296 Values and Used Market

I know people that have a massive fleet of appreciating toys. Depends what pond you are playing in.

 

Its basically the same pond. Using Ferrari as a case in point, these guys you speak of have had to lose a ton on depreciating models to qualify for the appreciating models, some of which allow catch up, few exceed, but overall the losses are only minimised, and then all they have is a ton of cars they are too scared to put miles on as that will wind them back to square one in a loss position.

 

Hah ya, not talking Ferrari.

 

Fair enough then. Thought you had Ferrari mixed in that bag (being a Ferrari chat).
Guys chasing the elusive Ferrari grail cars, who fail to succeed, are the worse for wear (financially). There is never enough catch up, to catch up. Sometimes its just better to buy the car and accept its unlikely you’ll do well out of it. I think 296 falls into this catagory- so it may as well get driven without worrying about the odometer, because the depreciation hit is going to be one that is not forgotten easily (unfortunately). And this is why its better purchased with disposable cash.

 

My whole life s a "depreciating model."

 

So if the 296 out of GB is cheap, how crazy is it to have a right hand drive in the USA?

and is it a big deal to import?

Is it as bad as they make it out to be in "rain man"?

 

The rules have dramatically changed since the 1980s...importing a car to USA (outside of those from Canada, to some degree) is non-trivial/impossible until it is 25 years of age then it is trivial. So importing a 'new' car from another market to USA is likely impossible outside of some very limited show and display (which is not simple to obtain) and manufacturer exceptions. Especially if that same car is also made for the USA market, you are in a better position for a car model + model year never made for the USA market but then it can cost well more than $100K to get a special type approval and take years to acquire not to mention potentially serious modifications for DOT/EPA compliance.

 

@JTSE30 put it better, but basically it's not a big deal to import because...there is no deal. It might be a model we sell in the US, but it's still under the 25 year rule and it was built to that country's safety standards.

 

Not to worry about buying in the UK and importing into the US. There are currently 167 296 GTB’s for sale on Cars.com, up from the 120’s a few months ago. This is a non-functioning market that will eventually crater and you’ll have your choice of discounted vehicles.

 

Seeing that there are probably 3000-4000 296 in the US, is 167 cars for sale really a sky is falling scenerio?

I think people lose sight of the fact that Ferrari is on pace to make 14k cars this year. The times of low production numbers which equates to low resale number are long gone.

When the 458 was being produced, Ferrari only had annual production of 7k cars. It’s double that now. Doesn’t logic dictate that there will be more cars for resale??

(this in NO way is meant to say that cars won’t depreciate. Cars, including Ferraris have always depreciated before covid. Some have a higher depreciation curve than others but this is nothing new or unusual).

 

Those are just the ones advertised. I know some dealers have models that aren't online

 

A couple thoughts or questions

• Even though Ferrari is making more cars, what does the production per year of 296 GTB look like compared to 458 Italia. I get they are making more total cars but is the extra because of additional models offered?
• I have studied the used US GTB market for a while and it seems pretty clear to me that at reasonable ask price (not 10-50k above sticker like some still are) the cars do move. I would not consider for a car that is 1-3 years old now getting MSRP or a bit below is anywhere near sky falling
• I don't fight the fact that prices are dropping but I also don't know how normal that would be, again for 1-3 model year old cars
• I think people are still thinking 2020-21 Covid year pricing is still valid and for the most part it is not and seems to have returned for the moment to a more normal pattern.

 

Some very good points.

In regards to production volume of 458 vs 296 it is educated guessing/speculation since Ferrari doesn’t release exact numbers. The data shows that there were a total of about 15k 458 (italia, spider and speciale) over a 6 year production run.

The data says that 43% of Ferrari last year were hybrids and that will be 51% this year. That would be the SF90 and the 296 and I think it’s safe that more of those numbers are the 296. If we take 14k total cars this year and 51% are either SF90 or 296 that would be 7k in just one year. For arguments sake let’s say 50% are the 296 that would be 3500 each year and over the last 2 years that would be 7k. That is a much larger number than the 458 volume.

Having owned and sold a 458, 488 spider, 812SF and a Pista all during their production runs, I lost money on each and every one. For example my 812SF was 2 years into the production run and it sold for about 60-70k off msrp. My Pista was sold (pre-covid) and it took 4 months to sell and was 45k off msrp.

