Cost of Ownership | FerrariChat

Cost of Ownership

Discussion in 'Ferrari Discussion (not model specific)' started by rai, Feb 10, 2004.

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  1. rai

    rai Rookie

    Feb 10, 2004
    17
    OK I hope this isn't a FAQ somewhere.

    This is my first post. I am beginning to think about the possibility of a Ferrari in my future. But I come from a background of "ordinary" cars. For example I onced owned a Z3 and now I own a S2000.

    I am used to the usual car costs. I mean normal oil change = $35. 15K/30K/45K etc. Maintance every 2 years around $800 (or less). So for example If I drive average of 7500 miles a year I will pay around $750/year for just about everything (excluding gas).

    Now I am thinking about a Ferrari. If I was going to keep it for a long time 10+ years and around 3000 miles/year. What kind of yearly expenses am I looking at?

    I am talking about a slightly used late model Ferrari say 1999 or newer.

    For exmple a used 575M or 360 Modena.

    Thanks
     
  2. M.James

    M.James F1 Rookie

    Jun 6, 2003
    2,721
    Worcester, MA
    Full Name:
    Michael.C.James
    If you can afford a $150,000 car, in cash, then does it matter? I mean, what's another $5,000-$8,000 per year for maintenance? If you compare what you're spending now on maintenance, as a percentage of the car's base price, your $750/year on a Honda S2000 is roughly equivalent to $5,000-$8,000/year on a $150,000+ Ferrari.

    Not that you'll spend that kind of cash, mind you. But in Ferrari-land, an in-dealership oil change might run you $75. Much of that would be in a higher labor rate than what Honda mechanics would charge you if you got your oil changed at the Honda Dealership or you went to Jiffy Lube. You will NOT be taking your Ferrari to Jiffy Lube for fluid service....they wouldn't know how anyway. You'll be at the mercy of your area 'specialty' service centers that specialize in exotics, and you'll be paying their labor rates - which WILL be more than your average mechanic. A botched repair on a Ferrari won't cost you hundereds - it could cost you thousands, tens of thousands if the damage is severe enough. That higher labor rate might mean you're paying someone more experienced with your particular 'brand' of car, but you'll still need to shop around and find someone you can trust. This forum can help you do that, by putting you in touch with someone local to you who you can sit down with over a cup of coffee and discuss what Ferrari ownership will mean for you financially.

    Before you buy, a Pre Purchase Inspection by a qualified independent agent is an absolute MUST. If a seller will not consent to a Pre Purchase Inspection, take that as a hint that the seller is hiding something evil from you and walk away. I have never been lied to so much as I have been while shopping for a used Ferrari.
     
  3. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,370
    Texas!

    Rai, one rule of thumb is that the total cost of ownership including depreciation should range from $2 to $5 a mile. Say, you buy an used late model F-Car and drive it 20k miles in two years. Your total rent should run from $40k to $100k depending upon how well you buy. Keep in mind that generally a new V12 Ferrari will depreciation about 40% in 4 years, but not in a straight line. Thus, it will all depend.

    Also keep in mind that 360s have been the exception to the depreciation rule, but many folks expect them to start catching up in the near future. This means, that on a percentage basis, a 1999 360 will probably depreciate faster than a 1999 550. Of course, because you don't drive percentages, you should always buy the car you want versus what all the experts tell you.

    Good Luck, DrTax

    ps The math on a vintage car is different, but yields the same result.
     
  4. donv

    donv Two Time F1 World Champ
    Owner Rossa Subscribed

    Jan 5, 2002
    23,988
    Portland, Oregon
    Full Name:
    Don
    FYI, I just got a mailer from my friendly local Ferrari dealer, Ron Tonkin Gran Turismo, promoting their service special.

    For 8 cylinder cars, the special price for an oil change (and various minor fluid checks, etc-- normal oil change stuff) is $499.95. For a 12 cylinder car with 2 oil filters, it is $569.95.

    Note that Shell Helix oil is extra-- I think it retails for around $15/qt (yes, I know there are ways to get it cheaper).

    In practice, you will probably spend about $1,500-$2,000 in a year with no major service and no significant problems. In a year with a major service or a significant problem, expect to spend around $5,000-$7,000.

    If you are very unlucky, there is a risk you could end up spending $20,000 or more. It's unlikely, but it is a risk.
     
  5. rai

    rai Rookie

    Feb 10, 2004
    17
    Thanks for all the replies so far.

    I was wondering if the newer cars are cheaper maintance wise than the older cars. For example would a 550/575M be "significantly" cheaper than a TR512? My theory is the TR will have less depreciation but greater maintance so yearly loss would be about the same.

    Also is there an ideal time to buy a used car, for example, after 4-5 years so depreciation is slower?
     
