The financial reality of Ferrari ownership...

Ferrari ownership can be expensive! Here is a quick analysis of my 360 cost of ownership:

1) Purchased my 03' 360 Spider 2.75 years ago for $192,000.
2) Total cost after upgrades (Tubi, electronics, wheels, etc.) and sales tax was $245,000.
3) Total maintenance (including major) of $13,000.
4) Total insurance cost of $6000
5) Opportunity cost of lost investment return, approximately $31,000 (assumes 5%)
6) Recent sale price of $130,000
7) 15,000 miles added during my ownership (purchased at 3000, sold at 18,000)

Cost per mile = $11.00, plus gas
Total cost of ownership = $165,000
Cost per month of ownership = $5000

Did I have $165,000 of fun? You bet!!!

Tim

 

Nobody with any financial sense puts any more money into a depreciating asset than they have to. So, owning a modern Ferrari is never going to make financial sense. Do it because you can and you want to. Nobody needs one.

 

If you're making 1M a year, don't think you can afford a Ferrari, I think that you need a reality check. You can, a whole bunch of people here don't make that much, and still have them. Essentially you're looking at a years cost of about 30 - 50k. If you can't afford that on your income, you need a better accounting, or a little therapy (LOL). Get the car, life is short, it isn't going to ruin your life.

Art

 

Impatience and need for immediate gratification is arguably our nations downfall. Those who paid cash for their Ferrari probably will not be found on E Bay or trying to sell. It is the "leveraged" buyer.

A good life rule - "the less debt the less stress and worry about income"

A good purcahsing rule - "if you cannot afford to lose the money, don't buy it"

If you have to ask the kind of questions you are asking, the answer are clear - NO!

Best

 

No offense, if you put Kumho's on your 360, I believe you will be in the minority. I personally would more closely question the purchase of modena with Kumho's on it as I would apply the logic, what else did the owner comprimise cost on. My belief is that if you need to nickle and dime this car, it probably isnt the car for you. I was hoping that the person that started this thread would realize this car has much higher associated costs. Yes, I am sure there are a miriad of ways to reduce cost of maintaining this car. I mearly wanted to point out that if you want to maintain the car at the dealer here is what you can expect. i would assume most folks (more than 50%) that puchase a 360 probably go to the dealer and use name brand replacemnet parts, such as bridgestone and michelin.

I do not believe my cost of ownership is extreme. Thngs are very expensive to replace on this car. Whether its $135, $140 or $150 an hour, thats more that 50% higher than most mainline luxury cars.

B

 

+1

I dont buy it at all.

 

You are making the classic mistake of those who find themselves with nothing as they approach retirement. Namely, you are confusing income with wealth. They are very different. A person with a 100K/year income and net worth of 5M can much more easily afford a Ferrari than the person with the 1M income and no net worth. If you want to learn more, I highly recommend the book "The Millionaire Next Door". BTW, this is the 5th recession of my adult life and I've observed those who come out OK think like Steve. Those who don't think like you.

Dave

 

What is with all this hostility? Did I do anything to you?

 

Actually, the fronts are cheaper.
$219 each

So just over $1100 for a full set

Thats about 2/3 the price for a set on a 997 CarreraS

 

LOL,

JW, dont take it personal. He's not insulting you, just taking a position againt your comment. I's all good.

Me and Pano have been going atit for half this thread. Its all healthy banter. No worries buddy!

B

 

You know...

I have been on this board about 3-4 years now...

I have a pretty good feel for the folks on this board that legitimately make serious money. You can tell from their posts, back grounds, and comments. I don't think I have once seen a post where a very successulf person on here came out and said, "I earn $xx,xxx,xxx.xx". Folks who have money, typically don't say how much they earn. Funny, that.

I do ok, and don't consider myself rich. I am pretty sure I wouldn't post on this board how much I made last year... I have never heard one of my partners/contractors/office mates point out how much they make...

That leaves folks who do point out or brag about their income... Makes you wonder. Whats the old saying? Big hat...no cattle?

Oh. And my opinion. Seems like 1mm in income should be enough to live on...

 

I guess I am guilty of a major F-chat party foul in that I actually threw out some specific numbers. In future I will not do that since it seems to automatially mean I am lying.

to me, this place is about as anonymous as it gets...I don't discuss this stuff with people I know/ socialize with in REAL LIFE for reasons I already mentioned... obviously this is not the right place to discuss it either.

Sorry I either offended a few of you or came off as a lying troll.. that was not my intent. I am not a troll, nor was I lying. Was a legitimate question based on my real situation (the actual precise details are slightly diff then what I asked... I would actually be happy to give my EXACT situation, but that seems not appropriate to some of you so I guess I shouldn't). I hate being accused of lying but I have no way to prove otherwise, so that's life I guess.

I actually thought it was decent question, because as "hardtop" pointed out, there is a real huge difference between income and wealth. I have one but not the other (yet). And I feel like the one I am missing (wealth) is the key ingredient needed to make dropping lots of money on a car actually easy and affordable. And I think I am a couple of years away from that. Income is nothing by itself in a vacuum, it can be gone tmw...it only creates wealth over time.

At any rate, guess it wasn't really an appropriate question or at least I didn't pose ir properly or something... will be more reserved inthe future in regards to what info I share so I don't offend anybody. I don't lie, but I guess I was a little too free with my personal financial details. sorry.

