The value of your old Ferrari surpassed your means...

Those of us that bought in the mid '90s are experiencing the same thing...

Regards,

Art S.

 

I too have often wondered about this. Not sure what kind of responses you'll get, but I'm very interested...

 

"Those of us that bought in the mid '90s are experiencing the same thing..."


Heck, those who bought three years ago have in many cases experienced huge gains.

 

I think about this but more in connection with my Chinese contemporary art collection. USD125 in 1988 could be USD5mn now. Even paintings from 5 years ago might be up more than 20x. The art collection in my office is many times the value of the property (cost one-tenth the price I paid for the property) and Hong Kong Central office space has not performed too badly as of late. I think about that a lot. Makes my cars seem like a cheap hobby which I guess is good news.

 

Bought my 330 GT in 1980 - just another old car. Unless the price and thus insurance cost gets totally out of hand (unlikely for a 2 +2) I will keep it. This might not be true had I got the GTC I first tried to buy - but that is another story.

Cheers
Warren

 

In a warped way, I am fortunate that I have no regrets about the market- even at the time I knew they were crazy cheap cars but I did not have the dissposable funds, so it makes it all irrelevant. I never in amillion years thought there would be an upside to being poor. Napolis, if you a reading this, please p.m. me or follow up here, but I would love to hear your imput from the other end of the spectrum.

Best,

Pres

 

Check the Sothebys catalogues for the artists that made it. As to who will be in Sothebys in 10 years time, you will have to figure that out

 

I've never thought of any of the things I've collected as having any value. I've only bought things I Loved and could afford. Once I've bought something as part of my collection I assume that that bit of capital is gone forever or at least 50% of it as that's what the Government will be taking some day. The pleasure in owning it during my life time is worth it to me. If circumstances changed for me and I had to sell my collection I'd sell it. I enjoy my collection but I Love my Wife and Family and providing a good life for them is all that really matters.

There are always wonderful things to enjoy that can be purchased reasonably. Having a good eye is the Key. My Wife once bought an original Joseph Albers at a Tag sale for 10 cents. She liked it and it's not something we ever plan to sell. I admit that is rare but there are many artists who's work will one day be worth a fortune that sell today for very little.

 

I recently sold an Aston Martin DB5 and a Daytona after long term ownership, especially on the DB5. While I did not stumble into either car, I managed to buy each at the low point of it's market cycle. To get back to what I percieve is the basis of this thread, when the market ballooned over the last five years I became more and more anxious about having those two in particular on the road. There comes a point where the guilt overcomes the joy. I had not reached that yet, but it was approaching fast.
I hope that whoever ends up with one of those beauties will appreciate the care and commonsense approach I had while I enjoyed them. My greatest regret would be that the next owner will be too timid to put them on the road at all, or worse, that they will bounce around from show room to show room.
I've been a quiet player in the vintage market for almost twenty years now, solely as and end-user. I was startled when the latest surge came on in the market. I well remember the bubble of 1989 and how frustrated I was that now that I had cash in hand my opportunity to get that really neat car I remembered as a child was evading me. One good thing about my travels from Coast to Coast back in 1989 was that I learned about "Italias". E-Types and Astons were way overpriced at that time, let alone Ferraris. It would have been a disapointment to have stretched my finances to get one of those and then watch the bubble pop.
I bought a '71 Italia back then, and while the market does not recognize it as particularly valuable, I think it's the best all-rounder I've ever owned and don't ever plan to sell it.
The Daytona was to be my last hurrah in the vintage world. Greastest GT of its day and all. Saw them racing in 73 at the Glen when I was eleven years old. It was worth all the aggravation of searching for scarce spares and all the other stuff you must accept with a vintage car. I'm currently very happy with the ten year old F550 I just bought. It's never going to appreciate like a classic V-12, but that's not such a bad thing. I've owned seven classic cars from Alfas to Rolls Royces. Each was a unique experience.
I guess what I'm trying to relate is that none of us are ever going to get younger. I took my shot and look back on the experience with an inner light. I don't know if I'll ever get another vintage car, but if I did, it would be an E-Type roadster. For right now I'm happy with what I've got.