So pre-covid the market was pretty consistent. The first year of a new model the cars went for above msrp the second year they settled in at msrp or just below and the third year they were below msrp (sometimes significantly below but it is very option dependent).

I see the 296 market as exactly what you stated. It has returned to a normal, pre-covid market. When I eventually sell mine I fully expect to take a big loss and I am fine with that. I had a great run buying/selling cars during covid but that was a once in a lifetime anomaly. With the exception of covid, everytime I bought any car I knew it was worth less the day I drove it off the lot. Sometimes that equates to 40k off and others may be more/less.

 

Good post @mkraft3003 you're spot on

 

I don’t see the market as normal. It’s clearly depressed and with increasing numbers of hybrid models for sale, with very poor returns being achieved in relativity to the original price paid, further confirms its very much a buyers market in the resale sector. Added to this dilemma is the overproduction factor and the general concern over the reliability of these hybrids which were/are being sold new at far higher prices than previous ice models. To compare todays market with precovid era where leading up to covid the market was also in a slump is overlooking the above realities.

 

All the talk about value sliding is simply stating the obvious about a production car that is not a limited edition .

If you are buying on finance and cannot take the depreciation as you may have to top up the residual to flip the car , simply do not buy it.

Buying a car for tax right offs is simply madness , the right offs will never make you whole on the car.

Buying a car to enjoy is the only reason you should consider an exotic .

 

100%. Someone thinking there is a “return” on a depreciating asset probably should be buying something else.

 

Well then, I'm out.......
.

 

Well. If the “return” you seek are smiles than these are the perfect toys for that.

 

I would have the serious under on 3000-4000 296 GTB’s in the US, but if that’s correct, then 167 for sale is not a large number.

 

I’d take the under too. Even if it’s 2000-3000, which may be a safer bet, isn’t 167 for sale still a small number?

I probably way over shot the runway with 3-4k. If they have 3811 total car in the America in 2023 and 4k in 2024 that is total production for all models of 7811. If 43/51% (2023/2024) of those are hybrids that would be 3678. If it’s a 50/50 split between SF90 and 296 that would be 1839 per year or 3678 for the 2 years the 296 has been out. Now reduce that number by Canada and Mexico and you are left with US.

Wouldn’t it be so much easier if Ferrari provided actual numbers instead of the mental gymnastics!!!! Anyway you look at it, they are pumping out tons of cars. No longer is a Ferrari a rare sighting in a large city.

 

This is also stating the obvious, particularly the last 3 paragraphs, however the key point behind why there is now such heavy depreciation being realised is for other reasons - as previously stated.

167 cars for sale vs numbers produced doesn’t increase the number of buyers in the secondary market.
Used buyers were always good for paying up to a certain figure, above which sales would become increasingly difficult or impossible to get over the line at the asking prices, particularly when used buyers never saw value in these now ridiculously high new prices to begin with.

 

It’s still a small number versus total production, but it’s not a small number of $400k cars for sale. One of my guiding principles in life is: ‘people always want what they can’t have’. So when Ferrari rolls out a new model by having their dealers throw ‘invitation only’ events and talk about ‘limited production’ and ‘waiting lists that are closing’, people naturally gravitate to ‘I have to have one’. But they’re not thinking logically, they’re thinking emotionally; or they’re thinking worse case they can always get out at MSRP because it’s a Ferrari…or in some cases (which never made sense to me), they’re thinking I’ll buy a 296 because I want to be first on the Puro list. But used buyers don’t have any of that emotional baggage. They’re seeing a market where inventory is increasing and they can get any one of these they want…it’s all price dependent. So they’re going to hang back and throw in low ball bids until a seller says done.

 

No, it's just a question of ego! In life, we must buy what we want, not what we have to buy in order to have a futile and ephemeral importance in the eyes of the other.

 

Anyone that wanted a new 296 could get one, you just might wait a bit. People in the secondary market are looking for deals so if priced right they will move. There are a lot people who thought they could drive it for 6 months and flip out even or for a profit and those people are getting weeded out as well.

New cars are stacking up because of cancelations as well. Losing your deposit is better than losing 100k by taking delivery.