These price increases are truly rediculous

The thing about "bubbles" is that they're damn persistent. Easy to spot, hard to predict when they're going to pop and it's for this reason we often sell short or capitulate and buy high but then again, is it really a bubble if prices remain ridiculously high for longer than anticipated? Nope, that's the market saying pay up or move on.

 

The same thing happened in rare coins in the late 80's. Even though the market bounced back in 2007 and 2008. It never was a bull market like the late 80's. Even gold prices are down 35 percent from there recent high's of 2012.

 

Much of this increase in prices of Vintage or classic cars is fueled by an increased interest from "new" countries like Russia, China and the Middle East.
And they are just starting to appreciate them! I do not see the "bubble" will burst soon. Prices might level out, but it is unlikely they will drop in the near future.
But who knows?

 

I thought the Chinese wanted the newest most fashionable car. To them it's all about status.

 

If (when?) the US stock market has a significant correction logic would tell you will see prices come down as investors lose money in that area and have to dump the baubles like vintage Ferraris to raise cash. Or perhaps those waiting for the top see it as at this time and many guys put thier car up for sale basically all at once.

OTOH, the stock market crash of '87 might have helped the late 80's bubble for those that still had money that needed to be parked somewhere after Black Monday, and collector cars were the next hot thing. Until they weren't and that F40 that was $400k new, then went to $1M, was back at $400k pretty quickly.

 

the vintage car market is not really the domain of the middle east, russia, or china. so thats not whats driving this market.
it is the funny money and zirp.

however, somebody has to keep buying to keep the ball in the air.....and like jim always says, trees to do not grow to the sky.
at some point rational thought will cap prices.

i am a buyer, and not very good at selling. i wont be selling now, but i am no longer buying much either. glad i got in a while back. i also dont care if the market crashes.

 

It sure ain't China. China has a 110% importation tax. There's no way you can make money on that. You buy a car for $2m and the real cost is $4.2m. In addition, they don't have a car culture like the rest of the world. They want "new" and not "old" cars --- which is what they view as vintage. (I'm not referring to Hong Kong of course -- just mainland China. However the tax also applies to Hong Kong)

Believe me, they never heard of a 250 GTO. But they've certainly heard of a La Ferrari

 

If you buy something you really, really like, the market does not matter. However, those of us with short attention spans are better off sitting out of the car market for a bit. There are other fun things to buy and invest time in. Be neat to see what happens when the music stops.

 

A very relaxed position, which I as well favor.

 

Actually, they are. The real market value of most new cars is higher than MSRP.

 

I can see how billionaires (or even those with just a measly $100 million) could use vintage cars as a diversification strategy in a small part of their portfolio. Getting little to no interest on parking money. As we learned in the last bubble burst diversification among investments, countries and currencies.

Chinese and others could buy and store their vintage auto elsewhere, avoid the tax and see them when they visit. After all these cars are too valuable to be driven much if at all. What difference does it make if the cars are stored in China or the US or someplace with a stable government. Vintage cars are like art...are you really going to hang a $100 million Monet in your living room? Insurance?

As for me i will invest my money in more traditional investments and drive the Ferrari thank you. I've spent money on wine, women and fast cars...the rest I've just wasted.

 

This is the sane, enthusiast/collector approach imho.

Of course, for certain folks (Gates and friends) the price variations are so meaningless as to not matter, and that part of the market can rationally still acquire whatever they *want* and not pay a second of attention to prices.

Here is a related question that I think is also worth pondering. Porsche introduced the GT4 to major acclaim. There is the possibility for marquees at some point in time to capitalize on the major value differential between DCT cars and MT cars by reintroducing MT cars. They can do this with new, enhanced technology but still retain the 3 pedal element. Or they can introduce with an automated mode (i.e., a "traffic jam" mode).

Porsche is not dumb... they already tested the waters and I would anticipate future variations of this same concept.

It may be pointless from a technological / performance perspective, but there are many times in the luxury world where stuff like this happens... nostalgic options/variations.

 

I agree. It's getting harder to rationalize buying at these levels. Right now, too much cash chasing too few cars, and the blue chip stuff is already picked over.

Three pedal manuals are like the automated targa roof on the new 997... doesn't help performance, but nostalgia sells. I'm sure there will always be a market.

As far as the premiums, as someone posted earlier, the vast majority of Ferraris on the market are three-pedal manuals. If 599 buyers had been interested in three-pedal manuals back in 2009-2012, they would be common. But, almost no one ordered them, and everyone custom ordered his/her 599. So, the notion of a premium for a three-pedal car is bizarre.

 

There will be alot of unhappy people who have bought
"investment" cars in the past year.....

 

I guess just because some people have more money than God. Doesn't always make them smart.

 

Another quote of Jim's is buy what you like because you might be stuck with it for a while.

If you like an Aperta, buy it, can't go too wrong. If you like an F40, buy it, can't go too wrong. If you like a 308 or 328, buy it, you can't go too wrong. If you like a vintage Ferrari, buy it, you can't go too wrong.

Focus on buying what you like and put the money part of the deal in the back of your head. These things aren't investments, they aren't piggy banks. They are just another way to spend precious money and limited time.

-F

 

911's and Gibson guitars. Out of control.

 

If people really believed these cars are not investments you would see a lot more on the road. Instead of being hidden away in someone's garage.

 

This looks to me like the mega millionaires who revived massive gains from the governments money printing scheam (counterfeit) are using that garbage cash to buy expensive items like cars and art.

The money they are spending may not have any value in a few short years. Might as well dump it into some kind of asset.

Somthing is afoot in the mega buck financial world. They know somthing we don't. Or maybe I should remove my tin foil hat for a while.

 

Actually the correct term is Fiat currency. ( FYI, fiat currency has nothing to do with Ferrari or Fiat)

 

80s bubble
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Can you blame someone who has a GTO that maybe it doesn't get driven to the supermarket?

Yes but many **supposedly** are buying things like cars, art, real estate and storing that outside China.... I have not personally seen it but I've heard it many times over the past few years.

The number of UHNWI has exploded over these years. Is that the result of some evil government plot, egg headed economists, Obamacare, who knows. I don't.

I agree bubbles are tricky things. I don't know if the values on 330 and earlier cars are in a bubble. I don't think so.

I think its more likely there is a bubble in these modern special editions- as great a car as the 599 GTO is- that is the car I think it just lost any link to rationality in terms of valuations. Cars like the 512TR and the Boxers are wonderful cars but the recent moves in prices are curious as well.

I guess we will find out what's what when the tide recedes... Ferrari is a unique thing and there's always a high degree of irrationality associated with it.... time will tell... in the mean time, I don't think the guys (or gals) with 599 SAAs will see them go down from here. If they do, please call

 

why are you surprised that boxers have risen in value? they are the last scaglietti coachwork built car. they are pretty and seem kinda cool. probably more like a $100k car ?

 

I didn't say surprised. Just curious. I should have said more about the pace of the rise than the rise. They are pretty and cool but aren't they going for $4-500k these days?

To me anything after the 275/330 has a Fiat corporate feeling to it.

Fascinating graphs above. I'd like to see how those values look from then to now.

 

sorry, you did say curious. my fault.