360 - can i afford it?

Like you said, these cars are all about passion. But don't get too carried away. Rather than talk about how much you have in the bank or how much you have to make in order to own these cars, I would go with how much you can "commit" annually to have a 360 in your garage. When I say commit, the money is not all necessarily go down the drain. It's what you have to budget, and still be comfortable "losing" that amount annually, without affecting your retirement funds, college funds, and your lifestyle.

I think with 360, I am not too sure about the depreciation curve, but I would say "commiting" $15K(for service, depreciation, insurance) a year is a good start, given cash purchase of a 2000 Modena.

 

My rule of thumb on cars, art, antiques, etc...is if I can write a check and not miss the money then I don't mind buying it...if I really want it and will enjoy it.

 

When I was younger, I leased cars, and ran them through my business. That way I was able to deduct the payments against business income. That's how I started being able to afford Porsches and Mercedes. It's only over time that I became affluent enough to start paying cash for cars.

A guy has to build his wealth first. He has to invest his money and have it compounding for him. My opinion is if he hasn't done that he shouldn't be buying something as expensive as a Ferrari...yet. I first started wanting a Ferrari in the 80's. I didn't get my first one until 2004. The cars changed, they got better, and I didn't lose my jones for a hot car. I do think I enjoy it more now than I would have then, because my life is more balanced.

Just my opinion.

 

I can imagine mate!!

Very cute!!

 

If you are going to own a Ferrari you need to be able to take a big hit, say 20k if you have to, and not hate the car afterwords. If a 20k hit is not a big deal buy the car. If it is or you don't have it don't.

 

I would agree. I tell people any visit to the shop is a few k. On top of that you have to be OK with the random $15k bill. You don't have to like it but you have to be able to pay it and be ok. Maybe a 20k number is better than 15k but something in that range.

 

A factory reman transmission is 15k. A new clutch is 5K. Brakes are 2k. Anything goes wrong and one of the belts go off time who knows? An ac compressor goes? An air conditioning control unit?

 

It may be crazy, but those are the kinds of costs you should be budgetting. Just a minor service is $1-2K. A major service might be $5-7K. Anything that involves engine or transmission work could get into 5 digits. Search for F1 pump cost and you'll find that kind of part is close to breaking 5 digits on its own. If you're not ready for that, then you're not ready to own a 360.

 

It doesn't mean that you will get hit with that 15k bill but it could happen. If you can't live with that you can't affod the car yet.

Simple example, my car is now 6 years old so it is due for a 30k service. Brakes are pretty worn and the clutch is about gone. None of this is premature, just maintenance. Add on that I suspect the cam variators haven't been done and it starts to look like real money. I haven't gotten an estimate yet but I suspect 10k for that stuff. Plus, if they find anything else, oil leaks, etc. I am at 15k before you know it. This doesn't include any catastrophic failure.

 

you can check to see if the variators are done (in most cases) by looking to see if there is a VD stamp on the cylinder heads. According to FNA's TSB, they are supposed to stamp a "VD" on each head after doing the variator job. I'm attaching a photo showing where it's supposed to be located.

I'm also attaching a photo from my car, showing where it is stamped (it's on both sides (both heads), btw). If you look closely, you can just make out the faint "VD" stamped into the head there.

Ray
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Cheers Ray, they reckon you learn something new everyday.

 

You can also call FNA direct and they will tell you if they have been done, this is what I did. Buy your pads from Ricambi, they are only $185 for the fronts and 1 hour labor tops. Clutch seems to be the most expensive thing on your list and that can vary depending on what needs to be replaced. My car had full clutch replacement before I purchased to the tune of $9k at Lake Forest Ferrari. Yikes!!!
My cam, belts, tensioners, bearings and pulleys cost me $2k at FOW. Not to bad. Fluids $800.

Robert

 

And make sure you can afford a 20% 401(k) hit and a 20% hit on your real estate without having to raise cash by selling your F-car in a financial mini-panic.

 

IMHO if you are just starting out you might want to look at a 308, 328, 348 or 355 and see how you "like things". Not just the car, but the community and the repairs. Keep the difference between the purchase price in the bank as your "Ferrari Rainy Day Car Fund." This I think is the best way to get into a Ferrari and test the waters before putting out 100K+ on a car. I know plenty of people who moved from a G35 to an M3 and freaked out when the bill was $1700 for a schedule 1 and $900 for a schedule 2. They dumped it shortly there after. You can do a Ferrari on a budget, but see if it is what you really want before you make a large commitment.

