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Is there a mileage rule of thumb?

Discussion in 'Ferrari Discussion (not model specific)' started by LSU348, Dec 23, 2003.

  1. LSU348

    LSU348 Formula 3

    Dec 19, 2003
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    I have been searching high and low for some resource that will give me a basic idea of what each mile on a car does to its value. What I mean here is say I am looking at two pristine 85 308 QVs. One has 30,000 miles on it...one has 80,000 miles on it. Is there some fair way to determine the hit in value the 80k miles car takes over the 30k miles car? The common price guides do not allow for any mileage estimation in their prices when looking at 85 models. I am going to graph a few more modern Ferraris and look for a trend.

    Thanks for any advice...specifically looking at a 85 308 GTB QV with some serious mileage...82k.

    -Mike
    Houston, TX
     
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  3. thecarreaper

    thecarreaper F1 World Champ
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    good luck............ i have been wondering EXACTLY the same thing. a board member sold a nice ( gold) 79 308gts with 80k something miles on it. looked like a nice car....... for around 15k. true a QV is more desireable in the hierarchy of the 308, but i have been bambozzled and flabbergasted at the large swing in prices. documented history since new, good compression , PPi ect all play a major role for sure. but 28k to 30k for a low to mid miles car ( 25k to 60k miles) and many with 60 to 100k miles bieng in the 27 to 30 k range?????? what is up with that??? by 60k miles a valve job should have been done, during all the cam belt changes the tensioner bearings should have been replaced AND lets not forget the valves bieng adjusted. every car i have called and looked at, i got a I DUNNO blank stare answer, my other favorite is when some sellers say they have the documents ( all of them) and think that you will buy the car with out them since you were stupid enough to drive 5++ hours to look at the car. i would rather buy a BEATER 308 and take the damn car apart than pay 25++k for a 25 year old car that needs everything!!!! i have had more 20++ year old cars than most people. i have learned many, many things. one thing is clear.... the driving force of the sale, is how serious the "NEED " is to actually sell the car. some could care less if/when a car sells, others "NEED" it to sell, hence the FERRARI PRICE PARADOX as i call it. just my .02 sorry if i vented a little.
     
  4. LSU348

    LSU348 Formula 3

    Dec 19, 2003
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    I have a feeling some need to buy/want to sell factors are always involved. Thanks for confirming there is nothing out there...guess there are too many uber Ferraris for anyone like Hemmings or Edmunds to put and sweat on older models. Once it is 2020 or so they willpay attention to the 308 again.
     
  5. Mitch Alsup

    Mitch Alsup F1 Veteran

    Nov 4, 2003
    7,058
    The 85 with 30,000 miles has been driven just over 1,000 miles per year since it is now at least 28 years old.
    The 85 with 80,000 mies has been driven just over 3,000 miles per year since it is now at least 28 years old.

    1,000 miles is not enough miles to keep the various seals working properly, and may represent a liability down the road (like 20 miles after you buy it).

    80,000 iles, on the other hand, is enough to keep the seals working but butting up against various wear issues {cylinder bores, pistons, rings, bearings} that older engines of this ear face.

    Both cars are of an age where all the suspension bushings need replacing and any other suspension and braking issues need taken care of.

    Neither car can be bought for co9ntinuous driving until either is cully checked out and brought back to spec.
     
  6. wax

    wax Four Time F1 World Champ
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  8. thecarreaper

    thecarreaper F1 World Champ
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    well said Mitch, LSU308, sorry for my ranting post, i really have been dumbfounded by the wide swing in miles and price. and i believe the QV will be worth more than even the carb/fiberglass cars later. i want a carb fcar because in know carbs so well. i have a rotating collection of 25++ year old muscle cars that i play with. after working on jets all day, i dont want to fight with more computers and fuel injection but that is just the way i am for now. i watch several sites since i have been selling off cars to make room for a fcar, and the only constant in 308 series pricing is, that there isnt a constant! i dont want to finance so i am going to be stuck in the 25k or less cash range for some time, no QV or 328 anything for me it seems! i like the gt4 cars so i may luck out and find a nice one. the lack of responses to your post bothers me as there are some really great folks here, all i can say is i wish you the best of luck in your QV quest, please post pics for the rest of us. happy holidays.
    great link WAX thanks, i can use the info as well.
     