  6. Husker

    Husker F1 World Champ

    Dec 31, 2003
    11,788
    western hemisphere
    Rai: The only way to evaluate depreciation for the V-8's is by looking at history. I have an '82 308GTSi. Market value is in the $25-$30K range, or about 45 percent of what it sold for brand new ($60K-ish). It has probably reached the very bottom of the depreciation cycle since the prices on these have been rather steady the last 4-5 years.

    If you look at the 348, the same has occurred. TS/TB market values are in the $50-$55 range, or about 45 percent or so of what they sold for brand new. Been that way for several years.

    The 355's are still plummeting, but will eventually probably settle in that 45 percent range. Same for the 360's, etc.

    Your maintenance on an "older" Ferrari is crazy high only if you allow it to be. $250 oil changes should be illegal. But if you let the dealer shops do that to you, yes, your ownership costs will run several $ thousand per year.

    There's a secret that many (if not most) Ferrari owners won't reveal to anyone...if you buy the right car at the right price, it may be the absolute cheapest car you will ever own in terms of total ownership costs with depreciation. I have driven my 308 for 2 years and am trading up for a 348, but I will easily make several $ thousand on my car and have only put about $2500 in it (including new tires!). Pretty inexpensive fun in my book.

    I can just see other chatters saying "yeah yeah, you're skimping on the maintenance." Baloney. My car is in near perfect shape. I have found a good independent mechanic that doesn't try to clean my clock every time I drive up for something.

    So here's my philosophy if you want minimal depreciation and total ownership costs: Buy the Ferrari of your dreams...but only after it's 10 years old.

    Best of luck.
     
  7. Uberpower

    Uberpower Formula 3
    Rossa Subscribed

    Feb 6, 2004
    1,043

    Is this mech in Houston?
     
  8. rai

    rai Rookie

    Feb 10, 2004
    17
    That's good advice. Time IS on my side.
     
  9. cochise

    cochise Karting

    Nov 3, 2003
    140
    Lake Mary, Florida
    Full Name:
    Dempsey Chavis
    guys, Can I ask a related question in this thread? Now that 550 prices are nearing the range of "good" Daytonas - does anyone know how maintenance compares on those 2 models.? I have a soft spot for a Daytona driver because of its lack of black box electronics, but the 550 price drop is becoming attractive.
     
  10. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,370
    Texas!
    Well, it depends <sigh>. A year ago I was hot to trot for a Daytona or a GTC when I also noticed that the prices on Maraenllos were falling, as Napolis puts it, "like keys dropped out of a Lear Jet." Long story short, I was able to get a good price on a 1998 550 and went that route. Lets see, a newly new Ferrari that gets almost 500 hp and 500 pounds of torque with traction control, ABS, a real AC, etc etc etc versus 30+ year old car that has Zeitgeist out the wazoo.

    No brainer for me.

    I had the dealership fix some niggly things, dash shrinkage, etc.

    I later blew out the under-plenum coolant hoses while on the track in New Orleans. (It wasn't my fault, honest! It was that guy behind me in a POS 328.)

    While the car was at the dealership getting that fixed, I decided to go for the new Power 2 warranty program, which meant that I had to get the 30k timing belt service done. All this set me back about $10K.

    But I now have a car with a one-year bumper-to-bumper warranty (Well, kind of, it doesn't cover the clutch. But you would have to really work at it to blow a Maranello clutch.) that I can put, say, 20k miles on with no problem.

    Even with all this, I'm still out the door for less than what it would cost for a comparable Daytona, i.e., one that I could drive 20k miles without blinking.

    In fact, door to door, I'm figuring that my round-trip costs for two years of ownership of a Maranello while putting 10k a year on the car will cost me about $40,000 or $2 a mile. This number includes an estimated 10% further depreciation on the car before I sell it.

    All this for a sports car that is all I can ask for. Some folks say that a Maranello is not exotic enough, or it is not fast enough 0 to 60, or that it handles like a brick.

    Bull crap. I love the looks of the car. Not only is the car plenty fast for the street, it is actually too fast. You will find yourself doing 150+ without even blinking. While this may be cool, if you get stopped by the wrong cop in Texas, going 150 will get you arrested, which is not cool.

    And I love the handling. For someone who grew up driving front-engined cars, a Maranello is exactly what you expect it to be. Initial understeer that shifts to oversteer while powering out on exit. Just remember to keep the traction control on and forget about late braking.

    To get back to your question, I would respond with a question. Namely, how many miles are you planning on driving a year? Vintage Ferraris do well with an occasional drive every couple of weeks, followed by maybe a vintage rally once a year. But, if you are planning on driving hard every weekend, throw in one or two road trips, and a few track days a year, you gotta keep in mind that you are dealing with cars that are over 30 years old. Dem ole bones sure do git creaky.

