Are Ferraris too expensive?

The 1972 Dino may have been about $12,000 but I cannot recall a Daytona under about twice that. A Porsche 911S that year would have been about $10,000.

 

supply/demand = crash

The up side is 'good times' for real world drivers......IMO.

I'm going to build a garage........

 

I would agree with your agreement.

I'd also add that the OP mentions the Daytona and then asks about Ferraris in general. I would say that a $300K Daytona right now is not overpriced, because it is a handmade classic that can never be duplicated.

At $300K, a 599 or 458 is hugely overpriced, largely because the traits that made Ferrari valuable in the classic years (1950s, 1960s, early 1970s) are no longer in play. They are stamped out in quantity, on machines, and equipped with technology that can be sourced by any auto maker. Their performance is exceeded by the less expensive Porsche 997 Turbo and several Mercedes. The badge is famous, but the exclusivity is less than what it once was.

Except limited numbers are a thing of the past. There are 16,000+ 360s out there, many looking for buyers in a sagging market. The reality is that if you can afford a loaded Merc E-Class you can afford a low mileage, modern Ferrari.

Which makes the new ones look like a sucker's bet.

Also, philosophically, I think we have to better ourselves for reasons other than the fleeting happiness of buying an expensive new car.

Exactly.

BTW, Porsche fell into the same trap by overproducing the 996. A 911 has always been a nice car, but the aftermarket is saturated with them, making a new one a bad value.

 

I'm with Tex on this one. Time to fill the garage(s)!

 

I remember the Road and Track article on the Daytona and in the summary sheet page, it had $16000 as the list price (1971). Now whether it was actually sold at this price, I have no idea.

 

Oct. 1970: $19,500, west coast with a/c, radio, wires.

 

Thats pretty accurate from my perspective

 

Precisely right IMO.


PDG

 

Precisely !
I simply do not understand the fascination of "the next" Ferrari when the quantity is so vast and the quality (manufacturing) is the same as a GTR.
Its not how fast you get there, its how you get there fast.

PS the Boxer was still hand formed and fabricated into the 80's.

 

I'm a visitor here, but I totally agree with the above. I love Ferraris, and can afford to pay cash for a new one. I'm a well-paid physician (surgical subspecialist), but I see the handwriting on the wall, with maybe one, perhaps two, more "good" money-making years left...
So I bought a new Cayman instead, the best value/car for the money out there, IMO, instead of a f458.

 

+1000

Spot on, new F-Cars are way overpriced as are used 430s to any measure other than owning one says you have more money than brains.

 

+1

A Cayman is almost more fun than the law allows, and it just keeps running and running and running like that damn bunny

Dale

 

+1, parts are more and more expensive.

 

Its funny listening to the belly aching and whinning about how many used cars are for sale and how prices have fallen.

Ummmmm.... any of you guys looked at Real Estate lately? You'd have lost less money buying a new Ferrari 3 years ago than buying a house for the same amount of money... and probably sell it quicker in today's market.

Things SUCK out there! It's the economy stupid... not Ferrari's production numbers. When the economy turns around, people will still want to own a Ferrari. Maybe even more.

 

I was speccing a Cayman S in 2007 when I realised I could buy a 550 for similar money. Best decision I ever made, especially in hindsight. I know Dale went the opposite direction, doesn't make it the best choice for everyone. Reliability has been great and depreciation has been slightly better than the Cayman, too.

I think the original question on this thread is moot - there is no such thing as "too expensive", there is only "too expensive for me". Everybody makes their decisions with their money as they see fit. I do believe that Napolis et al have a good point in that we are seeing changing times and new Ferraris will see more and more depreciation as Ferrari is pushing the envelope on supply. But I still think that their depreciation might be perfectly acceptable for the buyers. Certainly depreciation levels on plenty of other expensive cars are much higher and nobody seems too concerned about that. And as Bdelp points out - when the economy recovers then the demand part of the equation will change.


Onno

 

Yea I'm worried about this. I start med school in July. 10 more years until I begin working.

But now we are getting insurance cuts and have obama trying to lower compensation as much as he can. I will love being a physician. But going to school for 10 years after college only to make an avg salary is straight up depressing.

If everything ends up working out in the end, I'll be a future f-car owner one day.

 

I think the real question is when and if the economy will turn around so that more get rich quicker's can support a propped up F-market. The answer to that is not any time soon if ever. So yea, you'll get the people who buy new but cars will turn faster to avoid $150K hair cuts in a year or two. That will be hard on the depreciation curve no matter what F tries to do to prop things up like they used to.

