By on October 16, 2012

Ferraris are expensive, Porsches (usually) less so. This is something that every kid on the street knows, right? Turns out that it is, as the song says, truer than true.

This week, Good Car Bad Car‘s market master Timothy Cain looks at Ferrari pricing and finds that the Italians have been raising the prices of their core vehicles at a pace well beyond the inflation rate.

The Ferrari F355 was priced at $121,495 in 1998. Who knows what Ferrari clients actually paid once they optioned their cars, but that’s the USD price as quotes it. Expecting the price of the F355’s great-grandson to simply be $121,495 plus inflation proves to be silly. Inflation only takes the total up to $171,717. In fact, the 458 Italia costs $229,825, an 89.2% jump from the F355’s price; a 33.8% jump above inflation.

What about the competition, real and imagined?

Adjusted for inflation, the 1998 Mustang GT’s price would be $28,479 in 2012 dollars, just under the $29,710 Ford actually charges… Adjusted for inflation, the 1998 Mazda MX-5 Miata would cost $27,030 in 2012 dollars. The MY2012 MX-5 Miata only costs $23,470… The gorgeous old school 1998 911, with its comparatively anemic 282-horsepower engine and atrocious 14-mpg city fuel economy, would cost $90,102 in 2012. The current 911 Carrera is priced from $82,100.

I don’t know about that 14-mpg part; my 993 returns 24-26mpg in mixed use. And as every TTAC reader knows, I’m not sure the new Porsches have anything like the long-term desirability of the old ones. Ferrari, on the other hand… it’s easy to see how each new Ferrari from the 355 forward has been a major improvement on its predecessor, and such luminaries as Sports Car Market‘s Michael Sheehan have pronounced the 360 and 430 to be solid vehicles with lower servicing costs than their predecessors. The 458 may be even better.

Ferrari’s price strategy also respects what the market wants. As Mr. Cain points out in the article, the price of the four-seat F12berlinetta is actually lower than that of the 456GT, its Palezoic predecessor. There just isn’t much of a market any more for the patrician Ferrari, and while your humble author finds the 456 to be timeless and entirely tasteful, the real buyers of these cars want the most outrageous two-seater possible. Load the passenger seat with two Estonian prostitutes and ski the mountain of coke in your suite at Wynn! The American dream!

It’s also instructive to consider the fact that, although the 993 and F355 weren’t that far apart performance-wise in 1995, today’s base 991 Carrera and 458 Italia aren’t even in the same zip code. The 458 plays hardball with the GT3RS and the GT2. It’s a genuine monster of a car around a track or in a straight line. Add that to the brand’s resale value, which remains excellent, and it’s hard to see the current Ferrari lineup as anything but a bunch of fairly-priced automobiles of known quality.

The problem becomes this: although the pricing is justified, it does draw the velvet rope in front of most potential buyers for the cars. It doesn’t really matter; as Mr. Cain points out, the one-percenters are just getting wealthier every day and Ferrari sales rise as prices do. Those of us who want to join the Scuderia at a modest rate will have to follow the lead of fictional characters or the aggressively self-made, and buy used.

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26 Comments on “Ferrari Pricing Heads For Orbit, Porsche Stays Grounded...”

  • avatar

    You could also defraud a bank, ship it to another country, crash it at an improbable speed, and have your henchmen pose as DHS (or the locality’s equivalent agency) agents and try to steal it back from the impound lot.

  • avatar

    So Ferraris are a Veblen good!

  • avatar

    It’s my very humble opinion that because Ferraris are far more collectible, being rarer since they are produced in far more limited volume (generally speaking) than Porsches, the price differential is the result more of a tidal wave of fiat currency that’s been printed by fractional reserve central banks encouraging those with means to invest in everything from fine wine to fine art to exotic automobiles (the likes of Ferrari’s more limited offerings as a good example).

    People with true means and a pessimistic view of paper fiat are ‘diversifying’ their assets and portfolios at an accelerating pace due to central bank monetary lunacy.

    So, I wouldn’t be surprised if a significant majority of the more sought after Ferraris are destined to be inspected thoroughly upon delivery, and then immediately sent into a sheltered, maybe tarped, climate controlled life of stillness.

