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My calculations for actual ownership cost of a $130k F430

Discussion in '360/430' started by MikeR397, Feb 22, 2011.

  1. Texas Forever

    Texas Forever Four Time F1 World Champ
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    That's what I did on a Stradale. Round trip cost was sales tax, and $1,000 for respraying the front bumper after two track days. :)

    Napolis, a while back, gave a $3 a mile number, and that didn't include gas, tires and so forth. And that's basically what the Maranello cost me after 5 years and over 20,000 miles.

    So new is the way to go, but be careful trying to catch a falling knife. My old Maranello sold new for $225,000. Original owner drove it 8,000 miles and sold for $200,000.

    Second owner drove the car for 800 miles and sold to me for $115,000. OUCH!!!!

    I sold for $75,000 in 2008, after putting another $20,000 into the car over five years.

    Say you buy a new F458 at sticker for $250,000. If you drive the car for 8,000 miles, you would need to get roughly $225,000 or 90% of sticker to yield $3 a mile.

    Keep in mind some F599 owners paid $350,000, drove for 8,000 miles and sold for $250,000.

    So how lucky do you feel?

    YMMV

    PS You should also start another slush fund to pay for those "special driving citations."
     
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  3. MikeR397

    MikeR397 Formula 3

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    #77 MikeR397, Feb 24, 2011
    Last edited: Feb 24, 2011
    You can indeed write off interest on your HELOC loan (up to $100k prinicipal value limit though) if you use a HELOC for a car purchase. So, for example, if you borrow $200k on a HELOC at 3% interest, or $6k a year, you can only deduct (3% of the first $100k) = $3k annual deduction. However, the problem is that HELOCs are traditionally variable rates, and while we might have low rates for awhile longer, soon enough interest rates are going to jump up fast and hard to combate massive inflation. That is not really a problem if you keep cash ready to pay off the HELOC when this occurs though. Also, some variable HELOCs have fixed rate offer opportunities where you can convert some of your balance to a "HEL" fixed for the remainder of the loans period.

    For example, my Dad's HELOC was issued in 1996 for a 20 year term, prime - 1% rate (so currently 2.25%); right now I borrow on his line (he gets the tax duduction, I get easy, large, and cheap capital at 2.25%. He has the option to lock the outstanding balance on his line for the term (exp in 2016) at the average of his variable rate and the current variable rate being offered by that bank for new HELOCS (about 4.40% or soemthing close to that), which is currently 3.125% average. I have tried for a year now to convince him to do a full draw (I've done 80% draw) and lock that up until 2016 at 3.125% as that is such an insanely cheap rate for big capital that doesn't significantly damage your credit report! Unfortunately, he won't do it for, IMO, completely illogical reasons! Cash is king, and fixed loans at low rates that can be leveraged will be worth thier weight in gold in the next decade. Argh.
     
  4. MikeR397

    MikeR397 Formula 3

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    #78 MikeR397, Feb 24, 2011
    Last edited: Feb 24, 2011
    I wouldn't play this game, not anymore. Take the Scud as an example. Plenty of 2008's sold for a tick under $300k, were driven 1k-2k miles, and are currently being sold for ~$210k 3 years later. At 8% sales tax was $24k, $90k depreciation, gas, insurance, ect, and owners of those cars with 1500 miles just paid perhaps $90 a mile driven!

    I realize Ferrari made a lot of Scuds, relatively speaking, and the economy tanked in the meantime as well, but OUCH is right. Buyers of new ferrari's should basically be in a financial position where they just don't care about the money. If they run the numbers like I do, they should't be buying new. As srfcity said, if you run the numbers at all, perhaps you shouldn't be buying, but at least in my case, I did it b/c running numbers is what I do for a living and it was fun for me to do it. I am sure I'll blow plenty of $ on Ferrari's thoughout my life, even if I don't start until spring 2012.
     
  5. ReinD

    ReinD Formula Junior

    Sep 16, 2010
    464
    I was thinking, that there are probably eight groups of Ferrari owners:

    1. Those who have money falling out of their pocket. To these folks, $250K is like $25K, $2,500 or even $250. It's just lunch money.

    2. Those who had money fall from the sky. Inheritance, legal settlement, property sale, lottery, investment liquidation, etc. They are buying one and only one Ferrari with their new found wealth.

    3. Those who can comfortably afford a Ferrari, but don't have money falling out of their pocket. These people set aside money for 3-5 years and pay cash - or have enough cash flow to put some down and easily make the monthly payments.

    4. Those who can just afford a Ferrari. Either they blow their life savings - or with good credit, put a large some down, get a loan and can just make the monthly payments. These people make some sacrifices in lifestyle to own a Ferrari, but they are okay with these sacrifices.