  9. Sin

    Sin Karting

    Nov 28, 2003
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    Mark
    I think you mean 18 :)
    Therefore, 85 with 30,000 miles = 1700/year, 85 with 80,000 = 4500/year
     
  10. norm

    norm Karting

    May 30, 2003
    204
    Rochester, NY
    No matter how you cut it, an 80K mile car is an 80K mile car. People aren't exactly beating doors down to buy 80K mile cars. Any car with those miles needs compression & leakdown test. Also what major components have been replaced, ie: alternator, water-pump, AC compressor, etc. These are all wear items, with mileage effecting wear.

    If you want a cheap 308QV, high miles may work for you. But, when time to sell, it could be slow to move.

    As to the low mileage car, 30,000 miles for an '85 isn't unusually low. also not unusual for a Ferrari not to be driven in crap weather or rain, depending on how partricular owner is. As to if leaky seals, this is easy enough to determine with a PPI. But, a Ferrari that has some type of oil leak is far from unusual.

    Personally, if I wasn't buying the high mile car dirt cheap, I would pass for a car with less miles.
     
  11. wax

    wax Four Time F1 World Champ
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    That's simply because of the major holiday - Dec. 24, 25, 26 possibly had less combined traffic than Dec. 27 will.

    But you're right - 99.9% of the membership is on the up-and-up - the other .1% has either already been banned (3), with another (1) soon to follow.

    http://www.qv500.com is a great let-your-fingers-do-the-clicking resource that should be on everyone's "favorites" list
     
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  13. thecarreaper

    thecarreaper F1 World Champ
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    good point WAX!
     
  14. LSU348

    LSU348 Formula 3

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    Thanks for the link Wax.
     
  15. tatcat

    tatcat F1 Veteran
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    i think i,d be more concerned about maintenence history than actual mileage. i've got an 19 year old van with 69k on it ( wax do the math) and the thing is barely holding itself together. i don't think overall mileage should be the determining factor. a nicely kept and recently majored car with 100k seems more valuable to me than a low mileage garage queen. OMO
     
  16. LSU348

    LSU348 Formula 3

    Dec 19, 2003
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    Opinions requested now:

    In your opinion, what is the value of a 85 308 GTB QV if it is in good running order; Black; 82,000 miles; all original. Service book stamped by Ferrari dealer (not sure if that can be verified) and all other work has receipts. Assume a PPI has been passed with no major service needed. Wheels are NOT stock but not obnoxious either.

    This should be interesting.
     
  17. 4Webers

    4Webers Formula Junior

    Nov 12, 2003
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    I found this somewhere on the internet a year or so ago. It is from 1996, so I don't think that the formula that contains the age of the car is valid any more. It's still an interesting read...

    **************
    This article is an example of an Economics 325 Project. It was originally "published" in a slightly different form in Ferrari Pacific, July 1996

    Determinants of 308 Asking Prices
    Instead of a story about the joys of driving a Ferrari or the perversity of owning one, let's talk about Ferrari 308 prices.

    Most of you probably know of economists as those policy gnomes, i.e. "nerds", that give conflicting advice to any and all about economic questions. However, we sometimes research some really important topics, such as: "Will this year's Bordeaux rate highly or be a complete bust?" or "Is Christmas necessarily rational and efficient?" or "Is Michael Jordan underpaid relative to other NBA players for what he does?" In this same spirit, I offer an analysis of the determinants of asking prices for Ferrari 308s.

    Economists often use a statistical technique called "multiple regression analysis" in our research. Although this may sound like a psychological reference, multiple regression analysis is simply a tool that, among other uses, can allow us to find out 2 things. The first thing this tool does is to determine whether a particular quality or attribute of an item is really related to the item's price. The second thing multiple regression does is to estimate how much each of these different qualities contribute to price. In the case of NBA players' salary compared to Michael Jordan's salary, multiple regression can be used to determine what player qualities - number of rebounds, points scored, minutes played, etc. - contribute to a player's salary and then estimate the average contribution of each quality - $1,000 per point or $500 per rebound, for example - to the player's salary. Given a regression analysis of NBA salaries and Mr. Jordan's player qualities, we can then estimate his rightful salary. In terms of Ferraris, we can first determine what qualities contribute to the asking prices of 308s and then estimate what the actual dollar amount of these qualities. For example, are 308 spyders really priced higher than 308 berlinettas? If so, how much higher?

    The data economists have available will many times determine how specific our analysis can be. I used data from Roush's Ferrari Market Letter for the first 3 months of 1996. As a result, this means I only look at 308 asking prices, can only reference early 1996, and am limited at measuring qualities that are contained in the ads. In economics, all these caveats are called listing your assumptions and limitations. It also means we can cover our backside when something doesn't work out right.

