% of Net Worth one's first F-Car should be...

There certainly is no fixed formula.It really is all about priorities.Which is an elegant way of saying "it depends on how sick you are".All my life since age 16 (now 70) I have spent a disproportionate % of my net worth/income on exotic cars and never have regrettedit.
Life is short-if you have the passion- GO FOR IT!

 

Ideally, i would love to have enough money where i could buy a Ferrari in cash and, if it fell off a cliff the next day, i wouldn't even have to worry; but that's just me... If you're talking about a brand new car, like, let's say a 612, just keep in mind that you're gonna take a hit... If you're talking about a 355 or something similar, then you won't take much of a hit, you'll have a whole lot of fun and, as long as it's insured, who cares...? If you can take out $80-100k and not worry about needing it down the line, then i say go for it... If not, then just get a Boxster S - they're very underrated...

 

By the way:

Good luck, keep us posted, post pictures if you buy one and don't come back here without a serial number...

 

Check it out

http://www.ferrarichat.com/forum/showthread.php?t=23441&highlight=net+worth

http://www.ferrarichat.com/forum/showthread.php?t=35655&highlight=net+worth

http://www.ferrarichat.com/forum/showthread.php?t=35981&highlight=net+worth

Should keep you busy a while...

 

Well it could be alot depending on which model combined my last 2-360's cost me nothing, I made money. My Modena that I drove for 15000 miles costed me $13000 to drive over 2 years and my Spider I made $25000 after driving it 5000 miles and keeping it 1 year. Like Carbon said is it new, 12 cyl. or 8 cyl. Either way its a nice problem you now have. Goodluck.

 

Short answer: 5% max, much less if there are other outstanding obligations. Advice from a guy that gave up on the Ferrari and bought a 5 speed Civic instead, take the advice for what it's worth; not much......

(Yes Ryan, the Civic is for Rachel...)

 

5% is about the maximum you should put into a Ferrari, unless your net worth is so large that what remains is more than sufficient to supply your needs. I figure that number to be at least 10m in other assets, then I guess it doesn't make any difference. Wish I was there.

Art

 

I have a friend that make $30k/month $1.5mil debt and drives a 6.0...Bought it used and will take a minimal hit and he always has a Lambo or Ferrari.

Rates are so low buy it with someone elses money and keep your cash working for you. Just because people are driving a $200k car does'nt mean they have wealth. Some people have $150k homes and $300k cars...Others have $2 mil homes and drive Camrys, I know a good mix of each but tend to spend more money on real estate than cars.

Basically get a low interest loan and and see how you feel with a Ferrari in yoru garage. Some people buy the car and realize that it is'nt a big deal, others cherish every moment in their vehicle from day one till its sold....Just buy the car and see what type you are.

 

The day I bought my 1977 308 GTB 2 years ago it was every penny I had in the world. By the time it was shipped to me three weeks later I had earned enough to pay for 1 tank of gas and the insurance. Today it still occupies the lion's share of my worth but to look at it for even a second and I know that the decision was right on. I guess this is how the mind works when you are in your mid 20's.

 

The % of net worth issue takes on an entirely different perspective if you buy a vintage Ferrari that is likely to increase in value. Consider if you had paid $125K for a Lusso 4 years ago or $85K for a GTC even 1 year ago!

Buy smart. Either fully depreciated of appreciating and its hard to go wrong!

Or you could just pony up $225K++ for a brand spanking new 612, keep it for 5 years and put the customary 8K miles on it and then sell it for something like $100K. Ouch!

Pay attention to what NNO said about the Boxster S. I recently purchased a '00 Boxster S with 27k miles on it for use as a daily driver. You can get such cars for about $30K, way less than 1/2 the new purchase price. They are simply amazing cars. Fast, handling is world class, great to look at (even if you do see 5 others every time you drive it) EXTREMELY fun to drive.


Terry


Terry

 

Ever since I got my ferrari I have smiled unknowingly twice a day for 7 months now. The therapy has done me good. I smile in the morning, when I see it in my garage before leaving to work, and I always smile when I open my garage coming home from work. You can just imagine how I feel driving it.
My grandmother told me that life goes by like a nights sleep. Buy the car...

 

Totally disagree with the 5% number quoted.

So if you have a million dollar net worth, you can splurge on a $50k car???

No Way.

Say you buy a 1999 355 spider right now for $90k. You drive it for 5 years an then sell it. Maybe it will cost you $3k a year in maintenance and $35K in depreciation for a total 5 year cost of $38k or $7,600 a year.

I'm guessing you don't have to have a $1,800,000 net worth to shell out that $7,600 a year.

Life is short. Get out there and enjoy it.

 

Right on Jerry.

 

I don't know, I think I still agree with Art. It seems that most of us in the good ol'e USA (and especially here in Cali) are waay overextended when it comes to automobiles, and automobile debt.

I can have almost as much fun (maybe more, since If I total my car, I'm only out $20g) with my GT4 as the guy with the 355, but I've got a lot more money left over in the bank for maintenance, repairs, etc.

It's nice to have piece of mind. I'll stick to to the 5% or less.

Dom

 

I sacrifice much of my income keeping my fcar and other cars running in tip top shape.

Remember, buying the car is only part of the expense. The other is maintaining it well. And these cars can get expensive very quickly.

 

I also completely disagree with the 5% people.

Also, keep in mind that it depends a lot on how expensive your other habits are: clothes, dining, vacations, other hobbies. Clearly, the less you spend on other habits, the more you have to spend on cars. It's a question of your specific priorities. If my choice were, say, to buy my Ferrari and not go to France or buy any new shoes this year, I would make that trade.

There's no set limit, it all depends on what you're comfortable with and how expensive the rest of your lifestyle is.

Zach

 

Its also a question of what else you spend disposable income on. For example, children are a totally unnecessary luxury that cost a fortune. Don't have kids, and already you've got oodles more available for an exotic car. Some folks pay for expensive country club memberships to play golf. I find golf boring and could care less about making friends at a club. Hence, i just saved another bundle. Likewise, unless you really need to wear Brioni and Kiton suits, buy Levis and don't bother with the Lobb handmade shoes. Another large chunk o' change has been saved. Fancy drug and liquor habits can also be shorn, don't waste money on dating chicks you could probably care less about anyway, etc. At the end of your life, you will be alone, dressed like a hobo, but damn, you can look back and say, "I drove some serious iron." That's living....

 

lol - That rules - It's all about driving the serious iron!!

I'm with you on a lot of this - No kids, no drugs, etc.

Also, like zjpj said - I don't travel much - I have everything I need at home!

And Dom, if I total my car, I'm not out the cost - What about insurance? If you are tracking the car or doing something with it that isn't covered by insurance, that is a different discussion all together.

 

I agree with Art. Most people are over extended and I am on the sidelines with cash in hand waiting for rates to go up. There's going to be some cool hardware available when it happens...

 

Before I read any of this thread I was thinking 5%, up to a max of 10%. It appears I'm in good company. It all depends on your comfort zone. Robs comfort zone is higher than anybody I know!

 

I do track my car (though not as often as I'd like), and if something happens on the track, I am essentially SOL. I am OK with that with the GT4. If I had a 355, or 456, I probably would not be so comfortable taking that risk.

I've always taken the attitute that a car, any car, is a depreciating asset. And though some cars depreciate less than others, it is the very rare car that does not depreciate. Therefore, only spend on a car what you can afford to lose.

Dom

 

Taking that one step further. Don't get a wife. That will save you a bundle. It's provided me with the opportunity to own two Ferrari's. It will be a cold day in hell before I sell one of my cars to buy a ring!

Rick