812 Market Dynamics | Page 24 | FerrariChat

812 Market Dynamics

Discussion in 'F12/812' started by 1881, May 19, 2019.

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  1. KenU

    KenU Formula Junior

    Oct 14, 2004
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    Ken
    Paul, you are absolutely spot on with these posts. I am expecting delivery of my SF90 end of '20/ early'21. I am so interested to see how this car drives and want to ogle it in my garage every time I go in and out of there. If I hate it I'll get rid of it and move on. If the spider version kills the value and I want that model I'll take my licks and get that. I was prepared to do that with the new GTS knowing I'd take a big hit on my coupe, but don't like the design, at all! So, I'm keeping the coupe. What a mind-blowing machine!

    I learned a long time ago, the hard way when I was less financially secure, that cars in these price ranges (decades old $ equivalent) depreciate sooner or later for whatever reasons ie; see above posts. As a result, my behavior changed: if I was worried that I was going to lose money on a CAR, I shouldn't buy it. I lease my DD '19 Pano Turbo for business, a totally different mindset. Exotic, expensive "toy cars"? >> I want to drive them, hear them, look at them, enjoy the hell out of them, etc. I've accepted depreciation as the cost of that enjoyment when it comes to these cars, no matter how much, because I can't put a monetary price on that exactly. Now, when it comes to buying apartment buildings?? That's a completely different conversation:D
     
  2. noone1

    noone1 F1 Rookie
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    This is the key to "value" in the exotic market. There is barely any real value in any exotic if you plan to buy/sell every year. You'll lose your ass in depreciation if not sales tax as well in some places. If you care about value for money, buy and hold for 4-5 years and put a lot of miles on the car and beat the **** out of it. Bumper scrapes, paint knicks, miles, wear/tear... it barely means anything come resale in year 5. Better yet, buy 12-18 months used and keep for 4 years.

    If you just want to be seen in the hottest new thing, then prepare to pay up the ass because showing off has never been cheap or good value for money, and it certainly isn't now when exotics are pushing $300-400K and there are more then ever to choose from.
     
  3. noone1

    noone1 F1 Rookie
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    That really has never happened with any other high-end luxury brands, so I don't think it will be much different for Ferrari. LVMH is still killing it, Rolex still sells fine... Ferrari needn't be the most exclusive car in the world to be successful and stay successful. They have enough cachet to expand in both volume and niche. Sure, maybe they'll depreciate more but don't underestimate the amount of money that the wealthy piss away without a care in the world each year. People spend $5K just to fly first class for 8 hours. They spend thousands on clothes that have zero value. They buy jewelry that's marked up 200%.

    There is enough money to go around that it won't hurt Ferrari IMO.
     
  4. Thecadster

    Thecadster F1 Veteran
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    What he said....^^^
     
  5. Thecadster

    Thecadster F1 Veteran
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    Since when do “bumper scrapes, paint knicks, miles, wear/tear...” barely mean anything at year 5? They certainly matter to me. I guess I am just a weirdo.
     
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  6. 1881

    1881 Karting

    Dec 21, 2016
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    #581 1881, Nov 17, 2019
    Last edited: Nov 17, 2019
    Given that Ferrari just announced that they will slow down the new product release pace... It already has an impact and it barely has started.... Paying 5k for a first class flight or 2k for a Louis bag is something very different than losing 100k in 6 months on a car.... The absolute amounts matter

    Also it did happen many times... You are just quoting the exceptions that managed.... Many other brands didn't... Audemars had to completely revamp their strategy few years ago to save the brand as they went down the too many models and volume path beforehand.... Actually first class is not doing great either for airlines as business class got better and better and the value differentiation isn't there anymore.... There are many other examples
     
  7. Bamsefar

    Bamsefar Formula Junior

    Nov 26, 2012
    523
    Well that is a bit funny, if you allow me some room here...

    Gustasf Magnusson, salesrep at Autoropa, did say directly to me when I collected my FF, that Autoropa never sells any 2nd hand cars without ppf (paint protection film) since Ferrari customers are so sensitive to if a car has been re-painted.

    Now that may sound correct, and in line with your and mine values.

    However, since Autoropa managed to get my FF into a car accident by reversing into another car and when that ppf was mounted they simply cut trough the ppf into the paint and alllllll the way down to the metal in 8 different parts including hood and a few other areas where this is clearly visible. So I now have a FF that Autoropa them self has destroyed the paint on - and sadly enough the worst part is that it happend when the applied that ppf that was supposed to protect my FF. Na I have got no compensation from Autoropa, and well Gustaf Magnusson clearly stated that they now will never resell my FF.

    So I just enjoy it since it now has a value of well zero.

    However, the thing I would like to point out is that the same person, Gustaf Magnusson at Autoropa - before we knew that the ppf had destroyed the paintwork, mentioned that my FF from 2016 is no different than a FF from 2012 - so the "extra value" for later model was obviously worth zero also. This, if it would be true, would also make any later models, be it 488 or Lusso, worth the street price of the cheapest corresponding model on the market. So in that perspective any dents, paint problem/re-paints or whatever will set the market price. So in the end, yes after 5 years the level of maintenance would not be of importance.

