery, just over 900 miles, meticulously serviced from new always by Ferrari, an all-original time-warp reference machine, perhaps the best USA F40 which I have personally seen in 25 years, still shod with its original Goodyear Eagle GSAs, probably with Maranello air still in them.

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I don't hold 57495 as the Holy Grail GTO for the reasons that you have stated, also having the invasive Federalization process carried out. But twice now it has carried a hefty premium based on the mileage, I turned the car down this time because of these boxes not being ticked,
Re the F40 I have no record of this F40 in my data base so I took the auctions statement at correct, so I will update my files, thank you.
By the way the 900 mile F40 looks fantastic, could you share the chassis number please.