    5. Those who own a Ferrari and have no intention of acquiring a newer one. They like their ride just the way it is and don't desire the latest electronics gizmos, Pininfarina styling or more HP. These are the happy campers.

    6. Those who owned a Ferrari. Yup, those were the good old days, but it's too rich for their blood these days. They had their fun and now they're done. At this point in their lives, they have other financial priorities, or are okay with driving something less expensive and can have just as much fun.

    7. Those who cannot afford to acquire a Ferrari, but acquire one anyway. Owning a Ferrari is fun while it lasts, but ultimately this crowd ends up without a Ferrari.

    8. Those who will never own a Ferrari. These are dreamers that don't and will never have the money - period. They talk about acquiring a Ferrari, but everyone knows that they are not even close.

    Did I miss a group? Does a group not exist? Does a group's description needs some editing? Chime in. :)

    The point of all of this, is that it doesn't really matter what group someone is in. If someone wants a certain Ferrari and can scrape together the money, that person is going to acquire or attempt to acquire a Ferrari, no matter what anyone else has to say about it. Did you listen to people when they told you that spending this much money on a car is ridiculous?

    Each person has to have "something" to spice up their life and for some, it just happens to be a Ferrari. In the big scheme of things, it doesn't really matter if we think it's a good or bad choice for someone, as he will soon find that out for himself. It's okay to try to dissuade someone, but don't expect him to listen. Some people just have to learn the hard way. In some cases, it is the right choice for someone and we just don't know it - and he doesn't know it either, but it ends up working out that way. LOL

    Anyway...
     
  6. vrsurgeon

    vrsurgeon F1 World Champ
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    Used PenFed for my car at 2.99% and I have to say they're fantastic! Capital at 3%.. that's less than inflation in my eyes..

    ReinD how about:
    10. People who own a Japanese exotic and come onto FChat "thinking" about getting an FCar but never do and chime in at every opportunity with a post touting their car..
     
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  8. yasir

    yasir Formula Junior

    Nov 5, 2003
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    #81 yasir, Feb 25, 2011
    Last edited: Feb 25, 2011
    '06 E55 bought new $94,000 currently has 42,000 miles ... so far the expense report
    Sales tax ---$5000
    Insurance---$2500
    Tires.......... 3 sets at $3000 installed
    Services: $5000
    Depreciation.......$60,000

    Total cost of ownership for 4 years: $78,000.......$1.8c/mile

    The cost of ownership will go down as we rack up the mileage. In ferrari case since the mileage doesn't go up but the expense is,so the cost of ownership goes up.
    So,whether you drive it or not,you are paying for having the toy.
    I would say,every car enthusiast should own a Ferrari atleast once in their life time. In my case,i love 328/355 but both models don't have enough power/torque for my taste.
    On a side note,saw a friends Scud the other day and i will tell you the car is pure SEX on the wheels. Lovely car.
     
  9. MamoVaka

    MamoVaka Formula 3

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    I am part of a credit union, baxter in illinois.. been with them for 15years and I think I got 4% on a car loan from them 5 years ago.. man 2.99 is great!
     
  10. Texas Forever

    Texas Forever Four Time F1 World Champ
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    Yep.

    I brought and sold three Ferraris in five years. My local dealer calls me Dr. Bottomfeeder. Was the trip worth it? You betcha.

    Will I ever buy another Ferrari? (My daily driver is a Porsche Cayman.) Doubtful; but, man oh man, have you seen the prices on F599s? Unbelievable!

    Dale
     
  11. mousecatcher

    mousecatcher Formula 3

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    Core inflation rate was 1.0% in 2010.
     
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  13. vrsurgeon

    vrsurgeon F1 World Champ
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    Uh-hunh. Sure it was. ;-) I believe the feel good gubment statistics.
     
  14. hardtop

    hardtop F1 World Champ

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    Dale,
    Gotcha beat. I bought five Ferraris in my first five years of ownership. Only three in the last ten though. I can't imagine I've bought my last one but don't have any plans currently. Also have a Cayman S for DD.
    You need to catch up!

    Dave
     
  15. MikeR397

    MikeR397 Formula 3

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    #87 MikeR397, Feb 25, 2011
    Last edited: Feb 25, 2011
    Credit cards used to offer 0% for the life of the balance. If you've got mega credit lines, that could be an option for arbitrage/capital too. Keep in mind that "life of the balance" is not perpetuity b/c you have to pay 2% of the balance monthly payment, which is 24% a year rough estimation, so realistically its a ~3.5 year loan, but at 0%. The other negative is that six figures of reported cc debt has a serious negative impact on your credit score health, where as a HELOC balance or car loan installment loan does very minimal damage, or could even help some people establish better credit.

