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Can You Afford a Ferrari?

February 1, 2017
By Scott Lewis

Can you afford a Ferrari? I am NOT going to bury the lead on this. If you are reading this, the answer is:

NO!

A working class person cannot afford a Ferrari. Since we have established that you can't afford a Ferrari, this article is going to be about why you can't afford a Ferrari, or you could use it to determine what it WOULD take to afford a Ferrari!

We should set ourselves a realistic, though hypothetical, budget in helping to decide this. For right now I will target a purchase price around $60,000 - $65,000. Why? We will get to the specifics of that next month when I plan on covering other "Super Cars."

Let's do a little background on the Ferrari models. There are four basic models of Ferrari (currently). They are:

Mid Engine V-8
Front Engine V-8
Front Engine V-12 2+2
Front Engine V-12 GT (2 Seater)

Mid Engine V-8 - This model starts with what is affectionately referred to as the "Magnum P.I." Ferrari. The 308GTB & 308GTS. GTB = Berlinetta or coupe, and GTS = Spider or convertible. Before this, the car was actually the Dino 246 with a V-6, but we will skip those for this discussion. The 308 progresses from the late 70's until today. The model number refers to the engine (except the newest one). 308 = 3.0 liter, 8 Cylinder. The 328 followed with a 3.2 liter engine. Next was the 348, going to a 3.4 liter V-8. Then came the F355. This number means 3.5 liter, but 5 valves per cylinder. Then it went to 360, which is a slight departure with a 3.6 liter V-8 but no 5 or 8 in the name. This was replaced by the F430 which has a 4.3 liter engine. Now we get the "8" back in the name with the 458 which had... yep, a 4.5 liter V-8. Finally, the current model in this lineup is the 488. No, the 488 does NOT have a 4.8 liter engine. It has a 3.9 liter twin turbocharged V-8 engine. It produces more power than the 458, so I can only assume Ferrari was afraid owners would not like the number to go down with an increase in performance.

Front Engine V-8 - This is relatively new. It started with the California, and has progressed to the California T, whereas the T is for turbocharged. I have driven one of these and they are very nice indeed. I would consider these a more practical GT car than the 12 cylinder GTs below.

Front Engine V-12 2+2 - In modern times, this starts with the 465 followed by the 612 Scaglietti, and finally the FF (which is for Ferrari Four Seat Four Wheel Drive).

Front Engine V-12 GT - The modern line of Ferrari's flagship Grand Touring cars begins with the 550 Maranello (the 550 was for 5.5 liter engine). It was replaced with the 575M Maranello (getting a 5.7 liter engine), and then the 599 GTB Fiorano (with a 6.0 liter engine, oops). Next up is the F12berlinetta, which is the current grand touring car in the Ferrari lineup. Interesting trivia: at the time of this writing, the F12 is the least expensive production car that has more horsepower than the vaulted Hellcat Charger and Challenger. The F12 has 730 (vs. the Hellcat's 707). Any other car with more than 707 hp is more expensive than the Ferrari F12.

Ferrari used to have a mid-engined 12 cylinder with the Berlinetta Boxer which turned into the Testarossa. Other models really fall under a unique category and not a product line, such as the LaFerrari, Enzo, F40, etc.

Back to it... can you afford a Ferrari?

We are going to concentrate on the Mid Engine V-8 cars. Quite simply, these are usually more affordable across the board.

Early V-8 Ferraris require what is called an "engine out service." Yes, this means the engine has to come out of the car to service it. This is part of the "major service," and must be performed every 3-5 years regardless of mileage. The timing belts on the V-8 Ferrari must be changed more so than your normal car. The belts are located toward the front of the engine (meaning the part of the engine facing the front of the car... yea, against the seats). This is why the engine needed to come out for the major service. Cost? It varies but I am going to just throw a number out there... $7,500, give or take a couple grand. As I said, this will need to be done every 3-5 years. If you want to own one of these you REALLY need to prepare for that. The number is loose. You will need more than just the major services, so the costs could be higher depending on what's needed. Also, since the engine is already out... you might as well replace the clutch assembly. Add another $2,500 to that, approximately.

Let's just say 3-5 years = 4 years. You will need to spend about $10,000 every 4 years on these major items. You will also need to budget about $2,000-$2,500/year for tires, brakes and other items. All in... you are going to average about $4,000-$5,000/year in maintenance for these early V-8 cars. Remember, that's after purchasing one. Plan to save around $350-400 per month. With payments in the neighborhood of $800/month for a $60K loan, you are looking at a budget over $1,200/month.

If you want to see an example of how expensive a Ferrari can be to maintain, watch this video (https://www.youtube.com/watch?v=6hUyTFSj08U) from JR Garage on the F355 they bought. Jump to the 1 minute mark. You can also read this article (http://jalopnik.com/here-s-why-you-should-never-buy-a-ferrari-f355-1706976075) by Doug DeMuro when he was writing for Jalopnik on "Why You Should Never Buy A Ferrari F355!"

The silver lining is that Ferrari put in a removable bulk head behind the seats starting with the Ferrari 360 Modena. Whoo-Hoo! This drops the cost of the major service to around $2,000-$2,500, since you do not have to remove the engine for the major service. Just plan for $4,000-$5,000 every 4 years (major service, clutch, etc), and $2,000/year for tires/brakes/etc. This works out to something in the area of $3,000/year ($250/mo). You might be able to get by with a budget of $1,000/month overall, likely a little more.

Why do it?

