F prices during recession

Good question. I think good old fashioned demand driving up prices slightly isn't a problem -- that's different than speculation, which is what we saw in '89.

 

everything is cyclical, and the past has a nasty habit of returning - especially when it comes to luxury items as excessive as f-cars.

just like in the 80's, values will decline first on the most marginal cars, then on the cars owned by those without significant net worth and liquidity (margin players) who have to sell to meet other obligations, then on the market as a whole

BUT, if you never sell, you never take a loss.

Keep your insurance up and the agreed upon value very high

 

its a very interesting thread, we should revive it every 3 months or so to get afresh take from the crew..


BTW i thought the term RCH only existed in shipping.. good to see i was wrong..

 

I believe that is kind of on target with the thread, but let me pose this question.

As most people agree that Ferrari's tend to follow a cycle (depreciate, bottom out, climb), I wonder if that still holds true. The 308/328 was around for a long time, and thus unique in the market, IMO. As of now 328's and 348's are roughly the same price (I could be wrong) but I see the 328 as climbing in price soon. It just has a charisma to it, plus people that grew up wanting that car can now afford it. It should push the price up (barring outside factors).

However, following the 308/328, Ferrari shortened the production cycles of its cars. There was the 348 (not nearly as loved as the 328), the 355 (a solid improvement over the 348), the 360 (some would say over built, but mechanically superior), and now the F430. Since there where improvements made so quickly, are these cars some how linked in value to the next. (348/355/360).

Given the rapid model changes (compared to earlier) and frequent improvements in each model, I would assume the 348-360 are joined. As the value of the 360 drops, won't it act to push down the value of the 355 and 348 as well? I personally love the 355, but how realistic is it that the model will ever sell for as much as a 360? So does the traditional cycle still occur with this senario or is it fair to assume that as the 360 prices drop so will the two previous models?

Where there every be a point when the 355 has a higher value then a 360 (possible I suppose, not likely) or the 348 has a higher value then a 355. So while it is nice to look a what has happened previously to determine the future, I really think its a different playing field with the modern cars. IMO, the 328 is the last truely collectiable Ferrari (and one that I see climbing rapidly in value in the future). I think the 360/355/348 will be playing by a different set of rules.

 

Excellent write up and analysis. Of course, I'm biased; I own a 328.

 

10 years ago, my 308 was 35k. 8 years ago I paid 62k for my 348. The 308 is in solid condition and could still pull around 30, where as the 348 MIGHT get 50k. That shows me that the 308 has already taken it'*****. Maybe 10% dep in 10 years?

IMO, anything 328 or older have already taken the hit. But some of these cars are extremely inflated...not F-40 or GTO style, but how about the Dino. Love the car, but 10 years ago you couldn't give the little things away. Wish I would have bought about 10 back then.

 

Todd fondles all the curves. He would know.

 

who cares

 

LOL.... Fondle is a little mild, isn't it

 

i love this topic. had to go out to the tool shed and dig up some old du Pont Registry's just for fun.

November 1989. cover, BMW Z1. majority of the F-cars listed don't have their prices in the ad. but here's a few that do;
- 1988 Ferari Mondial Cabriolet. red/tan 4,441 miles. $200,000 FIRM. the description ends with "could this be the next million dollar spyder? (page 49)
- 1973 Ferrari 365 GTB/4 Daytona Spyder s/n 17047. red/tan 8,9000 miles. $2,000,000. (page 63)
- 1989 Ferrari Testarossa. yellow/black 500 miles. $325,000 (page 65)

February 1990. cover, 348 tb. same situation. most of the F-cars dont list their asking price. the only ones that do;
- 1967 330 GTC. 50,000 miles $350,000. (page 6)
- 1982 308 GTS. red/black 16,000 miles $60,000 (page 6)
- 1987 Ferrari Mondial Cabriolet. red/tan $135,000 or trade for any exotic. (page 46)

jump forward two years...

October 1991 cover, Mondial t Cabriolet. most F-cars now have their asking prices listed. here's just a few;
- 1984 Ferrari Mondial Cabriolet (euro) prugna/creme 12,000 miles $55,000
- 1988 Ferrari 328 GTS. red/black 23,000 miles $75,500
- 1974 Dino 246 GST. s/n 06134 red/black 34,000 miles $90,000
- 1987 Ferrari Testarossa s/n 68359 red/tan 5,400 miles $129,000




Joe

 

These threads keep popping up and invariably some people say Ferrari buyers are not affected by recessions. This is total bull. A large portion of buyers are small business owners and recessions reduce income. Period. Even if someone is lucky enough to continue doing OK, fear of a downturn will make a business owner reluctant to stick his/her neck out for an exotic until conditions improve. Then, once prices weaken, more people sit on their hands waiting for a bottom. Add to this the fact that money is harder to borrow and you've removed marginal buyers from the market. If you have just 20% fewer potential buyers, prices collapse. That's all it takes. I'm sure that in 1989 there were plenty of people around saying Ferrari buyers would not be affected by an economic slowdown. We know what happened to those who bought with that mindset.