 

Wonderfully said. As enhancements to enjoying our lives and our family, these are acquired to "add value" and there intrinsic value is frequently a secondary issue.

Robert

 

I keep waiting for America to discover Ernest Dudley Chase's pictorial maps. I have several signed prints and two original water colors. I bought the originals for less than what the prints sell for!

Back to the topic, my Lotus sold for $7500 in 1972 new, were selling in the $5k range in 1980, now fetch $15k in near excellent condition. Not a great investment as a 246 was about 2 Europas in 1972...

Ken

 

This is a very timely question for me and one where the answer depends on our own definition of "exceeding our means".

I see two distinct groups of people here. Those who are quite well off to the point that the escalating values still represent an minor fraction of their net worth, and those who can (or could) afford to own such vehicles but the value of the vehicle now represents a significant portion of their net worth. For the second group, the one I consider myself a part of, this is a very real concern... for some.

In that second group, I find their is a rather wide gap in what some see as their "means". I happen to be on the conservative side and would never finance a toy. If I can't buy it outright, I consider it beyond my means at the moment. I know quite a few folks that measure their means by their ability to make a payment. Those that are fine with payments, often worry less about the "what If's" than someone like myself. Thats difficult to understand since in my view, they are already stretched beyond what I'm comfortable with.

I too put my family first and with limited resources and a rather conservative disposition, justifying that high dollar toy versus converting it cash is a concern. For me, owning my car is a once in a lifetime experience that at the moment, is probably stretching what I think are my means, but still an expereince I couldn't pass up. Even so, I don't (and won't) feel completely at ease taking the car out as if it were a Jetta- nor can I treat the car like a 50K Porsche and think of it as "just a car"... I can't deny that it's more than that to me. It's an asset that I enjoy (more so than numbers in a bank account) that I hope will provide some value to my family should a "need" arise. Hopefully, the need will never arise and I can pass it down or convert it something else but- it something I have think about.

 

I have never bought a car that I didn't like.

When I bought my pf coupe in 1995 it was not running and had been in storage for a long time. I wanted it as a car but with an eye toward possible sale in the future for a profit. I enjoyed getting it up and running and doing some cosmetics as well.

I own a lot more real estate than cars but I like them both and feel that I understand them both at least from a physical standpoint. Real estate is not doing so well at the present but the old pf has risen nicely the past decade.

I am in the process of selling the pf to reduce debt created by softening real estate. I would like to have kept it and may have been able to squeak by doing so but the opportunity to sell appeared here and so it goes.

Its going to a nice fellow who will use it more than I could.

Like my buildings, I tend to buy cars with issues and bring them back and sell them and then do it again.

No regrets. I have enjoyed the journey.

Tom W

 

Selling a very valuable car (or piece of art or anything similar) that has enjoyed tremendous appreciation is not required, given several circumstances:

- You keep it properly insured, so the capital is not at risk from an accident or theft.
- You don't need the capital now to support your family's chosen lifestyle.
- The collector's market does not totally collapse.

I don't have a rare Ferrari, but the value of mine is not trivial versus my net worth. The same items above apply to me. So long as I insure and maintain the car properly and the market does not collapse, I can always sell it if I need the capital to support our lifestyle.

In the meantime, I get a type of enjoyment that would be very hard to find elsewhere.

Regards,

Jim Walker
365 GT 2+2 #12451

 

Jim so nice to see that honest viewpoint, especially coming from you (or indeed anyone with substantial means) because thats just the bottom line for any mortal, given that future health & economic matters are always undetermined...

 

Interesting question indeed.

