1989 all over again

i think this is a horrible comparison

forget the market, but any dealer asking a price that is jumping by 10k pounds a months, is just blowing smke. that is about $20k a month. forget what i am selling, but if it is worth the $100k mark and climbing $20k a month, do you think i would sell today knowing that tomorrow will bring so much more? the answer is hell no.

this ad is marketing 101.

the cars are increasing, but by no means as much as the seller would like to indicate, WE ALL LIVE IN THE REAL WOLD

 

Cars are just another "collectible".

The world markets are flush with money at the moment.

Some of this is finding it's way into cars.

Who knows how long it will last but certain Ferraris would appear to have been undervalued for quite some time so perhaps they are just catching up?

On the other hand probably will be sold first if things go pear shaped.

 

the two dino's that autosport designs had have sold. asking was $160k each

 

I have watched with interest Dino prices around the world as they have moved. I think i purchased my own last year with about 2 mins to spare before it all went crazy. At an auction at Shannons auctions in Melbourne Australia i missed a car that went for $85k aus with many parts missing and no history. If any body is interested on monday evening at their Sydney sale another 246gt was sold for $ 220,000 aus lots of work done and at some point a new engine (later Serial#) and who knows what else ?
http://www.shannons.com.au/pages/auctions/lot.jsp?id=D68E93EC8B172GGJ

I have no idea where it will stop and all i can say now is at least I have mine, and i hope they dont get so valuable i will be frightened to drive it or worse take the money.

 

Could you post a link to where you got this graph?

Thanks

 

Besides the possibility of a general economic retreat for collector automobile prices, the amount of speculative buying in various brands and specific models of cars will be the key underlying factor in the overall pricing correction for various brands and models. The muscle cars of the late 60's / early 70's are primed for the largest fall. The Dino market in general has many true fans and should have better support although there is apparently a fair amount of speculation both in the cars and accessories over the past 3-4 years. I would say it is definitely a fair comparison to 1989 especially if you put the current pricing on the graph to indicate the overheated run up in dino prices over the past year or two. My guess would be that good condition Dino prices will be around $80k U.S. in about 4-5 years, but I could, of course, be completely wrong.

BT

 

Agreed on many points, but add these facts:

- There are several "cottage industries" that support Dino by being parts suppliers, supporting the idea that they are genuinely loved by collectors
- The Dino is one of the most driveable vintage Ferraris, you won't see too many 250s or 275s, and rarely a few 330/365s on club events
- The Dino engine has far fewer parts than the 12 cylinder Fcars so maintenance and keeping it on the road is much simpler

- Your point about the run-up by speculators is supported by the number of dealers that are now buying them rather than end buyers.

 

We haven't seen the 300% increase in three years. I would say some parts have seen 100% in two or three years.

Dinos are lovely cars and their meteoric rise is startling.

I'm just mad I didn't get one already.

 

As a very recent buyer at the very high end of the price range, I can tell you from personal experience why Dino prices have spiked, and what's likely to happen in the near future. I've said this before, but here goes again:

1) The Dino is unique. It is, to many eyes, the "perfect" aesthetic Ferrari -- a bridge between the voluptuous curves of earlier sports cars and the wedges of the late 70s and 80s. It definitely edges towards the exotic, but there is nothing embarassing about driving it around town. It also has a serviceable engine and extremely manageable driving characteristics. For the target demographic with the means and the desire, it is the ideal investment vehicle. Beauty with elegance and intelligence, enough performance to make it fun, but not so much as to make it dangerous or gross.

2) The choices out there even at the $200k level aren't exactly legion. You can buy a 360, but there are a million of them around, they seem likely to depreciate even more, & they are a huge statement to drive. I showed a couple to my wife when I was making my decision, and both she and my son looked at it and said "middle-aged crisis car." When my 17-yr. old daughter saw the Dino, she said, "you could come visit me at college in that, and I wouldn't be embarassed." After the 360, there are lesser Ferraris, a bunch of rap star exotics, the Jag XKE, or older Mas's and Lambos that just won't run without a full time staff, or the expertise and unending patience of the people on this chat who probably love it when something breaks so they can get back into the garage! Dinos (knock on wood) that have been cared for seem to work -- a little flighty perhaps, but they run.

