When I began trading Ferraris in the early 1970s, there were two types of buyers: flashy young men who made lots of money and thought the cars were “cool,” and engineers in their 30s who bought the cars for their mechanical intricacies. Today those engineers are in their 60s and while some of them still have cars sitting in their garage, they are no longer buyers. The flashy young men are now baby boomers in their 40s and early 50s. When it comes to Ferraris, they have “been there, done that.”
Many baby boomers who couldn’t buy a Ferrari in the early ‘70s became lawyers, doctors and businessmen. By the mid to late ’80s, they were making money they never dreamed of in their college days. Add in booming economies and liberal monetary policies worldwide, Enzo’s imminent death, and Ferrari prices doubled every year from 1986 to 1989. A speculator’s dream come true!
As a simple example of the run–up in the market, European Auto Sales and Restoration (a company I owned) bought a 1957 Ferrari 250 TR (S/N 0732) on August 17, 1987 for $1.5 million and sold it, needing restoration, to a Japanese speculator a month later for $95,000 more. We thought that was a great deal.
After the restoration was completed, European Auto purchased the very same 250 TR back from the same Japanese speculator for $2.5 million on October 13, 1988 and sold it to an American speculator the same day for $3.5 million. The market was on fire.
Only eight months later, on June 16, 1989, European Auto brokered the same car for the American speculator to an Italian for $4.5 million. The crash was inevitable.
Almost ten years later we are in a new Ferrari boom, but the speculators are gone. In their place, today’s buyers are usually baby boomers, in their 40s or 50s, who were too busy working to be part of the last bubble. They watched from the sidelines or perhaps bought a single Ferrari and still have it today. Today they have substantial wealth and want to buy the best.
Their wish list usually begins with a 250 GTO, a 250 TR, or a 250 SWB California spyder, and then goes on to a 166MM, a 375MM, or other such super exotics. Rarely does the list include 330 GTCs, Daytonas, Boxers, or other “street” Ferraris. As a result, the top–level cars have doubled and tripled in price in the last three years.
But the common denominator to almost all sales, whether the car be a Lusso or a 375MM, is that the cars are going to end users who are buying their dreams and plan on keeping them. Rarely do cars go from dealer to dealer without a real customer in sight. Today’s buyers are far more patient, and expect complete market surveys and evaluations before buying. These buyers are now content to wait and be assured that they’ve bought the best car for the best price in the best condition. It’s a new world of end users instead of speculators. It’s certainly more stable, and far less likely to end with the kind of crash we had in 1990.
MICHAEL SHEEHAN has been a Ferrari dealer for 30 years as well as a race car driver and exotic car broker.