Will our 550's/575's Ever be Collectors?

Hey, guys.

I've been giving a lot of thought to this lately. I look at the older, all-mechanical (no electronics) Ferraris and wonder if the newer ones with all the computers will even be operational in 50 years. What I'm getting at is.... would you agree that it's going to be easier for the aftermarket to keep the mechanical cars (Lusso) running with aftermarket parts? It seems to me that as our 550's get older, and the electronic parts fail, there's a less likely chance that there will be anyone to create aftermarket electronic components for our cars.

I'd like to here your thoughts. The thought of one day not being able to drive my 550 because of lack of part availability pains me.

 

I share your concern, but have witnessed that in other marques, while the manufacturer drops the service parts because there isn't enough demand, eventually the aftermarket picks it up. They will find astute electronic sources that will be able to make or rebuild the components, and supplied rebuilt components. It won't come cheap, as the low volume will necessitate almost hand crafted service. The difficulty comes form the fact that as electronic techniques evolve, like software and processing, will anyone remember the way they did it 20-30-50 years ago.

 

How about:
- Yes. Classic front engined v12 Ferrari. Styling that is aging well (IMO). Reliable. Not too expensive to maintain. Last car for which the classic gated shifter makes sense. Newer v12s from the factory getting more and more expensive.
- No. Made too many of them to be collectible. Newer cars, better and faster. Not economical to support electronics so ownership economics more like a TR than a Boxer.

I think they'll mostly maintain their value (but this may be wishful thinking). I am also betting the H-L value bands will widen as some cars become well used (up) and others are well maintained.

For me, I enjoy the car. I don't drive it as much as I would like (950 miles this year) as it loses out to the bike or bicycle but I like thinking it hasn't lost tens of thousands of dollars in value while it's been in my garage.

Philp

 

Rest easy 3D printing and Augmented Reality have got us covered.

 

Good to know. I know nothing is guaranteed, but to hear fellow f-chatters express no concern makes me feel pretty good. Thanks!

I know what you mean about the newer v12s. I have a 612 and it's value is dropping like a rock. This could also be due to it being a 2+2. These never seem to hold up well.

I really like this response I'm looking at another 550, meaning that if I pull the trigger, I'll have two. I just worry about the day something goes bad and it's no longer available. Maybe I should just relax and live in the moment.... cross these imaginary bridges when/if I get to them!

 

Lets be honest...forget the electronics. I've heard we realistically have 50-70 years of fossil fuel based gasoline (as we know it) left. It's going to be hard for any car built after 2000 to reach any kind of collector car status with that looming on the horizon.

I'm planning to use and enjoy my gasoline fueled vehicles for another 25 years and then sell them off to people who don't know the end is comming before it's clear that anything gasoline powered will be nothing more than yard art

 

I don't know where you heard the information about our fuel source, but I can guarantee it is not correct. We have thousands of years of fossil fuel supply, but it is the distribution of the supply that might be in question. Either way,unless you have a 550 Barchetta I don't think the 550's will be a collectible.

 

I realize this is slightly unrelated but I think it's relevant since I've often had the same thoughts about my 98 550. I recently became interested in buying a painting by an artist I've liked for years but much as I try I can't make a viable case that it will appreciate in value. I wanted to make the case to justify the purchase of something expensive I want but clearly don't NEED. Throughout the thought process I began to see how many things we humans buy merely for the intrinsic joy they bring vs any "real" monetary value they will ever convey. If I buy the painting it will have to be in the same manner I bought my Ferrari--1) simply to enjoy the ride (to me every drive is like "disneyworld for grownups), 2) to relish in the sense of accomplishment that it brings and finally 3) to serve as a constant reminder that if I can accomplish this I can accomplish anything I put my mind to. Those three things have an intrinsic value for me that are worth more than money. If there comes a day that my 550 is relegated to yard art, I'll be very sad but she'll still be able to accomplish number 3.