    In the end, the few people that does care about how a car has been maintained and if it been repainted/in a crash, seems to be very few - and the mass market (funny to write that for such an expensive car) simply do not care.
     
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  8. LVP488

    LVP488 F1 Rookie

    Jan 21, 2017
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    That's typical salesman talk - if you had a 2012 instead of a 2016 he would tell you that you cannot dream selling it at anywhere close to a 2016 car price...
     
    Tim Riley and nads like this.
  9. Bamsefar

    Bamsefar Formula Junior

    Nov 26, 2012
    523
    Of course!
     
  10. Napoli

    Napoli Formula Junior

    Nov 18, 2017
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    NOYB, Ray!

    And, this is is the upside of all the "downside." Glass is way more than half full, guys.
     
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  11. Thecadster

    Thecadster F1 Veteran
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    Apr 27, 2017
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    Exactly. Now if just had more time to drive...
     
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  12. noone1

    noone1 F1 Rookie
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    Well Ferrari isn't the Audemars of watches IMO, it's the Rolex.

    I believe they will slow it down simply because they will soon have nothing to replace, not because it's detrimental to the brand. The only thing left to create is an SUV. No one is losing $100K in 6 months other than maybe a Lusso, which everyone already knows going into it.

    And like I mentioned before, the loss isn't realized unless you sell it right away. $100K in 6 months becomes 50K/6 months if you keep it a year. After year 4-5, the loss becomes $40k/year. The forums and social media give the impression that no one holds a Ferrari very long before swapping it for the next one, always on to the next one. I really don't think this is true for the majority. Lots of people actually keep them a more reasonable amount of time and thus the depreciation isn't that big of a deal.

    People making $500K-1M per year, every year, aren't really that sensitive to long-term ownership costs IMO. One month's income isn't too hard of a pill to swallow for yearly depreciation.
     
  13. noone1

    noone1 F1 Rookie
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    Because the depreciation is far more related to age/mileage than cosmetic condition at that point. The buyers are just much less sensitive to condition, hence why they're OK buying 5 years old in the first place and not buying something new. The cost to freshen up modest wear/tear is actually pretty low. A $400 professional detail goes a really long way come resale. With most people shopping for exotics on the internet, perfect pictures will go farther than perfect condition.
     
  14. gilly6993

    gilly6993 Formula 3

    Aug 20, 2009
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    Spot on. As I get older I hold longer. I don’t need the newest and “best”. And the choices for my money is tenfold what it was 5-10 years ago. This is a buyers market and I don’t see that changing. There’s just too many manufacturers/ models in the $200 - $400K segment now and used inventory continues to grow. And with warranty extensions the 5 year ownership worry is gone. I’m thinking of replacing my ‘16 RS and am in zero rush. 5 years ago I would have bought something already.


    Sent from my iPhone using Tapatalk
     
  15. Shack

    Shack F1 Rookie
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    May 2, 2005
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    So true this. Allows one to play with other brands products as downside is minimal.
     
  16. Thecadster

    Thecadster F1 Veteran
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    The people I know making $500-$1M annually (and even much more) all care about their money and would certainly be sensitive to even a single months earnings. Maybe I run in a different crowd. I always find it interesting to see high earners characterized as being either careless or carefree about their money, or at least somewhat immune to costs, losses, etc. As for me, the only way I let go of a nickel is to get a better grip. My car addiction is my singular discretionary spend and it’s an insignificant fraction of my investment plan.
     
    Tim Riley, of2worlds, KenU and 2 others like this.
  17. Solid State

    Solid State F1 Veteran
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    Feb 4, 2014
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    Spec, condition and mileage is everything for a modern Ferrari regardless of the age. And $400 doesn't pay the tax on a professional detail. So much misinformation in this thread. :(
     
  18. noone1

    noone1 F1 Rookie
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    It's pretty hard to find a Ferrari in truly bad condition though. They just don't get used enough. Steering wheels and seats are just about the only thing that wears visibly. And most people will find damage and small scratches all over their car if they actually look, but I've never known a seller to budge on price just because some guy got down on his knees to look for every little flaw. In fact many people buy cars without even coming to see them. Most blemishes can be hid extremely well come resale for a very small amount of money. The absolute worst case is re-spraying a bumper which still really isn't more than a couple grand at the end if the day.

    $400-500 will bring most cars back to practically factory condition with a decent detailer. That's like 8-10 hours of work. Your paint will look like a mirror. Don't get me wrong, you can spend thousands and have every single inch of the car looking flawless, but I would really question the value of doing that with anything other than a rare car going up for auction. Any car you actually use will get dirty pretty quickly no matter how much you spent on the detail.

    The about of money people spend on detailing and ppf is overkill. The amount of regular car care and detailing you can get for the price of full wrap ppf is pretty significant.
     
  19. R J

    R J Formula Junior

    May 17, 2017
    583
    UK
    From what you say about that dealer, you cannot and should not trust a word. It is tragic to me that such negligence and profligacy should be allowed to continue. Many work extraordinarily hard to buy these cars, only for a dealer to rip them off and shred a dream. Terrible.
    I hope a resolution is found for you. I hope there are alternative dealers in your location.
     