3) The prices for Impressionist, Contemporary and American art have also spiked in the past 5 years -- with the high end doubling, tripling, or more. Anyone who could look at a Dino and say it isn't a work of art is blind. $200k will buy you a third-rate American painting, maybe a sketch by a third-tier Impressionist artist, and in Contemporary maybe a half a formaldehyde-preserved sheep or some urine splashed on a sheet of copper and hung on a wall. Cars are collectibles and they are art. There may be a "lot" of Dinos around, but not that many are for sale at any one time, and a good one is hard to find. The "Ponder" car that seems to have generated a lot of controversy made sense on paper -- a low mileage Dino that belonged to someone who cared for it is something most people (like me) spending this kind of $$ would prefer over one that had been knocked around hard and been worked on a lot. At least if you get stuck putting money into it, you know what you started with!

4) Foreign buyers can buy cars with cheap dollars here. Four/five years ago, the pound was about $1.60, now it's $2. The Euro's gone from .85 to $1.40. That impacts all international collectibles and art (look at the recent Impressionist sales in NY this week -- mostly European buyers).

5) Unlike any other investment or collectible, cars can be driven around with a big smile on your face. If showing off is your thing, you can cruise around and let the world know how rich you are. You can't take a painting around the esses at Lime Rock park, and a nice Tiffany lamp doesn't sound like screaming Valkyries.

6) If you buy a car as an investment and you aren't a dealer, good luck to you. I assume I will never sell my car, so it costs me the carry on the money. Even at $200k, that's only about $9,000 a year after tax. I can live with that. If my kids decide to sell it when I'm done, that'll be found money for them!

When I bought mine, three sellers turned down offers 5-10% below their asking price. That's a strong market.

 

we must keep in mind that the dino isn't the only "vintage" ferrari to find itself rising in value. ALL of the sixties and early seventies ferrari's have risen greatly in the last 2-3 years.

i knew that dino's were way undervalued when 430 coupe's were trading at $100k+ over sticker. why in the hell would you pass on the fact that $100k would buy a dino or a boxer to get one of the first 430's? they made over 18,000 360's, and roughly 3000 dino's. figuring a certain percentage has gone away and more people appreciating them, they aren't exactly common. granted, i live in texas, but i can count on one hand the number of times i have seen a dino driving (not including mine) in the last five years.

whether the value's are real or not, the car is a great little car. i know that i am one of the few that would claim this, but i wouldn't swap a like kind daytona for my dino.

 

+1
Daytona's attract their own following, so I'll attempt to tread lightly as I just don't find myself compelled to the extent that I enjoy the Dino's body lines. Amazing that both are not too far away in their price points.

Add an aftermarket ignition to your Dino and you've cured the majority of upgrade needs. In 1994 I went to Permatune and asked them to gut my dodgy Marelli and put in one of their systems in Dino #1, a USA version car. I see now they offer this as a regular option and you can't tell it when you go to concours:
http://www.permatune.com/P-Ferrari.html

 

So with the dollar at a historically low trading price, I would expect the dollar to rebound some in the long term, especially with the increase in our interest rates over the last three years. Any new president should give the world a better impression of the US, and I believe the strength of our economy will start to rise. When that happens, the foreign investor will not see this as such a bargain, and prices will stagnate or retreat. Most economic indicators are cyclical, and the once poor performing countries are now doing very well, while the US is in a (temporary I think) poor position. There may be many more baby boomers with plenty of cash looking at the Dino as their dream car and willing to pay really high prices, but to me (just a bit younger) it just does not seem justified. At some point the investor of today will have to sell to the buyer of tomorrow, and if there is not as much enthusiasm then the support will decline and prices will follow. I would think that the 308 would be a better long term investment as a percentage because it is more iconic and the next generation will have a stronger appreciation for it. My $0.05, YMMV!

BT

 

You can't ignore the impact of real estate bubble funny money on the collector car market (especially muscle cars but also exotics).

From the really low end folks who have done cash-out refinances and have $100-200k to spend on whatever catches their fancy, to the middle-end folks who have flipped a couple houses and now have $500k-$1M to burn, to the higher end developer types who have benefitted from essentially free money from banks and soaring commercial and investment residential real estate prices, who can drop several million, the real estate money machine has bankrolled a lot of the appreciation in collector cars and the reality is that it's all over. The real estate market is already crashing in some parts of the country and is flat to mildly down in others. This means no new funny money getting pumped into the market and some folks who are overextended will need to liquidate their toys to keep their own primary residences and stay out of bankruptcy. Fortunately, unlike the late 1980s, the economy generally seems to be doing OK and we have a much more responsive Federal Reserve now, so this crash shouldn't be quite as hard.