Dave

 

When I was not yet 10 years old I already knew there were faster and more powerful cars than many Ferrari's. Some of the Pontiacs I had as a young driver would have sucked the windows out of most Ferrari models well past 100 mph. But I didnt want a Pontiac, or anything else that was stamped out of tin and thrown together in hap hazard fashion, its just thats all I could afford as a kid. Its like the Turbo craze, so what? If all a guy is after is plain HP you can surely find a lot more of it a lot cheaper than almost any Ferrari.

The guys that buy a Ferrari dont really care if the neighbors Mustang, Mitsubighi Eclipse or EVO down the street can blow his doors off 0-60. I would compare it more to wanting to own a fine rifle, like a vintage Weatherby for example in 25.06, compared to your neighbor who just bought a 7mm Mag at Walmart. The Wally World Magnum is definetly a lot hotter piece, but its not a Weatherby.

And a recession wont change it any. If Ferrari's become more affordable, more people will be out driving them. There is always a silver lining somewhere. But I do think that so many lost thier a$$ in the late 80's from speculating vintage cars up at auctions like fine art, its squelched the run away inflation of them for a time. It could take off the other way tomorrow though just as easily and housing and cars will go through the roof again. Flip a coin, youll get just about as good an answer about tomorrow as anyone could give.

 

As far as what we've seen in the runup in prices lately, it's looking a lot like deja vu. Any Ferrari, even the untouchable supercars, are not immune to an economic slowdown if history repeats itself yet again. All you have to do is to trace the historical selling prices of 250 GTO's, 275's, 288's, etc. to get an idea of what's probably going to happen in the future. Perhaps it could be different this time, but I doubt it.

For a second opinion, read this article from Sheehan. It has not been a stable ascent. It is a rollercoaster.
http://www.ferraris-online.com/pages/article.php?reqart=SCM_200710_SS

 

thanks for the link. very informative. gawd i find this stuff facinating...

joe

 

Indeed. My own Mercedes E500 would probably leave my 328 in the dust.
But that is NOT why I have dreamed of owning a Ferrari since I was a kid.
I get kids in their computer-enhanced Hondas pull up at a light to 'race' and
I just go on my way and let them race off. It ain't about that. I'm happy
to drive the way I want to, get on it when I want to, and drive a mystique
100% of the time when I'm in the Ferrari.

And yes, I bought my 328 during the current 'recession' with extra cash
that I had laying around! Just did taxes and my biz is up 14% over last
year, and was up 29% over the year before, and 16% over the year before
that. And I'm fully tracking for another 10% increase in 2008.

Jedi

 

I recall reading an article a while ago which summarized a lot of the known 250 GTO trading prices for the past 3 decades or so. Unfortunately, I don't remember where I saw that. Describing it as a roller coaster is an understatement.

 

Let me pose this question...we all grew up either loving Ferrari's or wanting one. Most of us purchased the F-car that we could afford when the time came. But this was due to their outlandish styling and the "Ferrari mystyque" that we had of the company growing up. Hell, when I first saw the F-40, I thought it was God's image re-incarnated on earth. But in my opinion, the styling is not as far ahead of the competition as it was, and although there is still the "mystique," I don't think with the increase in production it will be as much of a factor. Don't get me wrong, every kid out there one day dreams of owning one, but is there a new brand out there becoming the Ferrari of the day?

Don't want to ruffle any feathers and don't feel like starting an e-argument...just a thought that I've had and would like to know what the rest of you think.

 

One thing that everyone forgets: the 430 is MUCH cheaper to own than the earlier cars. No belts. No 10k (never saw less than that for service on either the 355 or 360) service every three years. I don't see the 430 dropping anywhere nears as much as the earlier cars, because of that.

Art

 

Good post!

 

Chains are cool. No doubt.

 

Bro, I understand what your saying, but the bottom line is that a decent 430 is upwards of the 200k range...do you really think that it will hold this value when new F-cars will no doubt be in the same price range as 430's? It's all economics...if a 355 drops 10%, thats a 7-8k drop. If a 430 drops 10%, thats a 20-25k drop. Plus, you have the newness factor, which means every year that a new models comes out, the price will continue dropping at a significant rate. Just realize that these cars are depriciating assets. Any newer owner is going to get burned. It just comes down to how much. The newer the car, the more you losing with depreciation. It just amazes me that if people on this site can afford these cars, then obviously they have enough business sense to understand the depreciation...

And if anyone thinks that F-cars aren't overpriced, think about the fact that 430's cost as much as a rental property in most sh&^%y urban areas...

 

Actually, the 430's are not far behind the average house price in the USA
And the 12 cylinder cars are way above it.

http://www.economagic.com/em-cgi/data.exe/cenc25/c25q07

 

+1 from a small business owner and 360 spider owner.

 

This may be relevant - UK 246 Dino data
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+1

Many owners would prefer prices keep goiong up, but savvy ones are looking to unload cars that have appreciated rapidly in recent months. Stay tuned; we'll see if the upward spiral continues. It did for a while in the last major recession, then collapsed.