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Ferraris for investment

Discussion in 'Ferrari Discussion (not model specific)' started by tohubohu, Jul 6, 2008.

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  1. tohubohu

    tohubohu Karting

    Jun 23, 2008
    85
    NY NY
    Full Name:
    John Ford
    #1 tohubohu, Jul 6, 2008
    Seeing what seemed to be a pronounced dip in the market, I had been looking to buy a 550 for several months and just did. I’ve also been lurking around these forums all this time and I’ve read a great deal of helpful talk about the investment potential of Ferraris. I’ve had some thoughts of my own, and I’d like to hear what other owners and buyers are thinking. Sorry if I take up too much space.
    First of all much of the discussion seems to center on the choice between going short and going long. The former seems to me a reliable prospect only for dealers, insiders, and those who are far more well-heeled than I am. Reliable short profits come from very narrow margins, margins that depend on ready cash flow, the ability to buy and sell quickly and without tax liabilities, global information, and access to storage space. This is a licensed wholesale world that ordinary buyers just don’t inhabit.
    Going long is problematic in other ways. The equivalents to management fees in a stock portfolio are astronomical when it comes to cars. Right away buyers are hit with (all or some of): a chunk to the state, insurance costs, finance costs, storage costs, fuel costs, and maintenance costs. Buying a car is a little like buying a house—you have to take into account its use value, but no one needs a Ferrari in the way they need a roof and running water. The use value is in pure self-indulgent pleasure—it had better be there.
    The very best I’m hoping for, in terms of raw dollars, is to break even, and if I’m even going to do that the car’s value is going to have to increase pretty dramatically in the long term. In general, such a prospect comes down to a few factors: production numbers, aesthetics, and time (provenance, maybe, but only in the case of some pretty rarified provenance). Production numbers are easy. F-40’s, F-50’s, 288 GTO’s are not going to tank unless the whole economy does (in which case this discussion is moot).
    Aesthetics are where ordinary individuals get to exercise their judgment. I once saw a 400 GT advertised as “arguably Ferrari’s most beautiful car.” The market value of 400’s, as far as I’m concerned, is a verdict on that “arguably.” Aesthetics, besides, have to do with more than sights, sounds, and other palpable sensations; here we wander into “mystique,” a real market force but tough to measure. I tend to think that Testarossas are down not only because they’re ugly-very much a matter of opinion—but also because they belong to an era when Ferrari had to some extent hit the skids. The myth of Ferrari, for those of my age, got a little shaky starting about 1975. 308’s don’t “mean” Ferrari to me, and I think Giugiaro designs of roughly the same vintage, Bora, Merak, Mangusta, are better examples of the nascent mid-engined era. Again, this is all a matter of aesthetic opinion, but the market seems to bear it out.
    For us poor folk, it helps to remember that the trade-off between production numbers and aesthetic value varies, and sometimes sides with aesthetics. In terms of ultimate value the rare cars tend to have it, but it isn’t just the scarcest and most expensive cars that hold value. I don’t think there are as many Lussos out there as there are 275 GTBs, but I’d rather have the GTB—I think it’s more of a Ferrari—and so would a lot of other buyers. And four-seaters are down, and always will be, not because there are more of them, or because they don’t perform as well or aren’t as pretty, but because Ferraris are sports cars, not passenger cars.
    Finally (I know) there is the vague transition from cars that people drive to cars that people collect (call them vintage, call them classic), and this is where time comes in. In the case of the 288 GTO, the transition was roughly instantaneous. In the case of the BB, it took some years but it made all the difference as to value. That and the fact that Boxers are beautiful and are Ferraris in some ineffable way, or so I think.
    Anyone got an Iso Grifo they want to trade?
     
  2. fenzoman

    fenzoman Karting
    BANNED

    Jun 19, 2008
    194
    #2 fenzoman, Jul 6, 2008
    I don't know what you mean by "tank", but I'm seeing F40s go for $200K less then they did a year ago. Enzo's are crashing hard too.

    There are few, if any, Ferrari's that are sure bet investments. Those with very low production numbers will hold their value best over time, but may or may not play out as a decent investment in the long term. Much will depend on what the next generation does or does not see in Ferrari.

    This is a market for car lovers. Wait a few months as cars are still dropping considerably, then buy what you want to keep.
     