 

The other dimension to the value question is "when". I don't have a pricing guide to hand, and past may not be predictive, but my belief would be that something like a Daytona became inflated in price in the 80s bubble before falling back to more modest territory until about ten years ago and has seen significant appreciation in the last say 5 years (the current bubble). So, 35-40 years after the last one was produced.

Last 550/575 was 2005, making 2040...

And, in the interim, my guess is Daytonas were a lot less valuable than the new car of the day (Boxers etc).

So, who wants to estimate the maintenance (re-building) cost in he interim 20+ years and the volume of "doggy" under maintained cars that surface to depress owners?

Philip

 

while there were a lot made, the number of people who can afford them will stedaily increase over time as it always has. great styling, gated shifter, etc. i think they will appreciate in the future. they represent tremendous value now and i believe that ferraris will always be a magical marque. original cars will command a premium as there are fewer and fewer nice 550's around.

 

As an O&G Engineer, I can tell you the number of untapped fields discovered in the last 10 years can keep us in petrol for a couple hundred years.

I can imagine though, that gasoline powered vehicles will be quite rare in 30 or so years. But this should not be a big deal for collector cars....as long as you're willing to do $50/gallon.

The bigger overall issue today is how many cars Ferrari produces.......it used to be every Ferrari would be a collector car, but that ended in the early 70s. Now it has to be either produced in very low numbers (F40, Enzo, Challenge Stradale) or in low numbers plus be iconic in some way (Boxers).

550 and 575 do not fall into either category.

 

You have to look at the past to predict the future Ferrari values. What history is telling us is limited production is the key to higher value.
The limited production Modern cars will be the collectible Ferraris of the future. The 575 sa and 550 barchetta were made in limited runs.
I think these limited production cars will pull up the value of the other higher production cars. For example a Ferrari Daytona is pulling up the value of the 365 GTC/4.
Time will tell. My money is on the limited production cars.

 

There were, I think, 5600 of these cars produced. If people hold them on average for 5 years and they take, on average, 1 month to sell, they'll be on average 40 for sale at any point in time. This ought to be enough to meet demand.

All that said, they are really great cars. There were many, many more 911s produced and people were and are bolstering prices for many of these, particularly where they reflect more iconic models I talked to Bruce Canepa the other day. He was selling an RS replica and was (is) asking $250k for it! So, perhaps the situation is a bit more positive for our cars than the "realists" (or is it pessimists, I get confused!) suggest...
Philip

 

You know.... I think you make the best point. The sense of accomplishment to own such cars, and the joy they bring to the owners has to be considered the real value. And perhaps despite the monetary value of our 550s/575s down the road, they'll still turn heads and be conversation pieces for those you run into.... more so than even today, as petrol powered vehicles dwindle in production.

 

Interesting question.....a few thoughts in response:

1. electronics can be figured by computer engineers and there will be tons of those around and likely would have economic incentive to develop solutions.
2. fact: today's collectibles aren't collectible because they are simple to fix or restore.
3. the 550/575 will ultimately be collectible (don't ask when!) but will go through the same cycle as most other collectibles....unless V-12 Ferrari's somehow become undesirable.
4. no one knows what is going to happen in the future. (duh).
5. we are all using past and present data to make our forecasts but unforesen circumstances will likely arise in the future to modify what seems today like a declining pricing trajectory. For example in our minds, the 550 is a high volume model. But if in the future millions of wealthy individuals begin chasing them, 3600 units (before destroyed cars) will seem like a small number. The world is breeding successful entrepreneurs at a rapid rate.
6. we should mostly use history as a guide to what might happen. It is very interesting to buy old copies of Hemmings, there you will see that many of today's collectible cars languished for long stretches.

In the meantime, as many have said before let's just savor the experience today. My $.02

Cheers,
Terry

 

True most collectibles are plain jane basic cars mechanically as many stated.
When we see the first electric window much less computer controlled OBD1 / 2 bringing money count 30 years then we can talk again and make market adjustments.

