there is so much going on there I don’t know even where to start, ha! I’m not exactly in a low tax state, but at least here I had a low “entry” cost into the 296. Just registration, and California doesn’t put sales tax on the purchase if it’s a lease (only the payments themselves have tax). So minimal entry/exit costs makes it a bit less of a hit vs. some of these other markets with VAT or PST. it’s a wild time.
Ok sorry maybe I’m being a little loose with the numbers but the car is down a fair bit in a short period of time and isn’t probably going to stop soon. Sorry, it’s hard to do any proper research, as most of these ads it doesn’t say what the sticker was.
Canada is messed up right now with the luxury taxes. There is federal luxury tax (a somewhat complicated calculation), general sales tax (5%), and BC provincial sales tax (20%, on TOP of the other taxes...so yes, a tax on tax). Nevertheless, the values of the cars on the secondary market have generally taken this into account and adjusted accordingly. The 296 so far seems to be bucking that trend, presumably from lack of demand and growing supply. The car seems bonkers on paper. I personally think it looks great too (subjective, but hey...) so we'll see if the market absorbs them or if it's a continued free-fall in the coming year. At this rate I'd be looking at a 30% loss next year assuming I barely drive it...which is just silly and hurts the brand overall IMO. As great as the car is, it's not worth $100k/yr to own/drive. If values stabilize then it won't be too bad to take that hit over 3-4 years however.
That's how I ended up with the 296...the dealer convinced me. I really wanted a heavy spec F8 coupe, but allocations were all spoken for. A shame, since the ones that showed up late at our dealership were pretty generic and boring specs.
Can’t blame it on the dealer. I really liked the F8 Spider but had only owned my Portofino for a little over a year and wasn’t ready to pull the trigger on an F8. By the time I figured out I wanted one it was too late. That’s when I decided to wait for the 296 and order a GTS…and the rest is history.
I think that's the general theory now for many secondary market buyers, no difference if it's US or Canada. It's not even on some people's radar to start with, being a V-6 hybrid. That stigma will fade as people get more "used" to the technology, and to be honest the battery filling in the slight gaps from the turbo engine make it an incredible powertrain. And it handles great. So either people warm up to it over time, or they don't. But it's not like the next car coming from Maranello is magically going to be N/A V-8 again, and the SF90 replacement ain't going to be cheap. Like it or not, this is the future.
Yeesh. It's not the only one. STOs don't move here either. Things in the 300k range still move well (although not GT4RS). Getting off topic here but yeah doesn't seem to be much movement.
Fed will be cutting another 100-125 basis points between now and end 2025/early 2026. I’m not sure if another 1% or so off financing rates really matters. FFS is at what, 9.5% right now after the September cut? Does 8.25% spur many extra sales? obviously can’t hurt but I’m not sure it’s a huge difference maker. $400 cheaper monthly on a big loan/lease.
rates are at fault for the current market conditions with high end car sales. Rates effect all aspects of the economy not just car sales. Take this test, were YOU feeling more optimistic, enthusiastic, excited, motivated...and spendy when the rates were lower? Of course you were. Now that rates are twice what they were 3-4 years ago. According to my new best friend ChatGPT rates in 2021: In 2021, auto loan interest rates varied based on credit scores and the length of the loan term. Here's an overview of the average rates: Superprime (credit score 781-850): 2.34% for new cars 3.66% for used cars Prime (credit score 661-780): 3.48% for new cars 5.49% for used cars Nonprime (credit score 601-660): 6.61% for new cars 10.49% for used cars Subprime (credit score 501-600): 11.03% for new cars 17.11% for used cars Deep Subprime (credit score 300-500): 14.59% for new cars 20.58% for used cars Now, current market interest rates for car loans: As of October 2024, auto loan rates remain elevated compared to past years, driven in part by recent Federal Reserve interest rate hikes. Here’s a breakdown of the average rates for new and used car loans: New Car Loans: 5.25% to 15.77% depending on your credit score. Used Car Loans: 7.13% to 21.55% based on your credit score. For borrowers with excellent credit (781+), the average interest rate for a new car loan hovers around 5.38%, while those with fair or subprime credit could see rates significantly higher, especially for used vehicles, with some going beyond 21%. Of course rates matter. I will add a bit to this...ask your GM how many canceled orders they have had for new Ferrari builds. Its a problem. Once rates lower and people feel enthusiastic again, the world will shift.
