F50 Valuation: A Spectrum

Continued…
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And for the last one, here is one page of the 19-page History Summary which reveals the history of the car over its 28 year life since delivery in ‘96 to the present. Such summary allows to see the whole life of the car like a movie and is chronologically matching with the history folders which will contain the invoices/documents related to each bullet point in the summary. I believe this is essential to understand, in depth, the history of the car and where the gaps might be.

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Yesterday in the F50 thread (post #4656), I discussed the Ferrari market coming out of hibernation with a bang (point 1) and the growth in value of the F50 model itself (point 2). I would like to follow on with point 3, which was:

3. The quality of the specific car/example of the model (F50 here). Different features (how a given car ranks on the various dimensions of quality e.g. originality or condition) impact the value of a specific car. You can visit the thread F50 Perfection: A Guide to Excellence for the drivers of quality, and you can also visit the thread F50 Valuation: A Spectrum to see how these drivers of quality can determine value by using the Bloodline Valuation Model discussed in post #15.
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So let’s remember that in the Bloodline Valuation Model (summary in earlier posts in this threat or in my book), we compare various F50 cars on key dimensions of quality e.g. history, condition or mileage and each car will get a different premium for each dimension depending on how good they are versus a reference car of known value.

Here is a set of dimensions and associated premia.

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Note that the premia apply over and above an ‘average quality’. So a ‘condition as-new’ car will get an extra 8% (of the value of the base car with average condition). Similarly, an ‘excellent condition’ car might get an extra 6%

Not shown are the premia of having a different colour than red for F50s. I put a 20% premium for yellow colour. I also put a 5% premium for a US-Spec car vs a Euro one. So a red car with everything exactly like the RM yellow F50 but with Euro spec and red in colour (call it Base Red Euro F50) will be valued at $7.4m and the RM yellow at $9.2m. Then we compare the target car with the Base Red F50 on the key dimensions and assign the appropriate premia. The value then follows. Of course you can apply different premia but the overall value insight and direction will hold.

Let us look at three example.

The first is a 3,000 km red F50 (which gets a premium of 5% for its lower mileage compared to the 8,600 km). It ranks close to the Base F50 in condition, history, service, and accessories. However, it has the original Warranty and Service book which the Base F50 does not have given that the RM yellow car did not have it. This is quite essential to me and I give it an extra 5% for its presence (this along original paint and being accident-free are crucial for me and might even be deal-breakers).

So that is how the value of that car will be calculated:

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Example 2 is a 25,000 km yellow F50, with same condition but less history documentation and less service/maintenance. Condition is assumed the same. And it is also presumed that it lacks its original Warranty and Service book.

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This car will get a discount of 15% because of its high mileage of 25,000 km versus the 8,600 km Base car as well as 20% premium for being yellow.

Example 3 is an F50 with the same mileage of 8,600 km. It red and Euro-spec. It has the best condition and ranks tops on history, service, and accessories and retains all its original books.

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I hope that this sheds some light that it’s not just low mileage or special colour or superb condition that sets an F50 value and one needs to dig deeper.

There are other dimensions which are important like originality but to keep things simple we leave them out from these calculation. (Sometimes they a linked to dimensions mentioned- so for example condition and originality are closely linked: you cannot have excellent condition if it’s not original!). The RM yellow car had a repainted front bumper (it should be penalised by some 2% for that - if a repainted car looses some 15% compared to an original one).

Finally, some might argue how about the benefit that the yellow car was owned by a designer and renowned collector? To me it means nothing at all, but if for other it is important then the yellow RM car must have a further premium of say 3% ($221,880) or 5% ($369,800) and the value of each F50 in the examples will reduce by such an amount (with a column at the end: ‘Not Owned by Celebrity -3% or -5%’).

 

Hi Serob,

Let me just open with a small note, namely, that my reflections on the change in F50 values is not just from the sale of the RM car but also from the result of growth in other Ferraris sold at the auctions (see post #4656 in the F50 Thread).

You raise a good point and I would say:

• The premium should result from a combination of attractiveness and rarity (not just the latter)
• different people might put different premia
• Premia also change with time - I guess in the second half of the nighties/ first half of 2000’s, the premium was for red).

More concretely, I would have yellow on top of attractiveness. I have seen all colours and the F50 in yellow is just sublime and peerless. Others might go for rarity and so give a higher premium to some other colours. But even for the same production number for each of black and silver, I would rate black higher than silver.

I personally would not buy silver or Barchetta red, and have a 20% premium on yellow and may be 25% on black.

One last word, colour is just colour: I looked at two black F50s and rejected both (there are many aspects to a good/beautiful F50).

But some would pay a 500% premium for a two tones and letters across the top…

 

For those interested, I refined yesterday's valuations of the three F50 examples using the Bloodline Valuation Model methodology.

I gave an additional premium to the RM yellow F50 for its celebrity former owner and a discount on originality (as it had a bumper repainted) and a discount for not having its original Warranty and Service book.

The Base F50 has reduced to £7.5m, the 3k km red F50 is now at $7.9m, the 26k km yellow F50 at $7.7m, and the same mileage 8.6k km red F50 at $8.8m.

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