Articles

Michael Sheehan's Ferraris-online.com Article

Just Used Cars

The 430s may not have cam belts, but a brake job with new carbon-fiber rotors is $30k, which is about 25% of the value of what is now a $125k used car

As appeared in:

Sports Car Market—July 2011 issue

Sheehan Speaks

by Michael Sheehan

1983 Ferrari Mondial
1983 Ferrari Mondial

I am often asked why I don’t traffic in or write about more Fiat-era cars, such as the 308s, 328s, 348s and the 400s, BBs and TRs.

The answer is simple. One of the great realities all Ferrari dealers and brokers know all too well is that the brain-damage factor—from both the buyer and the seller—is inversely proportional to the value of the car. Simply put, there is far more frustration and time killed in selling a $30k Ferrari 308 than in selling a $300k Ferrari Daytona. It also doesn’t take a Harvard MBA to realize there’s a far larger commission on a $300k sale than on a $30k exercise in frustration.

As for the time needed to educate would-be sellers and first-time buyers of these entry-level Ferraris, yikes.

A quick history lesson

In the late 1960s, frequent strikes crippled both Ferrari and Italy. In addition, Ford was hammering Ferrari as the costs of sports-prototype endurance racing spiraled ever upwards.

All good things come to an end, and by 1969, Enzo’s racing habits and low car-production numbers required a Fiat bailout. Fiat took control of production cars, while Enzo continued to run the racing department. In two years, Fiat’s production engineers bumped Ferrari road car production from 619 cars built in 1969 to 1,246 in 1971. Imminent U.S. Environmental Protection Agency and Department of Transportation regulations and pressure from upstart Lamborghini forced Fiat/Ferrari to develop an all-new new flagship, the mid-engined 365 BB and the first of the all-new high-volume V8s, the Bertone-styled 308 GT/4 for 1974.

While the Fiat era at Ferrari is remembered for big bumpers and bland styling-by-committee, all manufacturers suffered through the ignobility of bumper and headlight demands, power-robbing emissions and the tripling of gas from 33 cents to $1 a gallon. Italy also suffered through the terror of the infamous Red Brigade, which made the 1970s a time when driving a Ferrari was asking to be kidnapped. So, making, selling and buying Ferraris with bland styling and little power was a matter of survival.

Fiat cranks out the Ferraris

In 1976, Fiat introduced the highly successful 308 GTB and its multiple later evolutions. V8 production doubled—and eventually tripled—over the number of Flat-12s and V12s, with over 18,617 ubiquitous 308 GT/4-GTB-GTS and QVs built.

Add in another 7,430 of the 328 GTB-GTS followed by 8,708 of the incredibly dated 348s. Fiat also expanded the number of Ferrari dealers, thanks to their high-volume, affordable (a strange word to use in context with Ferrari) V8 cars. No longer toys of the ultra-rich, these new generations of Ferraris were now accessible to the merely wealthy.

Fiat-Ferrari added the 365 GT/4 2+2, 400, 400i and 412 cars as businessman’s expresses with 3,369 built. Another 2,300 flagship 365 BB, 512 BB and 512 BBi were built followed by 9,957 Testarossas, 512 TRs and 512Ms. As for the Mondials, 6,832 were built, making them both the poster child for bland, dated styling and high maintenance of the Fiat era.

On the upside a Ferrari owner could now drive to Las Vegas knowing the air conditioning would work in the heat of the day and the heater and defroster would warm the car and clear the windshield on a cold night! As time passed and engineering caught up with emissions regulations power was more than adequate, parts availability was tolerable and service costs, for a Ferrari, were reasonable. Production increased from only 619 cars a year in 1969 to 4,487 cars built in 1991, with a total of 55,500 Ferraris built in that period. Ferraris had become a high-end commodity.

The dreaded cam belts

Excluding the 365 GT/4, 400 and 412, all of the Fiat-era cars are mid-engined and have cam belts, which often means an engine-out service. Cam belt replacements at every three to five years are expensive at $3k to $5k-plus for the early V8s. The cam-belt-replacement cost climbs to $5k-$8k on the 348s and $6k-$10k—plus the usual while-you’re-at-it extras—on the flat 12s.

An engine-in cam belt service starts at 10% of a 308’s market value, while an engine-out service on a 348 can add up to 30% of the car’s market price. Engine rebuilds at $25k on the V8s and $30k-plus on the 12-cylinder cars just don’t pencil. These costs will only go up as the Fiat-era cars age, and there are fewer shops and technicians familiar with these cars.

The early cars have carburetors that can be problematic and conventional ignition systems which can be hard to adjust and can foul plugs. All are now 20 to 35 years old, so every piece of rubber, shocks, the brake lines and radiator and heater cores are long past their replacement dates. Paint and leather are often beyond the “patina” stage.

California smog can be a nightmare on a carburetor-equipped car, but is usually less drama on the fuel-injected cars.

Looking down the road, the future cost of major restoration on any of the Fiat-era production cars is a deal killer. In another decade how will an owner rationalize spending $75k-$100k for a resto on a $45k 328?

Montezemolo-era—not much cheaper

Just as Enzo was strong-willed and driven, Luca Cordero di Montezemolo would introduce all-new, state-of-the-art Ferrari road cars after he took control in 1991. The 355 was a quantum evolutionary leap over the 348, but as the last of the engine-out cam belt cars, a service on the 355 has made them the new 348 to service shops. The 360, 456, 550 and 575 can be serviced with the engine in place, which cuts maintenance costs, but not by much.

With early 360 coupes trading in the $70k range and early 360 spiders in the $85k range, we’ve lost too many sales to over-zealous pre-purchase inspections by authorized dealers who come up with a $20k “recommended work list” for a new clutch, new brakes, all four tires, a major service and other make-it-like-new work.

As for the 430s, they may not have cam belts, but a brake job with new carbon-fiber rotors is $30k, about 25% of the value of what is now a $125k used car. While modern Ferraris have become “just used cars” they’re both very expensive to buy and expensive-to-maintain used cars.

The Montezemolo-era cars are only heading down in value, and they’re taking the Fiat-era cars with them. Early 360 coupes are $70k, the early spiders are $85k, 456 GTs are $50k, and the 456 Ms are $60k. Ferrari 550s are $75k, and 575s are $95k-$100k. Given those low prices, how can a 512TR, for example, be worth more, contrary to what most owners want to believe? Of the 55,000 Fiat-era production cars built, only the first and last of the flagships: the 365 BB and the 512M are collectable, with less than 1,000 cars in total.

A glutted high-performance market

High volume, a newer-faster-greater Ferrari every few years and competition from Lamborghini, Porsche, upstart Audi and others have flooded the market with ultra-fast, ultra-nimble exotics. The rich will always have the latest model, so there is no end of two— or three-year-old exotics coming off lease at steep discounts to the new price. If you’ve always wanted a Ferrari and must have a Fiat-era car, the good news is that they were long ago fully depreciated. The bad news is that they have virtually no upside and will always have the downside of high maintenance.

If you prefer the more-sophisticated Montezemolo-era Ferraris, the 456, 360s, 550s and 575s are close to, if not fully, depreciated, and maintenance costs are also less expensive.

All this said, I’ve long opined that every enthusiast should own one Ferrari in their life. As my generation, the Baby Boomers, head into the sunset, I remember a quote about Ferrari ownership that I heard more than 40 years ago that inspired the purchase of my first Ferrari:
“It’s the nicest thing I ever did for me.”

So if you need one, and have never had one, ignore everything you have just read, put one in your garage, and change your life.