Condition of Economy - Will it be a buyers market F430?

Discussion in '360/430' started by tabiggs, Jun 3, 2008.

  1. Modeler

    Modeler F1 Veteran

    May 19, 2008
    State of confusion
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    #51 Modeler, Jun 5, 2008
    Last edited: Jun 5, 2008
    Ferraris have never done as well as the top art market in holding value. Even the limited number racing classics cycle with the booms and busts.
    Fiat Ferraris just can't hold value in a down turn.
    Today, thanks to emerging markets in Asia and the Middle East, Ferrari now builds about 6,000 cars a year. The collectibility of anything, be it Ferraris, coins, stamps, or whatever, is inversely related to the number built, and far too many 550s, 575s, and other modern Ferraris have been built to ever be anything more than nice cars.

    Consider that in 1960 Ferrari built 306 cars, including 62 SWBs, many of which continued the Ferrari tradition of winning races and championships. In the last decade, Ferrari constructed 3,600 550s and almost as many 575s, of which only twelve were factory–built 575 GTC race cars, and none of them had any significant race results. Since the days of the Competition Daytona and the 512 and 512 M Sports Prototype cars, Ferrari has focused on Formula One, and so the relationship between today’s GT cars and Ferrari’s great wins is hardly anything more than both of them carrying decals of the Prancing Horse.
    The V6 and later V8 Ferraris may have made Ferrari a household name and expanded Ferrari ownership, but they are anything but collectible. The V8s have continued Ferrari’s racing tradition, doing well with the 360 Challenge and 360 GTC cars. But other than one–marque, Ferrari–only series or the occasional National Championship, V8s have never dominated the world racing scene like their V12 forebears. And the many post–Fiat Ferrari 2+2s—from the 365 GT4 2+2 to the 612—are simply fast cars with room for kids.
    Gone forever are the days of the early 166/195/212/225 and 250 coachbuilt cars, which evolved into the 375 Americas, the 410 and 410 Superamerica, 500 Superfast, and finally the 365 California Spyder. The days of top–of–the–line Ferraris being built to the client’s order, with special engines, unique body features, and personalized interiors ended in the late 1960s and early 1970s with Fiat–introduced mass production and headlight, bumper, smog, and safety regulations.
    Newer cars are excluded from key events. Early cars, from the 166s up to the Boano, Ellena, and TdF, are eligible for the Mille Miglia or Colorado Grand, while later cars, such as the 250 GTO, 275 GTB/C, Comp Daytonas, and 512 M and 512 S Sports Prototype cars, are eligible for the Monterey Historics or Pebble Beach. But eligibility dates do not move forward every year, so virtually all the cars built beyond Fiat’s 1970 ownership are excluded from these events.
    Relative to the modern art market, Ferraris have been losing the value wars since the crash of the ’90s. At that time 250 GTOs sold for about 25% of the value of the very top paintings, like van Gough’s Sunflowers ($13.75 million against $53.9 million). It has taken eighteenteen long years for Ferraris to get close to their 1989 market prices, while fine art has spiraled upwards.

    Now if the real Ferraris can't hold value in a bust, what chance the second hand later models?
    IMHO, our OP can look forward to a buyers market.
    I'll be buying in Q4 or Q1 next year. Not because of prices but as a motivation and reward to myself. A light at the other end of a dark health tunnel.

    Figures courtesy of M.Sheehan
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  3. Fmax

    Fmax Formula Junior

    Aug 16, 2007
    Prague, CZ
    Full Name:

    fkjfndfdd? dshdshkas? yhotjfgdAasAS? ME TOO ;)
  4. Fly'n DutchMan

    Fly'n DutchMan Karting

    Oct 4, 2005
    Agoura Hills CA
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    Sander Brouwers
    Concur, especially in the last 5 years with all the purchasing using home equity lines that have evaporated...something that did not happen nearly as much 10 years ago.
  5. Drive550PFB

    Drive550PFB Two Time F1 World Champ
    Rossa Subscribed

    I don't know what you consider super wealthy, but I would think that most people agree that this kicks in at about $100 million.