As predicted, journalists gleefully writing about the cracks showing in the Ferrari business model. The original article has some nice images but for those that don’t have access the text is below. https://www.bloomberg.com/opinion/articles/2024-10-14/personalizing-your-500-000-ferrari-comes-with-perils?embedded-checkout=true The Perils of Personalizing Your $500,000 Ferrari: Chris Bryant 2024-10-14 04:12:54.607 GMT By Chris Bryant (Bloomberg Opinion) -- Ferrari NV became Europe’s most valuable automaker by increasing sales volumes and prices while persuading customers to purchase lots of expensive options. But now its finely tuned business model is showing signs of wear. While new vehicle orders extend well into 2026, nearly new sports cars are piling up in the used market. The Italian manufacturer has put part of the blame for weaker resale valueson the esoteric choices of its wealthy clients, which I think is a bit cheeky. Some options, such as special paintwork, are “maybe not so appreciated by the second client,” Chief Executive Officer Benedetto Vigna told investors in August, citing an analysis of 20,000 used transactions. In contrast, “functional” personalization choices maintain their value, he added, insisting overall residual values remain “strong.” No one will shed tears for the super-rich losing money because they picked a hideous supercar spec — it’s the definition of a first-world problem and a good advertisement for wealth taxes. But one shouldn’t forget Ferrari has profited handsomely from clients customizing cars to the max. Many clients are now facing a big financial hit when selling their vehicle, and not just because they picked unappealing options. A few decades ago, almost all new Ferraris were red; nowadays, the percentage is just 40%. Classic Rosso Corsa is still a safe choice for a first-time buyer, but collectors want a vehicle reflecting their unique tastes and may prefer more adventurous hues like Bianco Artico or Verde Toscana — shades of white or green to the non-cognoscenti. Ferrari is only too glad to satisfy this demand for personalization, which accounts for almost one fifth of its vehicle and spare parts revenue. This financial windfall has helped the prancing horse overtake European automotive peers in market value while selling fewer than 14,000 vehicles a year. There are several tiers for Ferraristi wanting a bespoke vehicle, including being doted on at an atelier, or participating in the more exclusive Tailor Made program in Maranello, Shanghai or New York where a team of experts led by a personal designer assists in making every element of the car unique.While the company tries to accommodate customer wishes, there are limits: Hot pink is a no-no, whereas arresting tones like Bronzo Masaru or Viola Hong Kong — metallic bronze and purple — are acceptable, for a price. Exterior, interior and technology options can easily add six-figures to the already eye-watering purchase price. A panoramic roof for the £313,000 Ferrari Purosangue SUV costs around £13,400, while special two-layer paint is £22,500, for example. An airbrushed Scuderia shield on the sides of the vehicle will set you back £9,500, while a Tricolore livery stripe is more than twice that much. These extras are listed on a plaque in the cargo area, so the buyer can show off what they’ve purchased — though regrettably the prices aren’t shown. (But if you’re curious about how to spec a luminous green Pursosangue with £120,000 of options, there’s a full breakdown here.) “Ferrari encourages clients to spec vehicles like crazy to get one of the first delivered, they invite them over to the factory and more often than not they get carried away spending fortunes on options,” Tom Jaconelli, a director at UK supercar dealer Romans International, told me. “But a lot of that value is instantly diminished.” Personalization isn’t necessarily a poor investment. Without sought-after features like a front suspension lifter (which helps avoid damaging the vehicle when driving over bumps), vehicles won’t stand out in a crowded used market. Ferrari offers a long list of ways to add lightweight carbon fiber to its vehicles, with each exterior body panel or interior element costing thousands of pounds. These carbon finishes are retaining more of their value compared with other types of tailoring, Ferrari told me; while there’s no direct correlation between personalization and residual values, vehicles “rich in customization” and “closely aligned with the car’s spirit” are “more sought after in the market” the company said. Well, maybe. I agree that lavishly customizing a limited- edition Ferrari might make financial sense, because these models tend to appreciate and some are destined for museums. But heavily personalizing a regular model might be asking for trouble because options are inherently subjective; one buyer’s dream car is another’s horror show. And good luck persuading a second-hand buyer that the gaudy paintwork you fell in love with is worth an extra £22,000. The Italian company deliberately maintains long waiting lists to reinforce exclusivity, and earning the right to purchase limited-edition models requires a long purchase history. Ferrari says expensive customization does not influence vehicle allocation, which is rather determined by when the order is placed. Still, I suspect some wealthy clients splash on options anyway, either because they’re unbothered by resale values or they’re hoping to gain favor with Ferrari headquarters and their dealer, whose commissions are partly determined by the personalized options they sell. Almost 75% of the new vehicles sold