.m

 

Agree with this, in fact I'd NOT include the 355 in that list since the cheapest reasonable condition 355s are $70k, so with tax and reg you are out $75k before you add the first quart of oil.

The 348 targas at $45-$50k are the "get feet wet" bargains IMO for a fairly modern Ferrari.

 

Robert, are these amounts parts & labor, or parts only?

 

I hope not but this sounds like the voice of experience.


Ray, thanks for that tip. I had heard that but had forgotten. I will check it out and see. Theoretically, there is a blue or green dot (forget which) on the variator. If I get the belts done they can pretty easily tell then. I could theoretically put the belts off since they were done not long ago but I am thinking I would do them as part of a typical 30k service.

 

I miss quoted myself!!!!!! LOL!!! The final bill parts,labor,blah,blah was $2500. I actually have a thread on the whole experience. Pretty intersting how FNA steps up to the plate!!! LOL!


Robert

 

I think I may be. I started 2 years ago and just now am i finally looking to close on a contract and start my first project. It's tough when you dont get born into a company or anything like that, but I know many people that were smart enough to think outside the box and not listen to their parents when they wanted to go the entrepreneural route.

I am in debt right now and all my focus goes into building the companies investor base. We just recently signed a letter of intent with a formed morgan stanley vice president who's brother in law raises capital for bear stearns. He is leaving to do independent private equity investing and is thinking about coming on board to raise some for us and throw us a couple bucks himself. We are also in the middle of putting together a reg D capital raise to start purchasing distressed debt portfolios of non performing notes and bank owned property that has been the biproduct of the mortgage turmoil these past months. Even if we broker 1 deal out, it will net a good chunk of change.

I used to wish, but now I am acting. I am only 26 and always wanted me be a millionaire before I was 30. Not to buy Ferrari's but to be able to have a flexible life. However, there is a personal reason that has to do with my grandfather which is the reason for why i would want to own one before he passes. It's all about living within one's means. If one's budget shows owning a ferrari is affordable, its affordable.

$300k a month is serious business. I know someone that makes $14M gross a month. He owns 14,000 rental units in 4 states and they rent at an average of $1k a month. I dont know what his debt service is, but he owns 8 Ferrari's including an enzo and has 3 houses on his property. i dont even know how many cars is in his collection now, but it never ends.

Its all about thinking big. Most people that do not become wealthy do not think big because they dont think it is possible. I am interested in knowing what business he is in thought yielding 300k a month. I also agree with the people that dont want to buy a Ferrari because they say its a waste of money, makes me sick to my stomach. These are the sample people that blow 100k on 750iL's and say its a conservative car lol.

 

I know it's already been said, but I'll repeat it in a slightly different form. You're not losing the money, just the opportunity cost associated with the capital, and the depreciation and maintenance. So your cost of ownership isn't your committed capital, but what you will not earn with it. Because when you sell it, you get a good chunk of your cost basis returned to you for investing or whatever purpose. It's a price I'm willing to pay.

Remember, try to get the best deal going in as you may not get the best deal going out. In the meantime, have fun.

 

You are correct I think. Most people can't imagine big stuff, so they never try. When I started my business (the one that made $300K a month), I was only shooting for $40K a year. Mainly I was just doing something I enjoyed and it ended up being larger than I ever thought possible. Now, after going through that, I see what's possible out there. Half the battle is realizing what sort of money can actually be made in the world and realizing how large the world is. Too many people think on a small scale.

Like you, my goal was to be a millionaire by the age of 30. I hit it by 31.

Making a million dollars a year breaks down like this: there are basically 50 weeks in the year, 5 days per week (M-F). That's 250 days in the year. So to make a million dollars, you need to make $4K M-F, every week of the year. So if you have a 50% profit margin, you need to gross $8K per day M-F, each week without fail. When I was making $300K a month, I think I was making right around $15K per day and had margins of nearly 95% profit.

With any business, it's a good idea to do the math and make sure it holds water. So if you need to make $4000 per day, and you are charging $19.95 a month for something, that's $1 per day. Therefore, you'd need 4000 paying customers. That sort of thing. If you are providing a product, then you need to sell X products per day at X profit margin, etc, etc.

Always run the math. I failed to do that when I was younger and had one of my companies fail after only 6 months. If I had sat down with a calculator before going into that area of business, I could have seen making even a small profit was just about impossible

Ray

 

Nope, you're WAY ahead of me. I'm a lowly Engineer working for a meager living, have no company, and my contact at the bank is a teller........she's really cute though


I've been saving for two years, and have 5 years left if I decide to go all the way to a 360.......