488: What's the best way to buy this car?

You cannot guarantee appreciation and frankly if you were my wealth manager I'd be worried because you should know not only that but also ways to finance cars for your clients

If I have misunderstood maybe you could make your query a little clearer

 

This isn't going to go well....

 

Looks like you aren’t buying a car.

 

Ok, I'll bite. First off, it is never a safe assumption that you won't lose money on a car. In general, a car is a depreciating asset. A Ferrari is really no different unless it is a limited model or your are the one of the first ones to get a new model of a regular production car. Later in the life cycle (and we are definitely later in the life cycle for the 488 as they are easily available to order new and plenty of used stock as well), you can assume normal depreciation of about 10% per year (yes, that is between $20 and 40,000 per year of depreciation, depending on the spec of the car and whether you trade back to the dealer or sell private party). If as you say, you can use it as a tool to gain more clients and increase your personal income, that is another story which I cannot help you with.

As for new vs used, it depends on how many options you want and whether your local deal will "let" you order a new one. Some want you to have purchased a used car from them previously but my guess is, this late in the model cycle, you'd be fine. If you are willing/want to spec a low option car, you are probably better off ordering new as you could actually spec a pretty nice car in the high 200's. If you want a lot of options (all the carbon, race seats, lift etc...) then you can probably save 20-30k or more buying a used one but make sure to look at the actual inservice date on carfax, not the model year as the warranty is determined by when the clock was punched. Most of those cars with "savings" will have 1 year or less of warranty and extended warranties are not cheap (5k/year).

Lastly, on the matter of financing, it is generally not a great idea to lease these cars unless you can take a business deduction and if you search, you will find a lot of disagreement on the propriety of deducting a leased Ferrari through your business. The problem with leasing aside from the added cost is that a situation could occur where you are upside down in your lease (say the car depreciates faster than your payments) and the insurance company totals the car in an accident but the payout from insurance is less than you still owe the leasing company. Now, no car, and you owe more money out of your pocket as well.

Lots of great options out there. 458's are a great cars and would run you about 100k less and are a great place to start as the depreciation on those is slowing due to their popularity. Not as much torque as a 458, but naturally aspirated, 9k RPM is intoxicating and it is a beautiful car to boot. Best of luck and one way or the other, Ferrari ownership is a special thing!

 

I've been running the numbers on a new Spider due in shortly with the same offers from the dealer. Outright purchase is the least cost ultimately. The issues with the lease in my book is 1. you can end up upside down (as johnr states), but 2. In end the end you have zero, no equity. All those payments are just rent. Used can obviously save a ton in depreciation, but it's a big annual number either way, at least for the next few years.

 

I cant see how a financial advisor is even considering a lease. Pay cash for depreciating assets.

 

Ouch

 

488 if you buy a like new used one under $260k. You are likely looking at minimal damage while getting one hell of a car. Can not value the enjoyment with depreciation.

I used to be in wealth management as well very very long time ago. Back then I had a 360, bought it for sake of love and passion for cars. However, it did helped me attracted a ton of clients. $2.6 million book without need of single cold call in my first 3 months in industry. People always ask what do you do. That is instant ice breaker and people come to me. Every industry I been in the better car I buy, the more money I end up making somehow.

 

Lots of wow's. The first is that anyone would choose a wealth investment advisor from their social media postings of their Ferrari. As an owner of 2 FCars I would do the opposite and not invest with with an investment advisor who posts pics of their Fcar.

Onto helpful advice...

-I bought a 2004 360 spider 3 pedal in 2010 for $96K, that car is still worth the same (I nor longer own it, but if I did it wouldnt have depreciated at all).
-Bought a 2013 458 Spider in 2014 for $325K, it's probably worth $175K now (but I got a lot of great use from it and will likely keep it for many more years). It wont go down that much more in value (maybe another $25-$50K at even over 5 more years)
-I also have a 2018 488 paid $300K and it will be worth $200K in a couple years or sooner (I'll trade this in for a new one with-in the year for a newer one).

In short if you have the money and don't car about the hit buy a new model. If you are at all worried about depreciation or costs buy one that is 5 years old and a lot of the depreciation will be done. No reason to stretch, a 5 year old 458 spider will give you great enjoyment and be half price with little depreciation.

 

Wait, what? You didn't even say how much the car costs to buy right now.

 

I think my wealth managers fly around in private jets...

 

They might even have yachts and a fleet of hyper cars. I left the industry with a sizable book, because I did not like the ethics and don't want bad karma. Not saying there are no good ones in industry, but I seen enough ugly side. Having a fun car is much more than just attract clients or project success. It is extremely powerful motivating tool and extremely fun.

 

If this is the case, can your cashflow absorb a 3-4k payment? if so, id finance the car assuming you can write off the payments and interest through your business. Preserve your cash in your business for other expenses. Meaning, you are paying for this with pre tax dollars- If not- pay cash and be done with it.

Just make sure that your business can actually afford the payments and this is not a weekend/part time thing you are doing on the side just making a few bucks.

But then if you are going to use your car in your marketing, you will want the latest and greatest model when it comes out so you stay current and legit. Could get a lot more expensive but fun to constantly get a new Ferrari every few years.

 

If you plan on selling the car back to your dealer in a relatively short period of time and your state taxes lease payments on the stream of payments method, you can save some money on sales taxes by leasing. For example, in Los Angeles the savings on one year of ownership on a $350K car would be $28K less whatever finance charges are built into the lease.

 

Don't get it. Not saying his story is false by any mean or form, but do you really make it your mind by reading some anonymous "info" on line when making decision on a such purchase? Why don't you talk to those vendors you cited that really have a ferrari and see how that helped them?

 

If your main priority is to network with Ferrari owners, you don't necessarily need to get a 488. Unless you get the Pista, it's guaranteed the 488 will lose money as it is a relatively high volume mainstream Ferrari (even the Pista, or any Ferrari for that matter is not a guarantee.) A car like the Mondial 8 (cheaper than a loaded Camry) will lower the velvet ropes of all Ferrari orgs, with the exception of some of the most exclusive of sub-groups. The key to your conundrum is to own a Ferrari that has a level of prestige (to accomplish your goal of personal branding, i.e. Real Estate agents can't show up in a Civic, I get it)

My advice is to get a 330 or older 'classic' Ferrari in the 300-400K range. Those have a higher potential to at least maintain value (although again, not a guarantee) and you can position yourself as a collector and connoisseur of the 'by-gone era'. So you get to keep your exclusivity and minimize depreciation. (maybe with luck even make money)

Hope this helps.

 

Or even a TR or BB are also great choices as well.

Just my $0.02, always happy to refund you.

 

Wait- I thought you said you owned your own business?

 

It really depends on a number of factors as to whether or not it makes sense. I would not count it out as an option.