by the company in 2023 went to existing Ferrari clients, and an astonishing 40% to current owners of more than one of its vehicles. These loyal customers couldn’t lose during the pandemic when a shortage caused used prices to soar, but placing repeat orders to climb the Ferrari loyalty ladder might now require taking a hit on depreciation. Clients were required to own a £376,000 hybrid SF90 Stradale to have the opportunity to purchase a limited edition SF90 XX costing more than £670,000 (before options); there are now many of the former for sale, and they’re rapidly losing value, as I explained here. Similarly, Romans International is marketing a Roma Spider with £120,000 of options. The original owner never intended hanging on to it long-term and sold soon after delivery, taking a loss of £80,000. Strong residual values are vital to Ferrari’s business model; even loyal customers may tire of losing money on their exotic habit eventually and either cancel existing orders or decline to place new ones. While the UK market is particularly weak — second-hand hybrid 296s and SF90s are available for around 30% below list price — the US and Germany also look well supplied — perhaps too well. Ferrari said the volumes of vehicles for sale “does not suggest any critical issues,” with order cancellations consistent with historic trends; requirement to purchase multiple vehicles haven’t triggered a high volume of resales. Models such as the SF90 and Roma coupes have been phased out or are nearing the end of production, which should support resale values. Meanwhile, Ferrari is trying to ensure more of its vehicles are handled by certified dealers, allowing it to better influence used pricing and supply. My advice to prospective customers is simple: Pimping your new Ferrari can be fun — but don’t get too carried away. More From Bloomberg Opinion: * A Million-Dollar Chinese Car Is Europe’s Next Threat: David Fickling * Making EV Batteries Is for Masochists. Northvolt Proves It: Chris Bryant * Musk’s Robotaxi Reboot Buys GM Valuable Time: Liam Denning Want more from Bloomberg Opinion? OPIN <GO>. Web readers, click here . Or subscribe to our daily newsletter . To contact the author of this story: Chris Bryant at [email protected] To contact the editor responsible for this story: Mark Gilbert at [email protected] To view this story in Bloomberg click here: https://blinks.bloomberg.com/news/stories/SLBVPIDWLU68
Not sure whether the writer intended for the piece to be UK only (due to the currency listed on prices) or is just oblivious to the fact that the UK market is non-representative, but either way I am sure that the quoted executives are having conversations of heavily reducing UK allocations as if they weren't already. As I have been projecting.
As we have discussed, there is no doubt that extremely high spec cars suffer the most on resale. The insane prices for custom paint/livery/carbon is not supported in the secondary market. My GTB was a tasteful, reasonable spec and had minimal loss on the way out. My GTS has the new insane prices for paint and livery, so I am under no illusions about what can easily happen on resale now. Get ready for more “normal” depreciation that every other brand sees.
The author is UK-based but the images with the article showed growing inventory elsewhere. I know you beg to differ, but Ferrari has a major issue with depreciating new models and accumulating used inventory everywhere. Image Unavailable, Please Login
The U.S. market is better off than the UK. But there is no question the used exotic market is weak right now, across basically everything. F8’s seem to be holding up the best but that’s only because they were the last “reasonable” MSRPs. Ferrari has overpriced their cars and options into increasing interest rates and here we are. The fact that SF90s had stickers in the 800’s was (and is) insane. Same with 500k 296 GTBs and high 500k GTS.
Agree on these points. And it’s all too often and easy to hear of clients cancelling orders which appears well above norm, counter to Ferraris claim, of course.
hasn’t been much of that at my local dealer - and we are in the same market area. But of course that’s compared to zero cancellations in the past four+ years. So it’s all relative.
I see of a handful of 296s and Romas abandoned by the ordering customers who would rather risk losing $10k - $25k than take delivery. Also, Purosangue orders are available again. It's not 2020-2022 anymore, when customers were at their total mercy. Cars are sitting.
Year and a half waiting to spec a Puro…and expect to wait another 2+ years…I’m out. When no info or timelines can be provided I’ve lost interest in building one.
what got me there was the large price increase from the initial VIP/top tier orders compared to the next group. I was out the moment that happened.
With what I'm going through right now, the 32 month wait becomes a gigantic negative in hindsight if things go sideways. When you spontaneously want a new TV and then get it home from Costco but it has broken OLED pixels on delivery, there is so little invested that returning it to Costco to exchange for a new one is without a second thought or remorse. Similarly my F12 was bought CPO after a few phone calls and a few days of online browsing - when I got back to LV with it, it needed a few things under CPO and having it in the shop 10-14 days for touch ups was no big deal. But ordering a car with a near-three year wait gives so much time for expectations to build, anticipation and fantasy that when the GTB arrived defective it was devastating in a way that I'm embarrassed to admit as a grown man.
