Number 1 Favorite Ferrari Picture

My brother and I trying to look cool standing by a 308 GT4 which our dad chose not to buy.

And, Even More

Yet More Ferrari Pictures

More Ferrari Pictures

Favorite Ferrari Pictures From 2008

The advantages of getting older

There are many positive aspects to ageing, not the lease of which is the opportunity to provide wonderful Christmas gifts for your children. Sometimes you come across gifts which you as the parent are also interested in. Then you get to take advantage of another benefit of ageing, significantly more disposable income to spend on toys. For Christmas Barb and I got the kids a 1/32 scale slot car set. The set came with two cars modeled on Ferrari and Mclaren F1 cars. I purchased some extra track pieces and a ringer, in the form of a 355 Challenge car, for myself. As it turned out, I had not purchased enough extra pieces for us to construct a truly engaging circuit and my ringer was not match for the cars which came with the kit. A trip to the hobby shop was in order. We bought an extra set with more track, now we have about 40 feet, and two extra cars. I spent some time figuring out how to cheat with my car and now the 355 is the ringer it was meant to be. It is significantly less expensive to modify a 355 slot car than a real 355.

Another positive aspect of ageing is the chance to learn from your mistakes. You don’t have to be old to take advantage of this but it seems to help. Last year I racked up about 3000 miles on the Ferrari. Not enough. I did have many fun and entertaining experiences with the car but I never really got to know it, never used it as a daily driver. Since I get another chance, maybe not another year, but more time with the car I am going to drive it more frequently.

One more year with a Ferrari?

Now that I am keeping the Ferrari a bit longer I feel like I am getting a second chance to use and enjoy the car. Once the car became mine many of the plans I had to use it went out the window. I started treating it as a precious object rather than a really wonderful car. I also became too possessive and protective of it. Now I have a chance to behave like a slightly more mature and enlightened Ferrari owner. I think it was the process of getting ready to sell the car then mentally selling it that triggered this change. I realized my Ferrari ownership experience was while not incomplete it was not as full as it could have been. I expect I will have the car for a good portion of next year as well and plan on spending the winter months thinking of some fun adventures to have with it.

I have been working diligently on the book. Thus far I have around 140 pages that I am proud of. That said I am continually reworking some portions of the book.

Ferrari Pricing Part 2

I am now several days over my one year with the Ferrari. The car is slumbering, hibernating is probably a better word, in my garage. The Porsche is dry in the shed I built a few weeks ago. The shed has survived some unusual winter weather. We have well over one foot of snow on the ground at our house and it is still snowing. There is little chance for a winter drive in the Ferrari this year.

I have been watching the market for Ferraris for the past few weeks and on the surface it appears to be all bad news, if you are a seller. I have a hunch, only a hunch, nothing more than a hunch. Good cars are still commanding a premium and while the total price is now less than six or nine months ago good cars have not fallen nearly as far as not so good cars. There are many stories of cars selling for, historically speaking, exceptionally low prices, but I have yet to hear of a car with an exceptional history and desirable options selling at a big discount. Not saying it won’t happen but I wager a number of the “cheap” Ferraris which have traded recently come with a significant maintenance liability.

David's Ferrari Pricing Index (DFPI)

Full disclosure.

I have no credibility when it comes to gauging the future prices of Ferraris. I make all this stuff up and as my track record clearly shows I thought it wise to purchase a Ferrari in December 2007, what is now acknowledged as the first month of our current recession.

How’s that for timing the market?

While it is difficult to determine selling price and the variables which affect asking (and selling) price, mainly detailed maintenance history, are not easily compared between individual cars I believe I would not be exaggerating by saying prices for starter Ferraris, 348s, 355s, and 360s, have fallen between 25% and 40% in the past 12 months. Where they will go from here is anyone’s guess. Nice 355s appear to be trading in the $55,000 to $70,000 range. Nice 360s appear to be trading in the $100,000 to $130,000 range. Certainly, there are incidences of nice cars trading for less than the low point of these ranges but it appears that well maintained cars still command a premium. They should. At these prices it does not take much for deferred maintenance to amount to 30% to 50% of the purchase price. While I expect the price of all starter Ferraris to continue downward I anticipate 360s trajectory to be the steepest. Not because they are bad cars but because there are, for Ferraris, quite a few of them. Currently there are 3 times as many 360s for sale on ebay as 355s. I would expect any 355s or 348s with questionable history to be difficult to give away.

This is not all doom and gloom.

While Ferraris are less liquid than equities the cars have held their value better than many stocks. I also bought GE (please feel free to ignore my investment advice as well) about this time last year for roughly $32.00 per share. That investment has fared about as well as my Ferrari purchase, a 355 is not an investment, when maintenance and depreciation is factored in. The difference – depreciating the Ferrari over the past year has been a heck of lot more fun than watching GE’s stock wither. What’s more the next year or so is going to present opportunities to pick up Ferraris and equities at depressed prices, assuming you have a firm constitution. This is not such a great thing if you have a Ferrari but I think starter cars, especially the sub $100,000 cars will not be too difficult to get rid of. Sure they will trade at a discount but it will be measured in thousands not tens or hundreds of thousands like Enzos, F40s, and other investment Ferraris. Times are not all bad for Ferrari owners either. If you are fortunate enough to be in a position to afford your car there are many interesting parts and pieces coming on the market at prices which look cheap compared to last year.

Wishful thinking?

Maybe. While I expect starter Ferraris to be easy to sell, relative to investment Ferraris, I don’t expect prices of 348s, 355s, or 360s to recover. I think the future will be characterized with much bigger price spreads among the cars with the average price well below the levels seen in mid 2007. If there is opportunity in the Ferrari market it will be for buyers of the investment quality Ferraris looking for a deal on an Enzo and for enthusiasts who wanted to buy but were always priced just out of the market. With 10 year old Ferraris commanding the same price as 2 year old Porsches the choice is easy for anyone with ears and eyes. Yes I know purchase price is only half the battle. All Ferraris come with a maintenance liability and the liability inherit with 355s and 360s is not so bad when you consider the $25,000 brake job your new 430 will need.