 

Okay, thanks. I wonder what he will say when he REALLY wants to insult someone

 

I believe you, it's just that's there is little point in putting a target on your back by mentioning your income. I applaude being open and care free with your income. As a physician, doctors ae always secretive about that number for fear that they will lose referals. So, most keep it quiet except within the group. I think we make too much out of it. I don't begrudge a guy who works harder than me making more money...I had the same choice as him. Good for you, try to enjoy it.

I admit being in camp of believing that you should only pay cash, and it should not be painful. But, we all have a different take on responsibility, and I don't fault others for buying under different conditions. I'm just more the tortaise than the hare.

 

I agree, I just thought of this as more anonymous than the real world. I have both customers and coworkers who would absolutely be bitter and angry and horrified if they knew what I make... just didn't think that would apply here with people who don't really know me.

 

Agree again. In reality no one here gives a crap what anyone else makes. Don't let the neg's bother you. You are probably just more healthy than most.

You do need to keep it from co workers. That really causes problems.

 

amigo it's a joke.. again don't take it personal..

 

Dave,

I DO agree with what you are saying.. however the counterpoint to that is the following: The man makes 1M a year.. he spends ONE of those years (because you don't need a new ferrari every year) spending 200k or so on a car.. but the other years he makes an income that 200k is being saved or put to some other use..

It also depends on where he is in life.. if he is in his 30's or 40's and he has another 20-40 years of money making in him them 1M a year is hopefully just the beginning of a very rich man's life

So why not splurge and get a 200k ferrari.. WORST CASE scenario is sell at 30-50k loss in a year.. and viola he has only actually thrown away 30-50k.. that's it.. if you can't toss away 30-50k in a year where you make 1M.. then you really must be leveraged pretty bloody hard !
'

 

Do you track your car by any chance? I have learned that Kuhmo's are very very good tires.. and if you do some research on the qualtiy of the tires in question I think you will see that the price of those expensive tires really doesn't justify it in any way shape or form..

Kuhmo's are softer.. they are BETTER driver's tires for performance driving.. they also wear out faster.. But honestly.. it's not about price.. the M3 drives a hellva lot better (sticks to the road) with the soft Kuhmos's honest I think I can pull some G's in that car that I could never with the recommended pilot's...

the ferrari I currently have pilots on but I would definitely try out Kuhmo's the cost savings is just a bonus as the tires are a blast to drive on..

again this is coming from a performance driving perspective.. and you shouldn't begrudge anyone who chooses kuhmo's on their 360.. I don't have any problems paying for maintenance on my car and I do everything right with the car.. but when it comes to tires.. I think sometimes the better tire isn't the more expensive one.. as Kuhmo has proven time and again..

ask any hard track driver.. kuhmo rocks.

 

Dave, I agree--it is, as you suggest, a "silver lining" moment and not the same as the ususal "long term" investment perspective. As Greenspan said, a once in a century financial tsunami. But, fact is as fact is and those that worked for 20 years at Enron putting their savings into company shares, like those at Lehman or Bear or Wachovia or any of a hundred other supposedly large, diverse, and thus safe business models, might wish they'd had a spent a bit over that period on something as seemingly frivolus as a 430. Or they might just wish they'd bought a smaller house, cheaper car and took more holidays!

No matter. However, as you point out correctly, F Car ownership IS MUCH more than most truly understand until they have the bills in front of them--even small things like higher insurance costs add up quickly. And I'd venture to guess that often many of these associated costs are not really considered when making the jump to a Ferrari. As you know, these costs ARE real and daily, not imagined or like the current economic environment, simply "statistical" every century or so.

As I noted (and did you), one needs to honestly assess how the the car and the associated costs effect your family, your lifestyle and your financial requirments both over the short and long term. Being car poor or house poor are both very unattractive spots to find oneself--esp now.

But if you're in a spot where your long term financial health is well sorted, AND you like FCars, then new car ownership brings with it special enjoyment that I believe makes these "costs" acceptable. Esp, if you (like me and others as fortunate, too) can get one for MSRP .

 

True story,
Best,
Dave

 

I'm trying to explain to you how attitudes towards wealth, income and spending affect people over the long term. The ones who expound your beliefs end up underachieving in their financial lives. I've seen it happen over and over again in the last 35 years. The example of making 1M is a bit extreme, but Steve understands that his income is at risk (as are most high income jobs) and he has other obligations without much safety net. There is no point to buying an expensive toy if you are worried about your financial situation because you can't enjoy it anyway. You can choose to ignore or consider what you are being told. I just felt an obligation to offer some wisdom.

Best,
Dave

 

LOL. Yeah you're right, $1m is a lot. But in SoCal $2M homes do not typically have ferrari's in their driveway - depending on the area you might get a little more than a shack. I believe taxes are 35% Federal and about 10 or 12% state - that's almost half.

I know this should go into P&R, but again, if Barack has his way, a $1M income will drop from the current say$600K takehome to about $500K income. If you're income goes up to $2.26M, then your taxes will go up by $500K (so your take home (on $2.26M) goes from about $1.2M to $700K.) That's insane.

 

anyone making over 500k a year should have a good accountant.. you should be taking home more.. it's all about what is and what is not a deduction... stuff like that..

 

Dave,

I think you are wise and 100% correct.. but if we are discussing a situation where future income is at high risk then I do understand that any toy is a bad idea..

however if this man does indeed make 1M a year and is a youngster (especially under 35) then by god he's a blessed man and he should enjoy the ferrari.. chances are he will be ok