    So wow about it vintage car guys? How much would it cost you to drive your car 10,000 miles a year? Do you think you can do it on $2 a mile? Or is $5 a mile more realistic?

    Dr. "Curious" Tax
     
  11. cochise

    cochise Karting

    Nov 3, 2003
    140
    Lake Mary, Florida
    Full Name:
    Dempsey Chavis
    thanks Dr. Tax, I want a Daytona or 550 to drive on weekends for 2 -4 hours at a time. Also, an occasional 500 -1000 mile trek from Orlando to keys - or up to Indy (F1 time) . No track time ..not a racer, not interested in becoming one . Daytona has always been my 1st attraction - and they remain relatively obtainable and seem to be less complex than the 365GTC/4's. As you mentioned though - even a great Daytona is still 30+ yr old technology . But, that also means no computer(s) or 17 sensors to prevent it from starting at a gas stop in smallville. So, again I'm looking for a v12 as a casual owner - no hard driving. thanks .
     
  12. NoTorq

    NoTorq Rookie

    Nov 3, 2003
    29
    You know you're on a Ferrari board when Z3s and S2000s are ordinary! :D

    I'm currently "slumming it" with an S2000 myself while I save for my first F-car. I haven't given too much thought to maintenance costs (outside of being aware that they are expensive!) because my F acquisition plan is to not finance it at all. The S is the last car I will ever finance. That *should* leave me with plenty of "emergency" cash for the unplanned. I'm pretty handy with a wrench too so most of the casual maintenance (fluids, minor/moderate repairs) I will be doing myself.
     
  13. parkerfe

    parkerfe F1 World Champ

    Sep 4, 2001
    12,887
    Cumming, Georgia
    Full Name:
    Franklin E. Parker
    Too much ! But, I have owned six and will own another one in the future. Am I dumb or what ! (don't answer)
     
  14. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,370
    Texas!
    Uh uh, no way am I touching this one...

    Seriously, Frank what would you estimate the $ cost per mile to drive a Daytona or something similar.

    BTW, Cochise, the electronics on the Maranello stink. (My check engine light is on as we speak.) But you learn to ignore them. I have never heard of the car not starting due to the 02 sensor crap.

    Dale
     
  15. parkerfe

    parkerfe F1 World Champ

    Sep 4, 2001
    12,887
    Cumming, Georgia
    Full Name:
    Franklin E. Parker
    DrTax, it depends on how many miles a year you drive. The more you drive the cheaper per mile . On my Boxer, I spent about $6000 on the 30k service and $1500 on a new clutch and have driven the car about 5500 miles. So, my cost per mile has been $1.36 not counting gas thus far.
     
  16. Napolis

    Napolis Three Time F1 World Champ
    Honorary Owner

    Oct 23, 2002
    32,118
    Full Name:
    Jim Glickenhaus
    If you include cost to purchase less what you get for it the numbers change.
    I bought my TR new and drove it 115K miles. Total cost was $2.50 per mile ex gas, insurance, etc.
     
  17. rai

    rai Rookie

    Feb 10, 2004
    17
    I'm done with financing cars too.

    I make a fair bit of money and could afford just about whatever it costs. But I am a little tight with my cash at the same time. A penny saved is a penny earned and all that.

    F-car might not be in the cards for me. 4 years x $20K/year I can buy an Elise and drive it for the rest of my life and not spend $80K on it.

    Best thing for me is to rent a 360 or 550 for a few days. Either get it out of my system or get more serious about the whole thing.
     
  18. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,370
    Texas!
     
  19. Husker

    Husker F1 World Champ

    Dec 31, 2003
    11,788
    western hemisphere
    At the end of the day, there are only two legit reasons for buying a Ferrari. One, you buy the car because you can, and Two, you buy the car because you want it.

    Any attempt at pushing numbers around to justify what amounts to an irrational act is just further proof that crack is whack. It can't be done.

    Dr "Whacky" Tax[/QUOTE]


    I disagree. The right Ferrari at the right price can be a very rational act that can be quite an inexpensive and fun hobby on the whole. If you are lucky, it might be a decent "investment", too. See my earlier post. The only way you can make this work (generally speaking) however is to use my earlier advice: Buy the Ferrari of your dreams, but only after it is 10 years old.
     
  20. Mitch Alsup

    Mitch Alsup F1 Veteran

    Nov 4, 2003
    9,252
    10 years and only 3000 miles per year means you need 2 major services but only rack up the miles to amortize one major service. If, instead, you drove the car 6000 miles per year, the service costs on the car stay the same! the extra miles only cost gas, oil, brakes and tires.

    The prople who own garage queens are the ones with the high $/mile ratios.
     