    I know lots of guys with Ferraris that are not even millionaires. THere are more owners that have net worths less than $5 million. That's not super wealthy in my book.

    The reason that prices are failling is that guys who have $1 million mortgages are seeing their interest rates tick up and cash outlays are rising. WHen this occurs, a sports car (that gets poor gas mileage) becomes a source of instant money--and a few years' breathing room on expenses and the mortgage. When this becomes widespread, prices fall. Search my posts from a year ago. The current circumstances (even before subprime problems) was obvious to many people.

    By December prices will be down another 15% to 20%.
  6. Drive550PFB

    Drive550PFB Two Time F1 World Champ
    Rossa Subscribed

    In the words of Ed McMahon, "You are correct, sir!"
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  8. toshiba

    toshiba Formula Junior

    Jan 14, 2008
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    are you kidding ??!!
  9. ferrame

    ferrame Formula 3

    Mar 2, 2005
    Orange, Calif
    I don't think they'll drop that much by December.
  10. Scud M3

    Scud M3 Rookie

    Jun 6, 2008
    Walnut, California
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    I completely agree with your statement.
  11. scott40

    scott40 Formula Junior

    Apr 4, 2006
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    Not to get off topic, but who would sign up for a $1M mortgage with a variable rate??? Wouldn't you select something fixed with this size of loan?
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  13. DM18

    DM18 F1 Rookie

    Apr 29, 2005
    Hong Kong
    What a fantastic idea. Best of luck on your journey through the tunnel
  14. Drive550PFB

    Drive550PFB Two Time F1 World Champ
    Rossa Subscribed

    First, for Toshiba . . . I can name 3 or 4 guys who own 355s or 360s that live in houses/condos that cost $600K and these guys have $500K in mortgage debt. One of my friends is a "real estate developer" or so he calls himself. He has a 12 year old Mercedes SEC (which looks like a million bucks, but is worth $15K). He has a 360 with 30,000 miles on it and he has a payment of about $1,000 a month on it--which is MORE than his Mortgage payment. His net worth is--maybe--$400K. But, he is single and young, so he has no fear. I know a guy in Miami that has a $500K condo with a mortgage; an Escalade and a 430 Spyder that he is leasing for $2700 a month--again, higher than his mortgage payment. His father co-signed the lease and his net worth is less than $300K--But he is popular with the ladies because he has a nice car, nice clothes and a big Rolex Gold Daytona on his wrist. (Not meant to be mean--I have a Daytona, too).

    For scott40, the examples are more extreme. IF THERE ARE MORTGAGE BROKERS OUT THERE PLEASE HELP ME ON THIS ONE. (I deal in commercial real estate) In my experence MOST mortgages of $1 million are variable rates. The Fannie Mae limits are, I think, about $417,000. I know the economic stimulus bill recently temporarily raised this limit to about $700K in places like San Francisco where housing costs are very high, but in general you are looking at low $400s to qualify for Fannie Mae.

    If you exceed Fannie Mae, you are going with private products from banks, insurance companies, etc that do not have the advantages of Fannie Mae. A friend of mine uses his stock portfolio to do a hybrid marginl loan/mortgage on his home. (He has to put the mortgage on, even though it is a margin loan, because he wants the mortgage interest deduction under the tax code.) Although I have a lot of equity in my home, I have a $650,000 two year re-set. What this means, is that my bank loaned me the money for 2 years at a fixed rate. Every two years, I have a reset of the rate based on the 3-year UST T Note. (I can fix the rate at any time, to a 20/20 loan at the 10 Year Treasuries plus 100 bp. by paying a 1% fee,)but some people do not have the luxury of fixing the rate--they have to do a full refinance.)