 

The single biggest difference between the frenzy of 1989 and todays' exotic and vintage car market is that the '89 market was driven by speculators hoping to turn a quick buck from inserting themselves into the process for a brief time. As with all speculator driven markets, the prices paid overshot the real value of the assets at the time and a correction happened when speculators were left holding assets that real buyers didn't want at the prices being asked.
Today's market is different. The exotic side (euro cars primarily, because the BJ fueled muscle car hysteria is inexplicable!), has real long term collectors stepping in and acquiring these cars without any exit strategy in mind. They simply want to own these cars, and in the rarified world of wealthy people who are collectors, their earnings and net worth have increased geometrically, way beyond what that class of people were worth in 1989 (and there are proportionally many more of them) so they can literally afford anything. If they want it, they buy it. There are relatively few exotics available and anything that is thirty years old or more is starting to attract attention. Has anyone noticed that 308's have not really moved any lower in price? Yet a 30 year old Buick isn't even worth the weight of the metal as scrap simply because there are literally tens of thousands of them rusting away out there. 308's on the other hand are still limited and will be increasingly more so as collectors start out with those because they are relatively affordable. A 1977 308 today is selling at almost three times original MSRP. That's three times better than an F40 - food for thought I guess?

 

I'm not so sure it's our President's image abroad that's driving the dollar lower. It's a combination of trade imbalances, a renewed surplus of petrodollars flooding the markets, and our endlessly inflating money supply, in part driven by the huge cash flows from the vast retirement and pension fund investments here. (More supply of dollars = lower value) Our relatively low rates make alternative investments in other currencies more attractive, adding more fuel to pressure on the buck. Finally, most of the large hedge fund currency players have been beating on the dollar like a drum for two years.

My point is simply that a Dino could have stayed at 50,000 pounds in the UK for the past two years, and it still would have appreciated 30% in dollar terms. Of course, that makes a new Dodge look a lot cheaper to a European buyer, but they're such lousy cars, price is really not the driver in the purchase decision (pun intended).

The Dino is a work of art. I've had mine three weeks, and my neighbors kids have just walked through my gate, and let themselves into the garage to look at it four times. These are 11-14 year old boys who are responding to what I think is the "perfect" sportscar body. One of them just stands there and stares at it slack-jawed. They've seen plenty of cars around here, too.

The Dino came into play when I went to look at an Aston Martin Vantage Volante, and my wife saw a silver Dino in the corner of the garage, and asked "what's that?" She couldn't care less about cars. I said "about twice the price." She said "so what? Now THAT's a beautiful car."

I also agree about the Daytona -- I looked at one, and drove it, and it left me cold. I had always thought I liked them, but when it came to something I'd want to look at in my garage, it wasn't even close. The Spyder was kind of killed by the whole Crockett & Tubbs thing, too.

Another issue is who buys Dinos. I don't think guys are mortgaging their houses for them. I think it's men like me, hitting middle age, with the surplus funds to get whatever they want, within reason. It could be a painting, a week on a 180-foot cruise ship, a plane share -- whatever. The Dino is more fun than any of that stuff, and you can look at it, even make it a full-time hobby if you're into the mechanics -- and that comes with a TON of fun gear to buy, too! And, the Dino is a manageable car. Hey, you could spend $80-150k for some new Porsche, but no one can tell them apart, you see 30 or 40 of them a day, and as a former 911 owner, they're only exciting when you lift the throttle in the turns.

 

I agree on the desirability of the Dino as a genuine one driving the enthusiasts on this site. There are some speculators who are partially driving the market, and they would be the primary reason if prices ever retreat. As long as a true enthusiast is happy with the price they have paid for the car they are owning, it's all good.

BT

 

I agree with that assessment, and when US interest rates move lower so will the dollar. That essentially shifts buyers from the US to Europe, which is OK. We can always buy 'em back.

I do believe, though, that all asset categories are overpriced right now and due for a correction. This includes collectibles of all sorts, real estate, equities, precious metals, commodities, etc. I would expect a soft landing though, as opposed to a crash. There's enough liquidity to keep prices from doing a 1989'esque plunge. I try not to believe that prices for my own Ferrari will go much higher or even stabilize where they are. I'd rather not think of it as an investment, because as prices move up so does the instinctive urge to sell.

Jack