The 360 Modena is considered the first affordable Ferrari because of the easier maintenance costs. If you are seriously thinking about buying a car in the $60K range this might not be a bad thing. Rob Ferretti spelled out the cost of owning a Ferrari 360 Modena on his YouTube Channel. I will do a quick summary of this video (https://www.youtube.com/watch?v=a0YEMmyCZRA). Buy a 360 Modena for $60K, put the sales tax as a down payment and finance $60K. Budget $300/month for maintenance. After 5 years the car is still likely worth $60,000. You paid around $4,700 in interest, $3,000 down payment and $18,000 in maintenance. Your out of pocket is $25,700 (not counting the payments toward equity). You sell the car for $60K and walk away with $34,300 (the equity from the loan payments).

Rob compares that to buying a new Corvette for $60,000. After 5 years you have similar loss of interest ($4,700), down payment ($3,000) and maintenance ($6,000, I guessed here myself at $100/month for items like clutch/brakes/tires/etc). That adds up to $13,700. When you sell the car it is worth about half, so $30,000. You walk away with with $16,300... which is less than half the money you would walk away from with the Ferrari.

Rob is clear that you should be making at least $6,000/month to even consider either of these options. He also adds up his own maintenance costs on his personal 360 in this video (https://www.youtube.com/watch?v=T2PJVzsY2pc). He comes up with a total of about $8,000 in 2-1/5 years. That's pretty close to the estimates I calculated above of $3,000/year.

Pricing A Ferrari

I did a quick search on AutoTrader (the day I wrote this) and found these:

1995 Ferrari 348 Spider, 60K miles - $42,500. That is a lot of mileage for a Ferrari. Let's keep looking.

1999 Ferrari F355 Spider, 15K miles - $55,000. Mentioned the last "service out" was done in 2012. So you have $10,000 in maintenance that needs to be done any day. Nope!

1996 Ferrari F355 Spider, 32K miles - $60,000. It did meantion it just had the service out 2K miles ago. Sweet! But Doug DeMuro says never buy a 355!

Those are not the "affordable" Ferraris. The least expensive 360 I found was this:

1999 Ferrari 360 Modena, 49K miles - $63,000. This car looked promising. Here is the description... so you have an idea of the maintenance involved, "Beautiful, Adult Owned & Maintained Ferrari 360 Modena. Major Service Recently Performed-Timing Belt, Timing Belt Tensioners, Front Camshaft Seals, Valve Cover Gaskets, Valve Job, Oil & Filters Changed, Gearbox Fluid & Filter Changed, Coolant Flush, Spark Plugs, Cabin Filter, Air Filters, Complete Intake Manifold Resealed, Camshaft Variator Update Performed, New Motor Mounts, All Genuine Ferrari Parts, New A/C Compressor, Tubi Exhaust System-Customer Headers, High-Flow Catalytic Converters, Tubi Muffler, Challenge Stradale Rear Grille, All Four Tires Less Than 1 Year Old, Less Than 2000 Miles On New Kevlar Clutch Kit, New Rear Main Seal, Hydraulic Shift Actuator Rebuilt, New Interstate Battery, Absolutely No Leaks Or Problems Whatsoever. Runs, Drives & Sounds Amazing!"

49K miles still seems high to me for a Ferrari, but not bad if it is properly cared for.

If all that service and mileage freaks you out, the next up (in Red!) is:

2003 Ferrari 360 Modena, 28K miles - $74,000. It did not mention the service history, so more research is required. And we just bumped well past our $60-65K budget.

Dealers

There is a saying in these circles. It goes something like this: The less you pay for a Ferrari the more it costs. If you are bargain shopping a Ferrari then you will likely get one that has had less than ideal maintenance done to it. It is hard to find good Ferrari mechanics that are not working at a dealer. I hate dealers. They rip you off. However, if you live in these circles, the people that CAN afford a Ferrari do take them to dealers for service and the dealers back up that service. Yes, they charge a lot, but you do know it gets done right. People who buy Ferraris and can't afford them, take shortcuts on the maintenance. Those cars will be expensive to own.

Think of it this way... you ALWAYS want to buy a Ferrari that has been serviced properly at a dealer. Not that it can't be done properly somewhere else, but who knows. Then you should also take yours to the dealer when it needs service to preserve its resale value.

That leads to NOT buying a Ferrari on AutoTrader. A Ferrari dealer will NOT put a car on its lot that does not have good service records. They have a reputation to uphold. The ONLY Ferraris... on AutoTrader... under $100,000... that were at Ferrari dealers... were these two:

2003 Ferrari 360 Spider, 24K miles - $78,800
2003 Ferrari 360 Modena, 9,730 miles - $94,985

Both were bright yellow. Not my preference.

I still wanted to see what was available. I went to the 4 Ferrari Dealership websites in Texas to see what they had in stock:

San Antonio: No 360s. They had a F430 Spider with 16K miles for $137,900.
Austin: No 360s, no F430s. 2013 California with 5,641 miles for $169,995.
Houston: 360 Modena Race Car for $74,995 with no details. F430 Spider with 4,400 miles for $149,995.
Plano: No 360s, no F430s. 2010 California with under 10K miles for $129,900.

Conclusion

Can you afford a Ferrari?

NO!!!!!

Next time I will see what we can look at in place of the Ferrari. Do you want to drive a Super Car? Wait until next time to find out.

BTW... if you are truly solvent, and can afford $200,000+ for a new (or nearly new) Ferrari all the maintenance is included. That's right, I was checking the 458's at my local dealership and they include 7 YEARS of maintenance. If you have the means, you should consider this. These cars depreciate a lot slower than most cars, and if you don't have to pay for top-of-the-line maintenance from a dealer, why not.
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