Chasing the Market Down

These days, the state of the market is the focal point of almost every conversation, whether you are talking to a buyer, a seller, or another dealer. The good news is that prices of old Ferraris have started to recover, but those of newer cars haven’t and never will. They are just exotic, high-volume used cars and depreciate like everything else, from Acuras to toasters.

Enzo would be proud
The cars built while Enzo Ferrari ran the show are bouncing back. For example, in December 2008, 1971 Daytona s/n 14569 was advertised for sale. Finished in silver with a burgundy interior, with very nice older paint by Junior, it was bought new by the late SCM Contributor Raymond Milo. It had a well-documented ownership history, a full set of books and reams of paperwork back to the original purchase documents.

There were many inquiries but only one offer, for $225,000, substantially below the $295,500 asking price. The might-be-buyer test drove the car, had a pre-purchase inspection done, then faded away. The frustrated owner was willing to take the $225,000 offer, but when it evaporated he took the car off the market.

Eight months later, in September 2009, an increase in traffic justified the owner putting this Daytona back on the market. There were only two changes; the owner’s bottom line was now $250,000, and 300 more miles had been added to the odometer. Bidding opened at $250,000, quickly went to $257,500, and the car sold.

Demonstrating that cars will move if the price is right, at Fantasy Junction, Spencer Trenery reported that 1961 Ferrari 250 GTE s/n 2713, initially listed at $115,000 back in late 2007, recently sold for $109,000. He also reported a smart seller taking just north of $600,000 for his 1967 Ferrari 330 GTS, s/n 9369, after nine months of advertising at $695,000.

And in Fort Lauderdale, Florida, Tom Clark of the Motorcar Gallery reported that 1973 Euro Daytona coupe s/n 16819, which arrived in September 2007, finally sold for $335,000, which included an ’83 512 BBi in part trade. That is an exceptionally high price, but we don’t know how the Boxer was valued, and in any case, that was after more than two years of being offered for sale.

How the rules change
Moving on to the Fiat and Montezemolo eras, the rules change. As I wrote in December 2008, “Regardless of whether prices are up or down, it always takes the best car, best documentation, best service history, best marketing, and best price to sell. Since very few cars meet these criteria, you need to have the best price comparable to other cars. Buyers do not wake up in the morning and decide to buy the highest-priced, least-documented car on the market, yet I’m amazed at how many sellers refuse to grasp this concept.”

If an owner wants to sell in today’s market, in my opinion he must follow two steps.

1. Accept what your car is worth, based on confirmed sales and not wishful asking prices on web sites or in various publications.

2. If your car doesn’t sell in the first month, and you really want to turn it into money, be prepared to drop the price about 5% or $5,000 every two or three weeks until it sells. I guarantee there is a number at which it will sell; you just might not like it—at first.

Low production helps…
With only 387 365 BBs, 929 512 BBs, and 1,007 512 BBis, both 365 BB and 512 BBs sell well if priced right. For example, in September 2009, 1981 Ferrari 512 BB s/n 35761 was advertised at $129,500. Thanks to a well-documented history, one well-known owner for 25 years, and only a few hundred miles on an engine and gearbox rebuild, bidding opened at $115,000, and the Boxer sold for full price within a week.

…high production hurts
A 1985 308 GTS QV, s/n 57943, a double platinum, first-in-class-winning car, was advertised in December 2008 at $49,500, but the response was zero. In March 2009 it was re-listed at $39,500, a 20% price drop. There was interest, but no offers. In October the price was dropped to $34,950, there were multiple full-price offers, and it sold at the asking price. With over 15,000 total 308 GTBs and GTSs built, collectibility is negligible, and the only way to guarantee a sale is to drop the price until it sells.

Clark had a similar story in Florida with 1986 Ferrari Mondial s/n 63071, which lingered from October 2007 until September 2009. Despite a hefty 49,000 miles, everything worked and the car eventually went away when the seller decided that $37,000 was enough.

Moving up to the Montezemolo era, with 3,222 total 456s, 3,600 total 550s, and nearly the same number of 575s built, these entry-level V12s still sell surprisingly well, perhaps because they offer a lot of performance for the money. My sources tell me that low-mileage, fully serviced 456 GTs are $50,000–$60,000, 456 Ms are $65,000–$75,000, 550s are $75,000–$90,000, and 575s are in the $100,000–$110,000 range, so these cars hit a sweet spot in the market.

360s as commodities
With over 18,000 built, 360s are commodities. Every factory dealer’s showroom floor has one or two, every independent’s floor has one or two, and another 50 to 100 are offered regularly on eBay and other web sites. With several hundred 360s always on the market, they are a tough sell when premium priced.

Shawn Williams at Exclusive Motorcars in Los Angeles tells of a black 2002 Ferrari 360 he had on consignment for eight months. Starting at $129,995, offers came in, but even as the price was lowered, the offers sank as well. It recently went away for $70,000 but he thinks had the starting price been $105,000, the car would have sold in the first month for between $90,000 and $95,000.

Another example is 2002 360 Spider s/n 130024, sold last October. With an unknown service history, no books or tools, 21,450 miles, and finished in dark green with tan leather, it proved that a green Ferrari is almost sale-proof. The asking price was $79,500, the best offer was $71,000, but it failed its pre-purchase inspection because of a bad valve and was sent to an auto auction. Buyer beware with this one!

Too many lease-backs
At the top end of the newer cars, the mighty have fallen. The 599s listed for $280,000–$325,000 when first available in 2007, and sold for that plus another $150,000–$175,000 as the “gotta-have-it-now” premium over sticker. In August 2009, 2007 599 s/n 149814 was advertised. It had just 9,600 miles and the price was $269,500. Five months later, the price was dropped to $239,500 before it finally sold. With dozens of 599s coming off lease, the market is saturated.

Still, some sellers do get the idea. Trenery reports that 2005 Ferrari 612 s/n 138031, with 30,000-plus miles, was advertised at $126,500, but when a real $100,000 offer materialized in late 2008, the car was sold.

Looking at the big picture, the low-production, user-friendly Enzo-era cars such as the 250 GTE, 330s, 365s and Dinos are enjoying a modest upturn. But while Enzo-era Ferraris up to $1m are selling surprisingly well, the top-end cars—those over $2m—are on hold. Many buyers want a 30% discount from market highs of early 2008, and few sellers are willing to sell at that price.

I have heard of multiple offers in the $17m to $25m range for a no-stories Series I GTO, but the long-term, well-heeled, financially secure owners will not sell. Today’s market is very different from that of 1989–90. Today’s owners are end users, not speculators. Owning a GTO (or SWB or TdF) is a ticket of admission to events they could never get into otherwise, and they’re not about to give up. They can, and will, sit out the storm.

Low-volume Fiat-era cars such as Boxers, 288s, F40s, and F50s sell well, but high-volume Testarossas and 400/412s are hard to move. The 308s and 328s sell, but usually below the seller’s expectations. Entry-level Montezemolo-era V12s such as the 456, 550, and 575 sell in the $50,000–$110,000 “affordable” range, while the 612 and 599 move very slowly because so many are coming off lease. As for the 360 and F430, with hundreds for sale, it’s a buyers’ market.