    The different car qualities or attributes that are available from this data are miles, car age (96 minus model year), fiberglass car, carburetored car, spyder, and 4-valve car. We expect that more miles will lower the asking price; older cars will have lower prices; (We're talking 308s and not classic V-12 Ferrari's here.) fiberglass cars, spyders, and 4-valve cars will command a premium, and carburetored cars could either increase or decrease the price. The ambiguity behind the carb cars arises from two different arguments. One argument is that carb cars are more desirable because of their simplicity and power delivery. The other argument is that the injected cars are priced higher because of their ease of maintenance (once dialed in) and their ability to pass California smog tests.

    If you've read this far, you've probably said, "How can you compare all these dissimilar cars?" Well, one additional feature of multiple regression analysis is that it can estimate the effect of a change in a single car attribute holding all other attributes constant. In other words, the analytic technique allows us to (statistically) compare two 308's with identical mileage, age, induction, body material, and valve configuration to determine if the spyder is really worth more than the berlinetta. Finally, this analysis is about "on average" differences and not prices for specific cars. Like the sticker says, "Your actual mileage may differ from EPA estimates."

    The results of the analysis are shown below. I actually did two regression analyses. One includes the variable (attribute) "Age." The other does not include "Age." The reason for the two analyses has to do with statistical theory which constantly threatens to overwhelm this article.(1) Let me briefly discuss how to read the table.

    For each model, there is a "Coefficient", i.e. numbers for each variable (car attribute). Each coefficient represents an estimate of the effect of a unit change in each variable on the price of the car. For example, in Model I, each extra thousand miles decreases the price by only $144.42; each additional year added to the age of a car decreases the price by $965.40; a fiberglass car is priced a whopping $15,135 more than a steel car; a carburetored car is priced $1,949.81 higher than a fuel injection car; a spyder is priced $2,305 higher; and a 4-valve is also higher priced at $1,668.37.

    Model I:

    PRICE=51,185.58-144.42*MILES-965.4*AGE+15,135.11*FIBER+1949.81*CARB

    +2305*SPYDER+1668.37*QVALVE

    Model II :

    PRICE=35,564.27-133.33*MILES+14,115.29*FIBER-826.09*CARB+3370.73*SPYDER

    +4291.13*QVALVE

    Regression Statistics

    Model 1: R2 = 0.743; Model 2: R2 = 0.730

    Model 1: Std. error of regression = 3127.34; Model 2: Std. error of regression = 3204.23

    Mean of dependent variable = 36260.72

    Number of observations = 382

    The "T-statistic" is a measure associated with the probability that each variable is statistically related to price. An often used rule of the thumb is that a T-statistics that has an absolute value (drop the minus sign if you forgot your algebra) greater than 2, implies that the variable is statistically related to price. Using this "T-Test", all the variables are statistically related to price except for the "Carburetored" car variable in Model II. (The actual t-statistics are available on request.)

    The numbers at the very end represent figures for the entire analysis. The average price for 308s listed in the FML for the first 3 months of 1996 was $36,261. Approximately 95% of these prices ranged from about $30,000 to about $42,400. The regression analyses accounted for almost 75% of the price differences in cars. The data set consisted of 382 cars.

    I provide one last note on reading the models. There is a number just to the right of the equal sign, called a "Constant." This is the price of a car which has no miles, zero years old, and is not a fiberglass, carburetored, spyder or 4-valve car. In other words, the constant represents the price of a hypothetically brand-new GTBi magically time machined into the present. In Model I, the price is estimated to be $51,185. Coincidentally, that figure appears to be very close to the MSRP of a GTBi in the early 1980s.

    What can we conclude from this economically excessive exercise? One, people should all get out and drive their cars more. The effect of an additional thousand miles seems to be minimal in terms of depreciating a car by only $134-144 per thousand miles. Two, the premium of fiberglass cars is fairly steep. They are priced higher then the early steel cars for their lower weight and lower susceptibility to rust, but $14,000-$15,000 more seems to me like a lot of money. On the other hand, the extra performance given by a 4-valve engine seems relatively cheap at an estimated $1600 to $4300. Four, spyders are priced higher than berlinettas but not a lot higher. Finally, the jury is still out on valuing carburetored cars.

    By now you've probably all surmised that I own a 308.(2) Did I actually do all this research in order to purchase my car? Quite frankly, no. This is all after the fact. As a long time Italian car fan - I went through a Fiat, two Alfas, and a Maserati. I still own a Ducati in addition to the 308 - I followed the long tradition of best car I could afford plus 10%.