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  20. Solid State

    Solid State F1 Veteran
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    I know exactly what it costs for multi-layer correction, PPF, ceramic and show wax on top. Don't know anything about paint but around here every Ferrari is spotless and $400 might get you PPF on the gas cap. The one-way tow is a couple hundred alone.
     
  21. noone1

    noone1 F1 Rookie
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    Well, when you consider how little the average Ferrari gets driven, I think it's safe to say the buyers of new Ferrari don't really care about the depreciation. If they cared that much about the money, they wouldn't be buying new in the first place. Anyone who buys a new exotic has either A) seen used prices and is comfortable with depreciation/value proposition, or B) has enough money not to care.

    It would really strike me as odd for someone to buy a new exotic car and then complain about depreciation.
     
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  22. Scraggy

    Scraggy Formula 3

    Apr 2, 2012
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    I tend to find successful self sufficient people very alive to value and depreciation. I don’t see why just because you buy something beautiful you have to get caned. You don’t with a well chosen Patek, Rolex or Hermes bag. Could be the same with an exotic Ferrari eg LaF Aperta but thats just not compatible with being a public company.
     
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  23. noone1

    noone1 F1 Rookie
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    #598 noone1, Nov 18, 2019
    Last edited: Nov 18, 2019
    You're not though if you keep it a reasonable amount of time. I don't understand why people think you should be able to own stuff for free/cheap while everyone else in the world loses a lot, relatively speaking. Even the average $40K car buyer loses quite a bit as well in the first few years.

    And you can in fact do the same with a well chosen Ferrari. You can find a nice 458, 488, or F12 right now and not lose nearly as much over the next few years as a new 812 or F8. Are old Ferraris not beautiful and accomplishing more or less the same thing as a new model? Many are worth vastly more than the brand new ones even.

    Ferraris that depreciate more and quicker are a great thing for real enthusiasts and the customers who want them most. It means the people that want them the most will get them quickly, easily and at MSRP. It means they'll depreciate quicker and enthusiasts who are a bit more value oriented can get a great deal sooner rather than later. Prolonging depreciation only benefits a small subset of buyers. Prolonging depreciation means people having to wait longer.

    The days of new customers being told their car will be ready in 24 months are hopefully gone and that's a great thing for the majority of potential customers.

    And as a bonus, the quicker it depreciates that more miles you can put on it. Ferraris have always been super mileage sensitive early on. With more depreciation comes the ability to put a lot more miles on the car without causing excess depreciation.
     
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  24. montpellier

    montpellier Formula Junior

    Aug 27, 2009
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    The people I know who are in the billionaire class most certainly do not like wasting money on car depreciation, the idea that the more wealthy you are the less you care is total nonsense. What business person wants to be known as buying a car that loses 30 plus percent the day after. It makes them look stupid. Ferrari has too take care of depreciation , it devalues the brand. Buy a Rolex steel watch and you will sell it in 5 years for a profit. That is managed demand. Ferrari has lowered itself to the masses and now depreciates like any other brand, That is totally against a concept of desire.They are over priced and over produced. They broke the business model in search of short term gain. The product is exceptional , but the business model is broken. The next few years will create chaos for them, and the first to notice will be the dealers. Ask any dealer their current stock valuation vs 3 years ago .

    The best thing to do is keep your car for years. In any case we are at the end of a certain technology, and the future is very quiet. What will a Ferrari or Lambo be like full electric ? Fast yes, but emotion ????
     
  25. noone1

    noone1 F1 Rookie
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    #600 noone1, Nov 18, 2019
    Last edited: Nov 18, 2019
    Define "care". All costs are relatively.

    Business people look stupid buying a car that depreciates 30% the next day? I don't follow. They're buying something they want. Buying a Ferrari in itself is a stupid business decision. Buying an asset for business that depreciates 30% and has no ROI is stupid, but Ferraris aren't for business, they are for pleasure. Some people spend $5K to lay flat on a plane for 7 hours. Not a very good value proposition IMO, but hey, they don't care.

    How stupid is Bill Gates?

    He spent $5M/week renting a yacht the size of a football field. Do you not think he could have had just as good of a time on a yacht for $3M/week that's only 200 ft instead of 300 ft? He made about $40M/day this year, so no, he couldn't care less about a couple million dollars. That's not say he would willingly spend $10K on a hamburger and a can of Coke, but it's clear that the more money you have, the less you care about excess and splurging on something you want.

    The mere act of buying a new Ferrari is a sign waste/excess. The people who care most about depreciation are the ones who can least afford it, which is fine. Let the people who don't care buy first. Let the people who want things most pay the most.

    If I was Ferrari and not bound by contracts etc, I'd sell every slot/car to the highest bidder above my reserve price MSRP. Want an SF90? The bidding starts at MSRP and goes up. The order in which you bid is the order in which you get it. The market will always work itself out. I'd rather be able to buy a car I want at the price I'm comfortable with than have to play dealer games and wait forever.
     

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