Ferrari Prices:
Real or Imagined Gains?
CLASSIC COLLECTOR
By Erik Nielsen

If you've paid any attention to the Ferrari market lately, you'll have noticed that prices for the most part are on the rise, dramatically in some cases. Blue chip "investments" have been sneaking up for years and some of the later vintage cars, like the 330 GTC, 275 GTB and Daytonas are starting to follow suit. All of them have seen asking prices jump almost 30% in the last six months. Are the unloved generation cars far behind?

The first thing that most people need to be reminded of when dealing with old Ferraris is that this is not a "smart" place to put your money. There are plenty of other investments that will fetch much better returns and not require maintenance, insurance and putting up with a spouse that constantly reminds you that you don't have space to get yet one more. The second reminder is that Ferraris need to be valued based largely on three factors: 1) condition, 2) condition, and 3) condition. Buying a project car without doing the math first could create even more tension with the aforementioned spouse.

Property prices across the country have been rising dramatically. I won't get into whether or not this is a good thing, but the trend seems to be such that there are so many people flush with cash due to interest-only mortgages or from cashing out by selling real estate. What is important is that there are buyers in the market. Or are there?

Going back to Econ 101 (fortunately, a class in which most potential and current Ferrari owners did pay attention and, thus, have since built up the appropriate slush fund from not being fiscally stupid), buyers need to realize that supply in this case can be limited, driving up prices. Ferrari isn't cranking out any more 308s, Mondials, Testarossas or 400is than are already out there and, these things being cars, the supply is constantly decreasing. Wrecks are written off by insurance companies not willing to pay the cost associated with bringing them back to life and a number of project cars continue to deteriorate in a back shed or under a tarp in the garage, impossible to be brought back to road worthy condition without committing financial suicide. The flip side of this is that there are plenty of low mileage examples stashed away that were purchased foolishly as investments and that could flood the market if prices for that model reach a certain level. I, for one, would sell my Mondial 8 in a heartbeat if asking prices went above $35k, but my guess is that my kids will probably inherit it first... and there aren't even any rug rats running around right now.

So, now that the beer in the Sakura lounge at Narita Airport has started to kick in, let's take a look at the main Ferrari models in the "classic" range. The best performer percentage-wise has probably been the Dino 308 GT4. It's not uncommon to see asking prices around $25k (with a few delusional souls trying to get over $30k for nice examples). The Dino is a great car and pretty simple to maintain, however, most of the cars that are coming to market need work and you'll still be upside down if you pick up a project car. That is, unless Uncle Phil willed it to you. Even then, you might wonder exactly how much of a favorite you really are.

Mondials have remained more or less flat over the last two years, a fact that isn't going to change anytime soon. Regardless of how many times I say that I feel my 8 coupe is a better car than my 308 GTS QV, the market wants the "more sporting car" rather than the solid GT. Prices for solid 8 coupes are above $20k now and most t Cabriolets carry asking prices in the high $40Ks.

The 3x8 cars have also remained more or less flat. The subtle price increases of the early cars are still more or less only matching inflation and, therefore, nothing new. 328s continue to bring a premium and, while some people are asking (in my opinion) way too much for 1989 328 GTSs, there are buyers out there that are willing to pay the premium for the modest increase in performance and quality over the previous model years. 348s are still depreciating and the prices will continue to come down as the baby cheese grater finds its equilibrium point in the market.

Ah, this brings us to the 365 GT4 2+2s, 400s, 400is and 412s: the most unloved cars to ever come out of the gates at Maranello. Despite public opinion, however, these cars have managed to attract a very small but dedicated lunatic fringe of enthusiasts. In fact, rumor has it that my name was recently submitted to become head the club, something that I would be proud of if it wasn't for the fact that there is only one member. The good news is that asking prices on these cars have started to sneak upward. Maybe people have begun to listen? Possible, but a more likely scenario is that the bad cars are starting to get scrapped as owners have come to the conclusion that it is cheaper to write the car off than try to restore it. While asking prices have gone over $30k for all but the 412s, actual sales prices tend to be in the mid $20Ks... and that is a merda-load of car for $25k! As always, though, refer to the above comments regarding condition.

Finally, let's take a look at the flagship cars. Surprisingly, Boxer asking prices have risen approximately 15%. Yes, that looks nice, but it's nowhere near the positive changes - either in value or percentages - that the Daytona coupes have enjoyed. The rise in value of the older cars has helped move the Boxers along, but it always has been hard to find a solid BB in the USA that wasn't either butchered in the EPA/DOT conversion or just poorly maintained. These two facts tend to keep buyers away from a car that I consider to be the last "raw" Ferrari experience (with the exception of the F40, that is).

Testarossas are more or less still depreciating. This was and still is an expensive car to own, maintenance-wise. While most people my age had a poster of one on their bedroom wall as a kid, dreams are one thing - looking at a stack of invoices is something entirely different. There's still a premium for the later cars, especially the F512M, but my prediction is that the market will eventually see it as just a futzed-with design and an attempt to squeeze the last bit out of the market before introducing the 550 Maranello. As such, the styling will probably not be considered timeless.

Okay, so that covers most of the cars out there. If money really is cheap and there are buyers for the cars, why aren't the prices higher? My take on the whole situation is that the vintage car's time hasn't come. Look at who the biggest fans of the models are, people in their 30s and 40s. Guess what? Those people are still paying off their mortgages and saving up for their kids' college educations. Something like a Ferrari hasn't really crossed their minds yet (but getting a good deal on a Volvo or Lexus has). The buyers right now, for the most part, are the enthusiasts that do their homework before making a purchase. (Well, there are still some mullet-wearers out there that are blowing their inheritance.) If anything, the cars are cheap right now and when people realize how much it will cost to sort a car that needs an SD2 or SD3 computer in ten years, the prices are going to go up. After all, what's the point of spending money on a newer Ferrari when you can't even get it started?

Well, they just announced my flight. Until next month…

Cheers,

Erik Nielsen,
Narita International Airport
Narita, Japan