When Do you Decide You Can Afford A Ferrari?

There's one thing my trailer park parents used to say.

It is, If the bank says you can afford it that is good enough for me!

The Banks would know their real good with finances and stuff and wouldn't lead you the wrong way!

So with that Dont think about it just go buy it!

 

I do not have a formula, but I will say I paid 100% cash and that I was debt free, including no mortgage, prior to purchasing. The car I choose was about 1/20th of my net worth. I now owe $40,000 in home equity to the bank (car cost 70k), but since I am about to move down scale house wise and expect to take a $350,000 profit between the homes, I will still be $310,000 ahead of the game.

If you have to borrow the money and have other debt, how can you pay $7,000 for a major service, charge that as well?

I live my life on the worst case scenario side of the equation, while I fully realize most people live on the best side scenario. When the market tanks, unemployment hits 15% and we have a depression, I can chug along for a couple decades without fear of starving. To me, that helps me sleep at night, how people can have $6,000/month in payments on a $120,000/year income is beyond me.

I will say a Ferrari is cheaper than a summer home or a boat.

 

When you can pay cash for it, and incur any debt. That's when it makes sense to me.

 

Yes , sell the M3 and get the 355 if you can afford it ( you, only you know what this means ). Life's too short no to.

Ill get one as soon as i can afford the price and 2 years maintenance. Might sound nuts but passion rarely is logical.

 

When I turned 34 ( This July ) I sold my '01 M3 & bought a '95 F355. I financed about 30k of the purchase. I don't regret the financing or the purchase. But I wasn't delusional about what I was getting myself into by buying a Ferrari. I have spent thousands on service. I can't park my Ferrari in a movie theater parking lot or a local steak house for dinner. You have to make sacrifices as far as where you can go & do things in your Ferrari. Hell, my M3 was practically invisible compared to the F355! I could take the BMW anywhere I wished. The Ferrari is a toy. What kind of Ferrari were you looking to get?

 

When you can't stand not having one anymore.

 

Which Ferrari?

On the low end, everyone can buy a 308, Mondial, etc. and if you wrench it yourself you have a fun hobby and a cool car. Even if you pay for the belt service, you get money back in lack of depreciation (over a Honda etc.) when you sell. You need a spare car, of course.

The newer stuff with computers, I'd say you need a six figure income, or live alone and cheap! And the Testarossa, 512 TR and the BB's are known for VERY high repair costs if/when something goes wrong. If you have to ask if you can afford these cars you likely can't.

Stick with the 3*8 series or maybe a 400i and as long as you don't blow the engine you'll get back most of your $$$ should you decide to bail.

Ken

 

if it's anything <360, keep the M3.

 

When your financial wherewithal is such that you don't have to ask yourself that question...it is then time to buy.

 

My case is just like a couple of others here, when i was ready to pay for it in cash, then that was the time! Good luck!

- Cliff

 

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yes, this is exactly right.

 

I don't own a Ferrari YET, but the way I see it is: Yor home needs to be 100% paid for. After that what you do with your money is up to you. My plan is to have a paid for home, then have enough to pay half of the purchase price of the car down. (100k car will need 50k down payment) then finance the rest and do services out of pocket. Thats just my logic, certainly not the best but I don't want to wait all my life before stepping into my dream.

 

you'd be better of financing the house vs the car.

 

I don't know that it's as 'clean' as going from an M3 to a 355. Is your M3 your daily driver? Do you expect the 355 to be? Do you have something else to drive? Are you prepared for a $10k unexpected repair bill? You may be talking about going from one car to two.

 

When you have sacrificed most other pleasures/neccessities in life - and saved enough for the purchase price, PLUS another 50% (of cost) for running/maintaining over a 5 year period.
It's similar to boat ownership in that respect...

 

when you dont have to think about buying one or worry about it then do it

 

If you currently have an M3 then you can certainly afford a Ferrari. Whether your desire to have an Fcar outweighs the problems as mentioned above, go get what you think you can afford / enjoy considering repairs / etc... Just keep in mind you might need a car other than the Ferrari as a utility vehicle (errands, shopping,etc...) So maybe a 348 + Honda Accord instead of a 355. Just a thought. Now go buy the Ferrari and enjoy!
BT

 

I was thinking the same. As long as your mortgage costs are reasonable - i.e., nothing stupid like the $6K monthly on a $120K salary that was mentioned before - and you can pay cash for the car, it's probably OK. If you are borrowing to get the Ferrari, I would question whether you'll be comfortable handling a $3K-$8K major service, $2K clutch, etc.

You would also want to contribute the maximum to your 401K/Roth, make sure you have no other debts (especially credit cards) and MAKE SURE that your retirement planning is on track.

To answer your specific question, one way to look at it is this: you buy the car, the gearbox goes bad, and the bill is $12,000. Could you write a check to cover that? (Don't respond. Just close your eyes and imagine, right now, that $11,988.23 service invoice in pale yellow paper sitting on your desk.)

Another strategy is to consider that if you could afford a brand new $90K Porsche 911, with zero repair costs for 4 years, your Ferrari budget might be $70K, depending on the financial cushion you'd want for maintenance. For a 308, $20K might be a lot of cushion, but for a 348 it probably isn't (more $$ parts and services.)

In any case, if you can't pay cash for a weekend toy I would personally be reluctant to buy it.

BTW, I had a serious illness in 2001 and was fortunate to recover fully. There is a lot to be said for enjoying life as it comes -- so if having a Ferrari is going make you happy, I don't want to discourage you. I rearranged some other expenses - i.e., sold my BMW and Benz and got a less costly daily driver - to accommodate an expensive weekend toy.

 

as the owner of both a big (37 ft.) boat and a ferrari i can state without reservation if you can afford a boat a ferrari is a piece of cake, no comparison at all. ferrari maintenence is downright cheap when compared to a boat in saltwater. so far this year all told my boat has cost an average of about 1k per sail. not too many f car's cost that much per drive. having said that, if i were forced to sell one of the two, it would probably be the car. just having a boat that is capable of taking me anywhere in the world is my security blanket. any time life sucks i tell myself i could just bail.

 

Personal experience: In fall 2001, I made the wondrous discovery on ebay that the price of certain vintage Ferraris had fallen to the point to where I could conceivably pay cash for or short-term finance a decent 330 2+2 or 250 GTE, and this is indeed what came to pass with my 330...didn't buy it off ebay, though. I was obsessed from that day on and a year later owned my car...had always wanted a vintage 12 but gave up and had forgotten about it after the big price runup in the late '80's.

 

Ditto airplanes. I recently owned a 200 Kt airplane and the last year I owned it, it cost about $250/hour to operate. A low utilization rate didn't help, but even with high utilization the best would have been about $135/hour. Not far off from $1K per flight.

Having paid the bills for that, I realized that a Ferrari isn't much different than an airplane. Regular maintenance and check writing is likely to be a fact of life, but the car is in the garage and you can take it out anytime even for a 30 minute "quickie". Whereas an airplane (or boat) trip requires more planning, setting aside a block of time, easy to forget it's there (until you pay another bill), etc.

Anyway, as far as when you can afford it; basically when you can write a multi-$K' check once or twice a year and it won't impact your financial responsibilities (house, food, kids, kids education, insurance, retirement, etc). If everything else is taken care of and you still have money accumulating, then time to enjoy the results of your hard work.