    Notes:

    (1) The statistical problem is one termed multi-collinearity. The age of 308s is highly related to some of the other variables: fiberglass car, carburetored car, and 4-valve car. As a result of this correlation, the estimates of the coefficients and t-statistics for age, fiberglass, carburetored, and 4-valve may be biased (estimated incorrectly).

    (2) For all you non-numerically challenged members, the estimated asking price of my 73 thousand mile, 14 year old, GTSi using Model I is $29,432.32. Using Model II, the asking price is estimated to be $29,128.91. These estimates are calculated as follows:

    using the coefficients in Model I as:

    $29,432.32=51,185.58-144.42(73)-965.4(14)+15,135.11(0)+1949.81(0)+2305(1)+1668.37(0)

    using the coefficients in Model II as:

    $29,128.91=35,564.27-133.33(73)+14,115.29(0)-826.09(0)+3370.73(1)+4291.13(0)

    The actual asking price was $28,900.
    ***************
     
  18. LSU348

    LSU348 Formula 3

    Dec 19, 2003
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    Thanks a monster ton 4webers! That formula confirmed some rules of thumb I have been grinding out the hard way.

    OK...time to talk turkey with the owner.
     
  19. branko

    branko F1 Rookie
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    4Webers, coming from an engineer background ( my Father was an engineer for NASA) your analysis was well formulated. My hat is off to you.
     
  20. 4Webers

    4Webers Formula Junior

    Nov 12, 2003
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    The only thing that I can take credit for is doing a Ctrl-C and a Ctrl-V. :) Statistics wasn't my favorite class.
     
  21. Mike328

    Mike328 F1 Rookie
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    So these formulas were derived from 1996 data... What are your thoughts on their applicability now, i.e. their ability to predict future values?

    It would seem to be very difficult to use this data now to derive used 308 values--we would need formulas derived with more recent data...

    Just as a data points, consider these formulas applies to my car. 1978 308 GTS. Carbureted. Spyder. 2-Valve (Non-QV). 59k miles. Steel-Bodied. 26 years old.

    Of course, I suspect that these results are unfounded because we're using age=26 when the oldest 308 in 1996 was 20 years old...

    Alas, here goes.


    Model 1:
    PRICE=51,185.58-144.42*59-965.4*26+1949.81+2305
    ** 21819.21 ***

    Model 2:
    PRICE=35,564.27-133.33*59+826.09+3370.73
    *** 31894.62 ***

    For my particular example, there is a great disparity between Model 1 and Model 2.

    My common sense feeling is that Model 1 aggresively undervalues on the basis of age.

    Data point: August 2002. (24 years old instead of 26, changes value to 23750.01).

    Ferrari of Central Florida asked 33.5, then dropped to 31.5, car sold for 29.5. Excellent condition all around...

    I would reasonably expect to sell the car for say 24k to 26k now.
     
  22. FerrariFrank1

    FerrariFrank1 F1 Rookie

    Aug 15, 2003
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    Besides my '81 308 with 18,000 miles. I own a '91 'Vette with 178,000 miles that has always been serviced and taken care of properly. This car runs very strong,and if you didn't see the odometer,you'd think that it was a 40,00 mile car. (minimal scratches,chips and swirls in the paint) No smoke. Still very fast,and Torquey. No weird noises or squeaks,rattles, etc... Still drives and handles "tight". And,I believe that Ferrari engines are superior than Chevy engines. I also once owned an '86 Porsche that had 160,000 on it. Ran like a new car. And,the car looked like it was new. Once again,think that the Ferrari is better. But,mileage doesn't matter to me. Condition and service history does. If I want to sell my 178K mile 'Vette. It will only appeal to very few who feel the same way that I do about automobile condition and maintenance. But,when I sold the Porsche,made a few hundred $$ because of it's cleanliness,and the new buyer knew that in it's condition,could easily get it over 300,000 miles before any major service or rebuilding. So,the car still had alot of life in it. If you buy the car with 80K. just plan on keeping it,and not worrying about resale. If it's in good condition,regardless of mileage,that car should always be worth high teens,low 20's. No matter what. But,as long as you buy it for that,you should be O.K.
     
  23. Ontogenetik

    Ontogenetik Karting

    Nov 2, 2003
    149

    Assuming the aesthetics are good, ie. average, $28k abs max.
     

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