  21. parkerfe

    parkerfe F1 World Champ

    Sep 4, 2001
    12,887
    Cumming, Georgia
    Full Name:
    Franklin E. Parker
    In Dec 2002 I traded my 1994 348 Spider even for my current 1982 BB512i. At the time, the FML had them both listed at an average of $75,xxx so I felt good about the trade. Now, 14 months later the 348 is listed by the FML at an average of $70,xxx and the BB512i at an average of $77,xxx. So, it looks like I made a pretty good deal even after spending the $7500 on the 30k service and a new clutch. Especially since the 348 was due for a 30k service this year.
     
  22. loungedog

    loungedog Formula Junior

    Nov 6, 2003
    291
    New Market, Ontario

    But...you could die waiting ;)
     
  23. Texas Forever

    Texas Forever Seven Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    75,370
    Texas!
    Well, I'm not disageeing with your post (how about that for double talk), but I think Rai's original question was comparing a vintage car to a newer Ferrari, i.e., one that is not fully depreciated.

    Looking strictly at the numbers, a vintage car wins hands down so long as you don't buy a fright pig. That is, the annual maintanence numbers will be roughly the same for a 1969 Daytona or a 1998 Maranello. Certain parts for a Daytona may be more expensive, but labor should be cheaper because most folks use an independent. In my case, my car was originally sold at FOH and all service work has been done at FOH (I'm the 3rd owner.). So even though FOH charges a premium, I think that it is worth it for my car.

    The offsetting factor to this equation is that I have a warranty. Moreover, I have no doubt that FOH will stand behind this warranty because it is one of their cars. Long story short, I have a safety net.

    The downside is that my car is still depreciating. Because the bottom for well-loved U.S. Maranellos will be around $90k to $95k. (Remember that under the new warranty program, I can get an extended warranty for another 4 years or so.), I stand to lose a total of $20k in depreciation.

    Conversely, not only are Daytonas fully depreciated, everbody expects them to start appreciating again. Every year, the buzz starts that this is the year. Hasn't happened yet, but surely the day will come that a good Daytona will go for $150k to $200k, instead of $100k to $150k. In theory, buy right and your Daytona will be free.

    Getting back to your 10-year model, none of this matters for me, because I'm not interested in a 1988 TR. They are great cars, but I'll gladly spend $20k (my total downside depreciation loss) to drive a Maranello over a TR. Which brings me to my point (finally you say), Ferraris are about passion. I always recommend that someone buy a Ferrari only if they really want it.

    Absent the passion, a Porsche TT or a NSX is a far better deal. Truth be known. They are probably better cars (ducking and running for cover...) up to about a 9/10th level. It is that last 1/10th of a point that is the kicker.

    For me, is paying $1.75 or $2.00 a mile for a Maranello worth it? You betcha. You say it, and I'll pay it.

    For you, probably not, eh?

    Dr "That's My Story and I'm Sticking to It" Tax

    ps Sorry for all this numbers stuff. Even though I'm a tax guy, deep down I'm still a pinny-pinching bean counter. I never did understand that stupid Xmas Carol movie.
     
  24. malcolmb

    malcolmb Formula 3
    Owner Rossa Subscribed

    Apr 17, 2002
    1,160
    San diego
    Full Name:
    Malcolm Barksdale
    I am with Dr. tax on this one. I have a Daytona and a 456MGT. They are very different cars and I love them both. The Daytona is more expensive to operate because it is old and even though it is in great shape it still needs more mainteance than the 456. I think it will probably hold its value, but who knows. The 456 is depreciating and doesnt need as much maintence[repairs] but the services are expensive. I suspect it will cost more to own because the daytona is theoretically depreciated. At this moment the Daytona has been serviced and defered maintenance from previous owners has been rectified at a cost of about $25000 so I think it will need only normal maintenance for the next 20000 miles, but I have owned enough of these cars to not count on that. I have driven it about 10000 miles since I got it so divide by 30000 = .83/mile for maintenance. I figure this car will cost about $2.oo per mile to own, maybe 2.50. The 456, based on my previous '95 456 will cost about 2.50 in maintenance and between 3.50 and 4.50 dollars per mile to own. I long ago stopped trying to rationalize this, it is something I am interested it and gives me pleasure. There is no way you could rationalize it financially compared to a Porsche, say. Why try? Maybe I will do a real analysis of the Daytona to see where I am, but I think the guess is about correct, I am less fascinated with the nunbers than you, but not much. I have other cars for transportation, if I could keep only one Ferrari it would be the Daytona in a heartbeat.
     
  25. rai

    rai Rookie

    Feb 10, 2004
    17
    Thanks Dr tax and everyone. Hope you don't mind all the dumb questions. I guess I could live with $3-5/mile total cost of ownership. Just have to hide the cost from my wife.

    Just as I said comming from a "normal" car, it's hard to imagine you guys saying things like:

    "defered maintenance from previous owners has been rectified at a cost of about $25000"

    I have to go back and count the Zeros. ha ha.
     

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