    Too bad the easy days of 0% credit card money disappeared. The stuff today has 4% uncapped fees upfront and practically lasts 10.5 months.
     
  16. scycle2020

    scycle2020 F1 Rookie

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    potomac
    If you are getting 40% a year on any kind of consistent basis, then you can very soon buy an F40, F50, enzo, 430 spider, 458, GTO and what ever your heart desires and not care about what they cost to own!!!!
     
  17. MikeR397

    MikeR397 Formula 3

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    Hopefully, but you ever sit and watch water boil when you are really hungery for pasta?
     
  18. needspeed

    needspeed Formula Junior

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    That is not always true. I bought a new 05 NSX in Jan of 06 and drove it 24K miles in two years of DD and it was a great car for what it is. Then an 08 M3 to kill some time. Was bored of the M3 in about a year and replaced it with an X5M for my DD very fun for a brick.

    I had been thinking what toy should I get next and Ferrari was my choice and now have an F430 F1. I never mentioned the NSX until this post.........Thanks......Steve
     
  19. mousecatcher

    mousecatcher Formula 3

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    That's not feel good, that's danger territory. Deflation worries were and are very high. We want a couple percent inflation.

    FWIW I have a 2% LoC but still prefer to pay cash for toys.
     
  20. Ky1e

    Ky1e Formula 3

    Mar 4, 2011
    1,238
    FL
    No doubt there are all types of Ferrari owners and Ferrari lookers. Believe it or not my personal experience has been the opposite of what you'd think.

    A self made billionaire neighbor in the Forbes 100 drove a Honda Civic. A self made family member 7 figures/yr (sometimes 8) bought a Mitsubishi Eclipse because it was 0% for 60 months (he now owns a BMW3 series convertible). Both of them are the types that would do the analysis Mike the OP did and could not justify the expense of an exotic.

    I know only one person who has owned a Ferrari. He was also the flashiest of people I knew. Now many years later, I learn the $ was from his wifes trust fund, they spent all their money in 8 years, went broke, got divorced and he is currently living with friends (homeless you could say since he doesn't technically own a house or have a place of his own).

    Admittedly, these are opposite end of the spectrum extremes. There are more cases in the middle (which I would call normal). Point is its hard to draw conclusions with people because you just never know.


    Back to the OP/thread. Great info and analysis. To me buying a Ferrari is analogous to buying a boat or a country club membership. If you broke down the cost of a boat by the hour of use you'd be sickened and wonder why anyone buys one. If u broke down the cost of a CC membership by round of golf, it would be cheaper to fly from FL to Pebble Beach each round. It's about something more-- a passion, a need, a lifestyle choice, a freedom.

    Last point. There are some (myself included) that enjoy the hunt. The research an analysis is all part of the fun, passion and becoming intimately knowledgeable about your hobby (it can become OCD-like!). I did more research and forum talking about boating before I bought my boat than after owning it. And between boats, I notice I go back to the boating forums (but not much when I have one). Forums are great for info and research... I've already learned a lot here.
     
  21. Testacojones

    Testacojones F1 Veteran

    Nov 3, 2003
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    #93 Testacojones, Mar 23, 2011
    Last edited: Mar 23, 2011
    Do you think nature gives us something in return as time passes, not a damn, so why should we for money? Because money allow us to experience more things in life and makes us fell secured? Security is fear and a Ferrari owner has to learn to let go of fear. The reason how Ferrari happened, and the success of the Scuderia happened because of fearless men and acts. So how can we approach and experience the total Ferrari life and excitement when living in fear. We have to let it go and enjoy this privilege. I also have fallen to some sort of fear about Ferrari ownership like depreciation fear, maintenance fear, car breaking down fear, etc... But I realized that it's pathetic to be driving down the road or seating at home thinking about mathematical calculations while one can just jump in a Ferrari and have a blast.

    Reality is that the media, the government and society is an architectural box designed by the masters with the purpose of enslaving us so they can become richer and powerful. There's no escaping that reality, but we have at least some hobbies and one of those is owning a Ferrari. We don't need women in Nazi uniforms whipping us at the end of the week to get relieved. We are rebels and owning these cars not like a rebel is a betrayal to the Ferrari "spirit". So while we own these cars we should feel naked, free and accomplished, and nothing more but greatness.

    I feel like doing a burn out in front of a cop right now.
     
  22. vrsurgeon

    vrsurgeon F1 World Champ
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    "We don't need women in Nazi uniforms whipping us at the end of the week to get relieved."

    Well... actually the thought of a rather buxom woman in the uniform with the top couple buttons undone.. and the whip.. hmmmm.. ;-)

    I might not MIND having a "you've been a bad little subservient" session to unwind the week.. ;-)
     
  23. Testacojones

    Testacojones F1 Veteran

    Nov 3, 2003
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    He'll yeah! But we have that option or choice unlike some.
     
