Question for you guys

Though I didn't buy my car as an investment, the vintage stuff has been doing quite well over the last few years.

Regards,

Art S.

 

Tough questions to answer. But I'll give you my humble opinions knowing that I am certain there are as many answers as there are different ferraris, owners and situations.

First off, buying a ferrari as an investment (in most cases) is usually not a good idea. You would be far better off investing in a mutual fund.

Second, I think that the most prudent way to purchase would be to set aside the cash for the acquisition in an interest bearing account. Then get a loan for as much as you can. In theory, the investment money will yield more than the interest you are paying on the loan. At least you will be making some money on your money.

After that, everybody has their own philosophy regarding the purchase. I guess it matters to the individual. Some people will sacrifice a bigger home, vacations or whatever just to own one. Others just pay cash and get on with it. If owning an Fcar is your thing, then you simply buy it because you enjoy it. Kind of like going to Vegas knowing you will spend X amount, probably not get it back, but will enjoy the experience.

Hope this helps.

 

I wouldn't buy one unless I could pay cash for it and able to afford the upkeep. I would quess it should not eat up more than 5% of your net worth either because you don't buy these cars for investment but for a hobby. just my 2 cents

 

I agree. A car should never be considered as an investment. Ferrari's we buy are just our toys which we appreciate and enjoy. It's money spent and forgotten. To invest 5% of your net worth in such a car seems reasonable. If you want to buy a $150k car you should have about $3M in your bank account. I would suggest that your annual net income should be around $400k-500k.

 

MLynch has something called an LMA account that allows you to borrow against your portfolio instead of raiding it. At last check my guy told me it was 10% APR... so it could be a really low interest loan if your doing 7% against the money you borrowed thats still in the port. Theres also no underwriting for it as long as you only borrow half of whats in the LMA portion of the account.

Im planning on doing this for a 550 when the time is right for me.

 

I mostly meant my investment comment as a joke considering that for most of my ownership, I was so underwater in the car that I called it my U-boat - I own it because I love it.

To me the question you asked really depends on a person's priorities. If you have enough money to buy and maintain the toy you wish to buy without it affecting your lifestyle the you can afford to buy it.

Regards,

Art S.

 

"Thanks guys! Fantastic answers. Let me clear something up though, in my original post I wasn't saying that a F car was an investment, I was really trying to say that since it's not that"

"what would need as far as a net worth or": 5% net worth

"yearly income to justify the purchase." > 10,000 depends how you save and spend.

 

Art,
Your comment is not really that far off. New Ferrari's are not in any way an investment. But if you do your homework, shop carefully, and really luck out, a Vintage Ferrari could make you some fabulous money in the long run. And I do mean the long run. It is also a hell of a lot of fun in the mean time.

 

No one would suggest a Ferrari as an investment, just a luxury, or "toy" to enjoy.

It doesn't matter how much you 're worth or make, only how badly you want it.
A house would be a better investment, however...

I know a guy that owns a $7 million dollar homes and buys a used Testa. And I know guys that own a $700,000 dollar home and own a 360, 550, Testa, Maserati.

One has more wealth than other, but one is more of a "tifoso".

 

Tough to come up with an average, there's a wide range of how people on this board hopped into a Ferrari. Personally, I'm a car nut and this was always my dream. So I saved and waited until everything else was in good order - house, retirement funds, other cars, etc. then jumped in. I know it's not an investment, but I didn't want to lose a ton of money on my toy either. So I purchased at a level where I think much of the depreciation is already gone, hoping that I can recoup a good % of my purchase price if I want to upgrade down the road.

 

It's only an investment if you are on the new car buy list and you intend to flip it...then it's a great investment.

 

when should a person feel relaxed about making such a large purchase? Meaning what level of income do you feel is needed before feeling comfortable about buying such an expensive car?

In all honesty, you will know it when you get there. There is no formula , no lines in the sand, just passion and knowing what you want to do with your assets.

 

Unless you are a wizard of finance and know some ultra creative way, buy cash and get on with it!
That way you will also know when you are ready to buy it!

 

ditto

when you can spend the cash without noticing its gone.

 

No one buys a car because they expect to make money on it; speculators buy classics and hold them.
Rather people buy cars like these because they enjoy them and the price is not the issue. We all know the current market for the cars, new and used. But we purchase them like a fine painting or great wine; because we want them.

 

I agree, when you're ready to buy one you'll know it.

 

It's a lot more fun riding around in your "investment" than it is looking at the statement from your broker - and it has about as much chance of going up in value in the long run

 

When did you last see a Brinks truck following a hearse to the cemetery? You can't take it with you.

 

You CAN take it with you - it's just hard to spend once you get there...