I remember Fuel Injection on a gas car? It will never catch on LOL

 

As time passes, one "macro-dynamic" becoming more prevalent is the paradigm shift from desiring latest-and-greatest (cutting edge technology, materials, insane on-paper performance, etc) to desiring more esoteric experiences. For some, this manifests a reversion from digital to analogue.

My perception of contemporary exotics is that they leverage technology to push the limits. As we all know, technological advance is technology's own enemy, and in that regard every model replacement from here on out renders the previous cars obsolete, not really different-but-still-special in their own regard like Ferrari of olden days.

So in my opinion, new cars' demand are ephemeral and they'll all start to be more and more similar. They'll still be sought after by many, but I think they'll identify with a time-period or "generation" moreso than with a lineage or sense of importance. And likely their shine will wear off more quickly. Notable pillars of future obsolescence might be nav screens, gimmicky gadgets (pretty sure the 16M ipod is already relegating that car to a certain time period), LED headlight trim, etc.

This leads me back to my point-- there will be a segment who tires of faster double clutches, more horsepower regulated by computers, relatively useless "new" features, and a growing selection of soulless supercars. In my opinion, technology sterilizes the experience to some degree at this point. While this monologue is certainly hyperbolic (there isn't anybody who wouldn't have fun driving an F12 or 458 for a while)-- but in terms of long-term satisfaction, I don't think these cars deliver when "the experience" is the goal.

So in that context, we may encounter the flight of a certain demographic to the analog cars that they can't find on Maranello's assembly lines anymore. Not everybody of course, but likely enough who've been there, done that to increase the demand for attainable "classics." Either as supplements the new cars rotating in owners' garages or as single long-termers.

This is isn't specifically geared towards 550's, although they perfectly define the archetype of a target purchase for this group. These cars are pretty much a fabulous V12 front engine, a classic gated manual transmission, a timeless design (this is subjective though), and tons of leather-- the things that don't age or become obsolete; they don't have sophisticated TC, 5" screens that toggle through tire temp/nav/random diagnostics/fluff-- the complex things that become obsolete and burdensome to fix.

At current prices, let alone having to spend $200K-$2MM+ for a vintage V12 Ferrari, these cars present a ridiculous value for the "old school" experience. Although there are shortcomings in comparing a 550 to a 275 or Daytona, I'd deem that comparison more appropriate than 550 to F12 any day. In that regard, I think cars like the 550 will encounter much higher demand than we have seen recently or considered imminent in the future.

I see other "modern classics" ranging from pre-991 GT3 variants and single clutch special F1 Ferrari (Stradale, Scuderia) to titans like Ford GTs and Carrera GTs (although sheer production numbers do help those cars). I definitely see appreciation among 550's, although nothing like quality real estate or long-term market prospects, but enough to warrant keeping a nice one if you've got it-- especially when you can't even trade for a new base 991 right now. Ask me which I'd prefer. Really puts into perspective the value of these cars.

Side note: I'm young. I should prefer an F12 or 458, but I don't. They interest me very little, which is a common sentiment amongst my consiglieri as well. We should be the generation of technology... but it falls on deaf ears.

-Joe

 

Joe,

Excellent dissertation on future valuation of "modern classics". As a 550 owner and new owner of a 40 year old Maserati Bora, I cannot agree more. There is something special in the soul of these type of analog cars, something raw and visceral in the driving experience that cannot be duplicated by the modern supercar of today. At 40 years old myself, I am surrounded by technology everyday, perhaps that is why I enjoy days off with a mechanical sports car, man and machine. I believe your are correct, that our generation will follow and increase the market forces on cars like the 550 as they become more upwardly mobile.

 

I came across some interesting and perhaps useful data from a road test reported in Motor, a UK publication.

When new in 1967, a 285 gtb4 was 6516 pounds sterling. The particular car they were testing had needed its engine rebuilt and at the time of testing (1973) had an asking price of 6995 pounds. UK inflation over this period had been quite dramatic, with prices rising about 50% between 1967 and 1973. So, in inflation adjusted terms the price of the now used car had fallen by about 30% over the six year period.

