Collin/Tyson
I'm not discussing cars as an investment or profit making tool. Forget making money off the car. I'm just asking that you consider the REAL cost of the car. The REAL cost of the car is the market price. That's what you are forgoing to enjoy the car. Hence, any depreciaion analysis must start from the cars REAL cost. Regardless of whether you intend to drive the car or not. Even if you never intended to flip the car it still cost you X dollars to drive it (market price at purchase minus selling price) because you could have sold it.

Again I'll go back to the game show. Some game show gives away a car on every episode, the only catch is everyone wants to be on the show to get the car so there is a long wait. After waiting 3 years you get on the show and get your car. The car still has depreciation even if you never intended to sell it because you could sell it. Imagine you won a Honda Accord and 5 years later sell it for $10K but you claim the car actually appreciated because you "bought" it for nothing. Just because you choose not to exercise your option to sell the car at purchase doesn't mean that that initial profit never existed.

Tyson -
Of course a capital asset pricing model sucks for cars; they almost all depreciate. But I'm not using any model to justify a car as an investment. Instead I'm showing that Ferrari's deprecate just like all other cars. People just confuse the profit (whether they ever intended on selling it or not) they make from waiting on a list or having an "in" at a dealership and the actual post purchase (and post decision not to sell the car) depreciation of the car.

The major fallacy that most people make is they think they are buying the car at sticker and laugh at "suckers" who pay huge premiums to sticker to buy the car. If you have any asset (even a depreciating one) and someone offers to pay you $250K for it, how can you call that person stupid if you are choosing not to sell it for that price. EVERYONE PAYS MARKET PRICE, whether by foregoing an offer for market price that another person made or by actually paying that price to someone who owns the asset.

 

It is amazing that this conversation can only happen in the US. In Australia there is no such thing as paying more than sticker. The RRP (or MSRP I think for the US) is the MOST a product will sell ie car. You might not get a discount but you wont pay a mark up. You would be considered insane or stupid to pay more than RRP.

This is another major reason why depreciation is a major factor in the US car market. Hell if you are paying 20% more for the car to begin with then you are already screwed whichever way
you look at it. The car is really only worth the MSRP with a bit of a discount to begin with!

 

True, but then you'd be more of a speculator with good connections. The exotic market can be a very tricky one. Look at the GT-2 as an example. It was hot for maybe 6-9 months here and then sank like the Titanic. Probably the same will/has happened to the CGT. Ford GT is hot right now and then should fall depending upon how many they make. Very few cars can maintain the high level we've seen from the 360 Spyder and select other Ferrari's like the Enzo.

 

so then...
if I am following you,
are you trying to say...
(and correct me if I misunderstand)
that,
if I read between the lines,
to deterine the core principle here...
that in cars,
the same is true,
as with so many things in life...

'hotness' plays some small role in the equation?

 

yes doug, but only if 'hotness' is part of the equation

'hotness' is not necessarily part of the toyota camry's equation for example

 

dayum...
sharky was right...
you r good

 

i hate f-cars

 

"Italian Trash"

 

Ferrari's do depreciate:
We bought a 575, 800 miles later lost 30K
We bought a 360 Modena, 2000 miles later lost 10K
I do agree if you can get them new (like the new 430) at sticker there is a good opportunity to not get hurt, however, I actually (for once ) agree with Tyson, all cars are a ****ty investment!!
Evan

 

u drink too much german hatorade.

 

Italian cars are ****. Things Italians are good at:

1)Food
2)Women
3)Wine
4)Parties
5)Life
6)Making nice looking cars that don't move much
7)Football
8)Clothes (should be higher I know)
9)Corruption in legal, goverment and financial institutions
10)Mafia of course, although the Russians are better nowadays

Things Italians are **** at

1)Making reliable cars
2)Wars
3)Flying any kind of warplane during the 1st gulf war
4)Politics
5)Feigning injury on the football pitch
6)Obeying traffic laws (trust me I lived in Bergamo/Milano for 3 months of every year from age 8-17.
7)Dealing with their neighbors

I could go on but there's no point. I love Italians and have some in me myself (adopted if you will) and I even want them to win the World Cup every four years (after England gets knocked out).

 

You forgot motorcycles Alex, they make good motorcycles!! Can't beat a Ducati, Aprillia, etc.
Evan

 

oh ****.. that they do man.. I agree with that Other than Vespas they DO make some loverly bikes!

 

Not that I want to defend Ferrari, especially with Dr. Bill and his ancient 348 about, but "nice looking cars that don't move"? I don't really think that's too akkurat of a statement.

 

"you have an affair with an Italian.. but marry a German". I'm not sure how many times I have to repeat this b4 the Ferrari guys get it... I learned the hard way... Save ur money and spend it on something else other then an Italian Queen that doesnt put out.