 

This is very true. We all have our own template. In my case, I decided, after realizing I was paying $10K a year in insurance, to downsize, and I went from 8 cars to 4 (I have a wife and 2 kids). In my case, the Cayman is a daily driver I don't have to think twice about. In fact, I made my Porsche dealer change the oil at 1,000 miles, even though I had to pay out of pocket. Porsche doesn't schedule a change until 15,000 miles.

Moreover, I got great terms on a 3-year lease. (This is the first time I have ever done a lease.) Simply put, I have a floor of $40,000 for a 2009 Cayman that I "brought" for $54,000. A 74% residual after 3 years? Somehow, I think I'm gonna win this one. Of course, I brought the car a year ago when NOBODY was buying.

Truth is, I love the car. I was just at Cars & Coffee today in Dallas and looked at a lot of cars. (I even saw my first California in the flesh, ugh.) I drove away a happy man.

Dale

PS Can someone explain how buying a car at the end of the lease works? There is no way I'll pay $40,000 in 2012 for a 2009 Cayman. But can I buy the car from Porsche Leasing for its real value, which I suspect will be around $25,000?

 

Dale--
What features on your Cayman? Clearly you got the base Cayman, not the S.
PDK or manual?
Sports chrono?

(I too bought a 2009 base Cayman, PDK, as my daily driver. I chose to buy and not lease, despite the sweet lease deals like yours available. I bought mine for 12% off MSRP, plus 1.9% financing for 5 years. It was too good a deal for me to pass up, so I didn't pay cash! I test drove S also, but the improvement in power was only marginal, and not worth the extra $10K, IMO. Additionally, the S is Porsche's first DFI engine release--the base Cayman is not-DFI--, and after knowing the horror stories that BMW owners continue to have with their DFI engines, god only knows if Porsche's DFI engine is ready for prime time yet.)

 

Yes, the only options on mine are PDK and electric seats. I went with the base instead of the S because (1) I'm cheap, and (2) I really want to get away from driving stupid fast cars on the street. I'm saving that for the race track.

Dale

 

No question that other things have way too much supply as well especially Commercial Real Estate but Ferrari raising capacity 100% at the top of the market IMO will bite very hard.

As for the recovery IMO it will be VERY slow and the likelihood of Ferrari being able to sell 10,000 new cars a year at 300K average including options and taxes any time soon is nil.

I also think the odds of Ferrari Stores making money is slim. Would you buy into "Ferrari World" at full cost today?

If I was running Ferrari I would cut costs as much as possible, re-price merchandise (800e Ferrari branded children's sleds are silly) re pattern Classiche along the lines MB has to be a provider of all parts at reasonable cost to keep all older Ferrari's on the road, and bring the average cost of a new Ferrari to 200K all in.

Letting them eat cake can turn the eaters into eaten.

 

The alternative to lowering the average cost is to keep the average selling price up and lower production. For Ferrari, I actually think that would be the better way to go, as it would keep the brand equity up and help them make money in other areas.

However, everything else in your post is exactly right.

 

Fantastic! Do you mind if I borrow this for my signature line?

The reality is Enzo Ferrari died a long time ago. Today, Ferrari is a modern car company competing against the rest of the world for buyers of high-end cars.

Looking back, the introduction of the F360 in 1999 was a perfect storm for Ferrari. You had stockbrokers and real estate people making tons of money, and Ferrari introduced a $150,000 toy for them to buy. Go back and look at the production numbers. Ferrari couldn't make them fast enough. Not only did dealers have "wait lists," but potential customers had to pay dues just to get on the waiting list.

Sadly, the wheel always turns. Nothing lasts forever. You would have thought the disastrous NA roll out of Maserati in 2002 would have sent up warning flags (Search FChat if you want to know some more about this), but apparently not.

Now, Ferrari has excess capacity. Maserati is on the ropes. Fiat, well, let's not go there.

I hope the new car will give Ferrari a boost. The Enzo replacement will help also. However, I agree with Napolis that Ferrari needs to take a hard look at itself. Treating potential customers like crap is NOT an acceptable business plan in today's world.

Dale

 

Too expensive? I think in broad terms, the answer is yes.

If one believes Ferrari, as a business, has an obligation to implement a business strategy that will secure the brand for many years, then they're currently too expensive. Reasons are 1) the economy is rebasing to a level many of us have not seen and could be similar to economic trends post WWII, 2) supply and demand on the new cars is lopsided and 3) the "food chain" that pays for used cars way down the line is dry as a bone, thereby impacting #2.

For limited run production cars, the art form of supply and demand will always keep those cars at a premium and the answer is probably no.

 

I hope Jim is right. If they lower the prices for the 458, I'm probably a buyer, but not at 300k. 200k probably. If the dealers can't sell their inventory, they might even start giving discounts. Wouldn't that be a switch?

Art