    May subprime lenders, especially CountryWide, routinely made $600K loan that were either (1) variable rate or (2) 3 year terms. What this meant was that you had to refinance in 3 years, because the loan matured. And, this is a form of a variable rate, because you had to get a new loan--there was not a lock period of 10 to 20 to 30 years. SHort term loans act as variable rate loans because you are subject to market forces when you refinance. Short term monetary policy is inherently inflationary, which is the point I was making in the beginning.

    Again, if there are mortgage brokers out there, please chime in.
  15. scott40

    scott40 Formula Junior

    Apr 4, 2006
    Full Name:
    Wow- guess I am way more conservative financially than I thought.
  16. LeonG360

    LeonG360 Formula Junior

    Nov 24, 2007
    To go back to the original topic of this thread, I disagree with the doomsday people. The values of all cars that are not something really special go down, no question, but the release of the 430 replacement will probably actually keep the 430 value higher. Look at what happened with the 360... A 4-year old car in good condition is still selling in the mid 170s, the sticker on the car back in 2004/early 2005 was around 200K, so a drop of just over 10%. I think that the major reason for this is the high, over-sticker pricing of the 430s. The same thing will happen once the 430 replacement will come out. As far as the economy, it is all cyclical. We are in a bad cycle now, but in 2-3 years (around the release time), things could be a lot better. Just dont know. My opinion is, if you can afford the car, just get it and enjoy, dont worry about depreciation!!!

  17. Mark from Ork

    Mark from Ork Formula Junior

    May 29, 2007
    Miami Biatch
    Goddammit, you mean now I have to get a Rolex too? Sh*t this game never ends...
  18. Gary(SF)

    Gary(SF) F1 Rookie

    Oct 13, 2003
    Los Altos Hills, CA
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    Gary B.
    #65 Gary(SF), Jun 7, 2008
    Last edited: Jun 7, 2008
  19. racerdj

    racerdj F1 Veteran
    Silver Subscribed Owner

    Jan 19, 2003
    Full Name:
    Now that's depreciation!!
  20. Drive550PFB

    Drive550PFB Two Time F1 World Champ
    Rossa Subscribed

    Leon: Your fact patter misses an essential point of the equation . . . the economy right now and for the next 2 years will be terrible. There will be no economic "inflation" in the normal price of a depreciating asset. In fact, becuase there has been an imbalance in prices--they have been unusually high and above sticker--the fall will be exaggerated and prices will fall more.

    Mark from Ork: LOL! Girls with big hair and big boobs like the rolex. Of course, if you are on F-Chat, you may prefer the discretion and elegance of a Patek. (Then again, if you are out for a one-nighter, you can go online and get a knock off rolex--most girls impressed by that kind of thing will not know the difference after a few drinks.) (I am in the south . . . so forgive me this joke . . How does a southern girl tell you she is ready for sex? She says, "I am soooo drunk." How does she tell you she is ready for sex NOW? She says, "I SAID I AM SOOOOO DRUNK!"
  21. toshiba

    toshiba Formula Junior

    Jan 14, 2008
    Full Name:
    YEAH, me too!
  22. rjsmd

    rjsmd Karting

    Apr 20, 2008
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    #69 rjsmd, Jun 7, 2008
    Last edited: Jun 7, 2008
    I agree that there are a few 2004's with asking prices in the 170's, but this seems to represent the high end of the market for that year. Many low milage examples of the same year can be found with asking prices as low as the high 150's, with most asking in the 160's. Given that most sales will probably go through at $2-10K back of the asking price depending on a number of factors, it's not unreasonable to suggest that 2004's have actually depreciated 15-20%. I will nevertheless use a depreication of 10% to make my point. For purposes of illustration, I am referring F430 to spiders, because it seems to me that the early F430 Spider market is presently the one most overvalued. 06 examples are still routinely listed with asking prices $50-80K above their $215-245K MSRPs. Even if depreciation were limited to a cumulative 10%, in year 4 said cars might be predicted to fetch $195-220. Therefore, it would be far from inconceivable that one might experience a depreciation of $70-100K, or more, over the next 2 years if buying such a car today.

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