A new Daytona in 1973 was 13,995 pounds, or approximately twice the price of the 6 year old car and 50% more than its forebear in inflation adjusted terms. (The newer car presumably being priced up by Ferrari due to its increased performance and more "modern" design etc.)

Seems like these metrics apply to today's F cars.

 

This is interesting.

We've seen ~525% inflation since 1973.
In 1973 1 GBP was ~$2.45.
That 14K GBP Daytona was ~$34k in 1973.
Inflation adjusted, that $34k is $180k 40 years later in 2013.

With current Daytona prices at ~$500k, inflation accounts for about 36% of ask. That leaves about $320k in "excess demand." If we consider the $20k original price in The States, that would bring us to $102k in 2013 and $400k in excess demand/20% of total ask.

Sticker w/ options on 550 Maranello 122758 was $234k in 2001.

Granted, they made 1/3 the number of Daytonas as 550s. Assuming no population growth and the size of the able-to-purchase cohort remains proportional (even though both are growing), and if demand stays the same, AND the 550 curve mirrors the Daytona curve (which it won't), AND a linear rate of inflation (which also won't happen), then we would expect the following:

in T+40 years (2041, 28 years from now), inflation adjusted ask for a $234k 550 would be $1.23MM (525%). If pricing is commensurate to the Daytona that would represent at most 36% of at least a $3.4MM ask. If we cut that "excess demand" spread by 2/3 to account for higher 550 production, that would be just under $2MM. Since we can't compare the demand for a 550 to that of a Daytona since Ferrari had lost some romance and collector status by the the 550 generation, let's cut that in half. $1MM for a 550 in 2041.

It might sound insane, but my bet is that it's likely. Where can we find a 40+ year old V12 Ferrari for relatively non-stratospheric money today? I'm not talking about California spiders or other hyper-low production or special variants, just normal production cars. Even if we take more off the top due to the noise of increased Ferrari production from the 8 cylinder cars, these cars are likely to become much more valuable than they are now.

Problem is this takes a long, long time-- and if you have a 550, just enjoy the damn thing and watch it become classic in your own eyes. It's really not worth worrying about. All this very high-level anaylsis proves that we can be pretty sure you won't lose money if you buy one now. We should also consider a bottle of water in 2041 will be $12 and Daytona's will be $3MM.

-Joe

 

Agreed. I'm under 30- a child of "21st Century" technology. You'd think technology would be like oxygen to me, having grown up surrounded by it. Not the case though. Any day I don't have to look at a computer is a good day! And any day I drive the 550 is even better!

-Joe

 

550s and 575s are already collector cars; they just don't demand the high prices of Enzo era cars.

Production numbers do hold down value, but how many truly good examples exist, even today? With current low prices, buyers who can't afford to maintain them well will abuse cars, and those will decrease in value. Meanwhile an ever-shrinking universe of truly good cars have the potential of increasing in value over time.

 

I purchased a fully depreciated 2002 575 in September for less than I would have paid for a new Porsche Cayman, and though there is no way to directly compare these two cars, I believe I made the right choice. I didn't purchase it with the thought of making money in 20 years or more, but with the thought of driving it and enjoying it while I am still able. If I still have the car in 20 years or more and it appreciates, great, if not, I have paid a pittance for a V12 Ferrari and had the time of my life with it. Every time I just look at the car or sit in it and see the black prancing horse in the centre of the yellow background I feel that my purchase was the right one. It gives me a sense of pride that the Porsche never would have. Oh, and I don't think the fact that I have the F1 paddle shift diminishes its value or the feeling I get from it one iota, nor to I think that it will ultimately hurt it as an investment.

 

I agree. When I look at the new Ferraris I'm just not interested. I know they are fast and handle and stop better than most race cars of the recent past but that's not what I'm looking for. I can honestly say if my 1975 365 GT4 was new I would pick it over any new Ferrari.

 

All this writing about the addition of new technology making the latest Ferraris less personal reminds me of old football fans who claim that the game is not what it used to be, or older people claiming that new music is bunk compared to what it was when they were younger. Its all a matter of perspective.