  3. Prugna 328

    Prugna 328 Formula 3

    Sep 10, 2003
    1,233
    L.I.N.Y.
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    Gregory
    #3 Prugna 328, Jul 6, 2008
    Forget the investment, drive, enjoy.
     
  4. Modeler

    Modeler F1 Veteran

    May 19, 2008
    7,330
    State of confusion
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    a.n.other
    #4 Modeler, Jul 6, 2008
    Compared with fine art Ferraris perform badly as an investment. Thats without even factoring all the extra overheads the car has.
    No way around it. Entropy prevails and performance costs.
    Buying a good desirable car when the market is down and selling when its up isn't an investmant.
    Its reducing the costs of your performance through good business practice.
     
  5. Bullfighter

    Bullfighter Two Time F1 World Champ
    Lifetime Rossa Owner

    Jan 26, 2005
    22,594
    Gates Mills, Ohio
    Full Name:
    Jon
    #5 Bullfighter, Jul 7, 2008
    Aesthetically, Ferrari didn't enter the modern era till the Daytona, and from my perspective the Boxer/308 design language was the birth of the modern Ferrari exotic. That design is nothing less than iconic. In fact, the 308 would take second only to Porsche's 911 in terms of global recognition. It put Ferrari on the map. Without the 308, Ferrari might have become another TVR or Lotus. More importantly, the 308/328 marked the birth of the Ferrari as a reliable sports car -- one that normal guys can afford to keep maintained and even take for a good drive on occasion without calling for a tow. Try that with a Merak.

    Not sure I understand how a Boxer can "mean Ferrari" to you while a 308 doesn't. They are basically the same design, done very nearly at the same time by Pininfarina. If one had to be named as more emblematic of Ferrari, the 308 would be the car.

    The TR was a controversial design in 1985. I didn't love it. To say that the '80s were bad era for Ferrari because you don't like the TR, however, is to miss a lot. The '80s brought the injected Boxer, the 328, the 288 GTO and F40 -- probably the best cars made under Enzo's watch, if you don't get all wobbly with nostalgia for the old cars, where the engineering was often comically bad. These are cars that start when you turn the key, don't rust in the morning dew and which you can actually drive.

    Moreover, we don't know how time will treat the TR. I already miss seeing them, because in a sea of 360/430s a TR was the last "bad boy" design to roll out of Maranello. (The F50 is a bit Jetsons, and the Enzo is too Transformers...) I've been keeping an eye on 512TR prices, and these cars have not crashed in the market at all. There are enough guys who like them, apparently, to support $120K for good one. At the moment, there may not be enough guys to support the earlier Testarossa prices in addition. But for the same reason Countach prices are holding or rising, the outrageous TR may yet have its day.

    The market has not borne out that the Bora or Merak are better or more desirable. Given that over 10,000 308s left Maranello, it has held value astonishingly well, whereas the others are cheap oddballs given their comparative rarity. In fact Hemmings Sport & Exotic did a feature last year, and I think the Merak was there as a forgotten '70s car.

    Finally, low production numbers and all this wistful looking back to the good old days are useless when it comes to keeping your car on the road. I can't say it's always easy, cheap and convenient to get parts for my 328, but with 7,000 of them produced there is a critical mass, so I was able to buy a replacement coolant tank, warning light, gauges, etc. If there had been 20 328s made, the car would be worthless to me as something to drive, and I'd probably go broke trying to get spares. That said, the car is rare enough that the only time I see another is at Ferrari show or club gathering.

    In the real world, the 1980s were a remarkably good era for Ferrari.
     
  6. Bullfighter

    Bullfighter Two Time F1 World Champ
    Lifetime Rossa Owner

    Jan 26, 2005
    22,594
    Gates Mills, Ohio
    Full Name:
    Jon
    #6 Bullfighter, Jul 7, 2008
    That too.
     
  7. 208 GT4

    208 GT4 Formula 3

    Dec 27, 2003
    1,769
    Brighton (UK)
    Full Name:
    Dan
    #7 208 GT4, Jul 8, 2008
    My thoughts...

    I think the 246 Dino would be a safe bet in terms of holding or further increasing it's value with comparatively low running costs.

    The Testarossa seems incredible value, but they did make an awful lot of them and they're expensive to keep on the road.

    The 308 GT4 will do well in % terms, but at current prices even a sizable % increase in value will quickly be wiped out by running costs.
     

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