I own a 1969 Dino 246GT that I bought in the mid-nineties. While it was reasonably priced back in 1996, the restoration was a major expensive. However, the Dino was the car I implanted on as a duckling and I knew it was a keeper and so I was happy with the outcome. While the car's value is not beyond my means today and I'm pleasantly surprised to actually be above water with it given what a platinum "L" series Dino will now fetch. However, I can't help but think about its higher value and that admittedly impacts where and when I drive it.

However, more to the point of the question, I do think there is a point where the value of an old Ferrari could easily surpass a logical asset allocation for someone's means. Case in point, the 275 GTB that "got away". I was at the Christie's Pebble Beach auction in 2000 and bid on a 275 GTB. It was going to be the "stable mate" for the Dino and represented the perfect 1-2 vintage Ferrari punch in my opinion. I was the high bidder at $150K but was actually relieved when someone outbid me by $5K and got the car for $155K. I decided the price was too high for some of the car's unknown issues and I wanted a short nosed 275 GTB anyway. In truth, had I bought the car and still owned it, I'm not sure I could justify keeping it given its current value. I just think I would question the wisdom of having too much money tied up in cars, particularly if one of them had increased 4x in just 8 years. While I know I would always want a 275GTB in my collection and would kick myself for selling the car, I think the notion of profit taking and diversification would be gnawing at me and would spur me to act on those principles. Perhaps the financial wizards on FerrariChat can shed some light on that logic.

Of course, then there's the question of where you would park those profits and could that investment equal that value and enjoyment that comes with owning a 60's V12 Ferrari? As they say, shoulda, coulda, woulda. I'm happy with the Dino - I feel so fortunate to own my dream Ferrari and while the 275 GTB remains a stretch goal, it's a more distant one these days.

Cheers...Keith

 

Owning Ferrari collectibles is very good at the present. The only thing I would think would be better is owning an oil well. Real estate is generally soft and I personally do not trust big business enough to invest in stock.

Tom W

 

It's an interesting question. One factor is that the cost of operation of a very expensive car isn't any more than a cheap car. I doubt a 250GTO will cost you more to drive (excluding insurance) than a GTE, and probably less than a 10 year old 550.

So if you view it as part of your "portfolio" and worry that your allocation to the vintage car asset class is too high, then by all means you should sell. I'm more like Napolis-- I bought my cars because I love them, and so at most all I consider is the cost basis.

Now, it is worth considering if you have a highly appreciated car and you could sell it and buy a couple of other cars you've always wanted. But for me, I've always been a buy and hold guy.

 

Dad bought the 500 Mondial in 1960 for $2300. After he parked in 1967, I don't think he spent a dime on it, except for perhaps property tax and insurance.

He didn't sell when Japanese businessmen were calling and offering $1.2M + in the late 80s.

We have spent a bundle over the past two years for the preservation/restoration effort, but dad jokes that it's simply the cost of "40 years of deferred maintenance".

I would imagine that its life henceforth will be pretty gentle - the car is extremely intact from its glory days and we see no point in risking that originality for a weekend trophy - plus we do not have the means to be blowing up the original motor and get a replacement from the Factory . . . . .

 

Wow, that's about $2.2M in today's money.

 

I have bought all of my old cars because I like and want them. Of course, I want to make a good buy, but in the sense of protecting my money, rather than as an investment. I have been very fortunate with some of my sells over the years, but really...my Ferrari is well beyond my means. I have just parlayed a few fortunate sales over the years to own one. I bought a 1955 Porsche Speedster in 1975 for $2700 that supposedly needed a motor. It turned out that all it needed was a starter motor. I flipped the car for $6500 and though I made a killing at the time. My intention was not to flip the car, but to rebuild the motor and enjoy the car. Bad move on my part in hindsight.
On the positive side, I bought a 1966 Shelby for 15k in 1991. I did nothing to the car but enjoy it. I sold it a few months ago for 105K...Now I own a Ferrari that is well beyond my means. So what, I plan on enjoying it...