  24. raptorduck

    raptorduck Formula 3

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    #96 raptorduck, Mar 24, 2011
    Last edited: Mar 24, 2011
    As usual I am late to the party. This is a very interesting thread. Not long after I bought my first Ferrari 13 years ago, I was concerned about the cost of ownership. I paid cash for it, but it needed some expensive repairs/maintenance, and after about $28k of such expenses, I started driving it less and less for fear of putting wear and tare on the car. Yet, it was still expensive for me to keep in the garage gathering dust. So I worried more and more about the cost to own a car that was gathering dust. So after 3 years I sold it for the exact same price I paid for it and moved on to a "practical" BMW M5. After that experience, I promised myself I would not buy a Ferrari again, until the cost of ownership did not make me think twice about owining it or driving it, often.

    It took a while for me to get to that point. I drive my current Ferrari every chance I get. I keep it maintained in the condition that I bought it, pristine, and pay the extra price to get it cared for by the best. Yet, despite the cost of ownership being insignificant for me relative to the grand scheme of things, it has not dissapeared completely as a consideration. I don't think it ever will. Money is money no matter what. As long as I enjoy the car and drive it every week and it does not gather dust, I will keep it. But if I don't or if I need to get rid of a car to pay for somthing "practical", the Ferrari will be the first to go. It is truly a luxury toy that I don't need. That is the practical side of me talking that I have realized will always be there, and always should.

    Yet, I agree with comments above about the reasons for buying a Ferrari being emotional and disconnected from concepts of security or practicality. I even veiw my Bentley as "practical" while my Ferrari as purely passion. When I drive it, I am that 12 yr old who started collecting Ferrari diecast models and dreamed of owning a real one some day. When I drive it, responsibility and practicality are irrelevant and dirty looks from Prius owners are a warm breeze of validation that I should keep it.

    P.S. On the comment that the MBA in a JD/MBA is redundant, I could not disagree more. If I had a penny for every corp lawyer I run into who is ignorant of finance, economics, and marketing, I would own 20 more Ferrari's. MBA's are not just useful for antitrust lawyers, but would benefit any corporate lawyer.
     
  25. MikeR397

    MikeR397 Formula 3

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    #97 MikeR397, Mar 24, 2011
    Last edited: Mar 24, 2011
    I assume it was me that made that comment somewhere, but when someone asked if I had an MBA and I replied no, I only meant that it was "redundant to me" for several reasons. First, while I got the JD, I'm not going to practice law or use it, not even currently planning on taking the bar. Second, I have business majors in finance, economics, business law, and MIS, and I've taken or audited about 6 MBA classes while in undergrad and at law school, and for me, the experience was extremely redundant considering I completed 240 quarter hours under my BBA already, and I felt like I was just paying another $30k for another piece of paper that says I'm qualified! Certainly, for attorneys who wish to practice corporate law and don't have a business background, the MBA part is almost essential.

    BTW, thanks for sharing your other comments on the subject, I believe you have the state of mind correct on these things ;).
     
  26. raptorduck

    raptorduck Formula 3

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    #98 raptorduck, Mar 24, 2011
    Last edited: Mar 24, 2011
    Can't argue with that. Very good points. Though I eventually added an economics degree as well, my MBA was needed as my undergraduate and grad training was in the physical and biological sciences so I needed the grad business training that provided more advanced training even than I got from taking prerequisite econ, finance, accounting, and other undergrad bidness classes I had to take post undergrad in order to apply to B-school. I was completely business ignorant before that.
     
  27. MikeR397

    MikeR397 Formula 3

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    #99 MikeR397, Apr 8, 2011
    Last edited: Apr 8, 2011
    Well, I didn't think it'd last forever, but it looks like tonight its game over for my niche opportunity, and now I have to start over and find my next great opportunity. While I took a 5 figure haircut at the end here, I had a good run over the last 6 months, and my actual realized return was over 40%, so ~80% APY, and I've been conservative and saved almost everything I made. I don't need to start thinking about W2 employment for awhile, but I think F430 dreams in the short term are out the window. :(

    Guess its time to have a beer.
     
  28. rcuming

    rcuming Formula Junior

    Oct 18, 2009
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    This is an amusing and recurring thread. So much effort at quantification in the face of utter uncertainty. The fact is, you can't predict what the cost of ownership will be. These cars are very complicated and do not benefit from the rigorous research and development performed by larger producers such as Mercedes and Porsche that would lead to high levels of reliability. Ferraris are, after all, essentially race cars. So, they’re gonna break, unexpectedly and at breathtakingly high expense. “Ya pays yer money and ya takes yer chance.” But, in my experience, there is no driving experience to equal Scudiera Ferrari.
     

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