    • 0 avatar

      I agree and I think there is currently a huge bubble in collector cars thanks to people trying to get yield any way they can in our ZIRP environment.

      Certain Ferrari models will always hold their value, but the prices being paid at Barrett-Jackson and Mecum for garden-variety muscle cars (not to mention one-off weirdos that nobody wanted even back then)is astounding.

      I honestly believe that there is a confluence of factors that will make prices plummet in the next 10-15 years: The fact that this is the Boomers’ last chance for their dream car so they are willing to pay whatever it takes to get it, the fact that after 65+, you don’t need a Boss 429 to go to the grocery store, especially if the money can better be spent to shore up retirement accounts or pay medical bills (not to mention that Grandma probably hates it anyway), the fact that most won’t even have a license after age 70, and the most important fact – Generation Why doesn’t want them and couldn’t turn a wrench if their lives depended on it, which means there is a limited market to sell to.

      Long story short, if you are in the market for a 50’s-70’s era classic, just wait a few years and buy them dirt cheap from estate sales. I’m certain 50 years from now there will be more “barn finds” of today’s thoroughly frame-off reconditioned and restored cars with less than 500 miles.

      • 0 avatar

        “Generation Why doesn’t want them and couldn’t turn a wrench if their lives depended on it, which means there is a limited market to sell to.”

        Not everyone in Generation Why is Eloi, but even us Morlocks grew up well after the 60s muscle car era was dead and buried, so why would we have nostalgia for any of them?

        Honestly, from the amount of people from your older generations who come on here and wax nostalgic about carburetors and complain at length about how it’s impossible to work on anything with computerized fuel injection and ignition (when us younger folks seem to have surprisingly few problems dealing with stuff like Power Commander and Megasquirt), I think the reality might be somewhat more complicated than the “Generation Why” meme might imply.

      • 0 avatar

        I’m 35, so I don’t know if that makes me one of the “people from your older generations”, as I have not received anything from the AARP yet.

        Also not sure where you are getting “wax nostalgic about carburetors and complain at length about how it’s impossible to work on anything with computerized fuel injection and ignition”. I have never even owned a carbureted car, and the one project car I did buy with it was swapped to fuel injection. I have taken several courses at EFI University and am certified for Accel DFI, so please take your faulty and unsubstantiated assumptions elsewhere.

        Stating that the “younger folks” (since I’m so old) don’t have trouble with MegaSquirt is laughable. Their 1980’s era frames-based website is only matched by their lack of decent documentation and thousands of unanswered questions on the forums. I have played with MS a lot, and it’s great for adding EFI to your 70’s Triumph or turbo Miata, but the resolution is too low and most people upgrade when they’re making over 500hp. It says something when people would rather spend $2000+ for a standalone (Fast, Motec, BS3, etc) then stick with MS. If Gen Why has such surprisingly few problems with it, then maybe they would like to either enlighten us old folks by sharing that knowledge or make a small fortune tuning cars. Of course, once they build the box, they are lost as to what to do next.

      • 0 avatar

        Direct injection is the new fuel injection. When carburetors were going away in favor of fuel injection, people said the same old crap — I’m going to buy the current year – 1 model because it still has a carburetor, fuel injectors will be impossible to work on in the futures and my car will last forever, etc. Same thing we hear about direct injection now from the Luddites.

      • 0 avatar

        No need to get offended, Dave. Just saying that the price bubble in ’60s muscle cars is going to pop whether or not the kids these days “couldn’t turn a wrench if their lives depended on it”, which, of course, we can, thank you very much.

      • 0 avatar

        Regardless as to the fairness or accuracy of the comments made about Generation Y, I am in absolute agreement with Dave504 in that there’s a huge bubble in the form of mis-priced (i.e. overpriced) assets, including vehicles considered as “collectable.”

        Unlike past bubbles, however, such as the bubble or the housing bubble, there are bubbly asset classes far and wide, from art to wine to all manner of commodities.

        These bubbles are a direct consequence of monetary policy whereby the lunatics have taken over the printing press asylums.

  • avatar

    The wealth of the Ferrari-purchasing bracket has been growing significantly faster than the rate of inflation, whereas the wealth of the bracket who can only afford Mustangs or Miatas has (to put it mildly) not.

  • avatar

    What is your deal with Estonians?

  • avatar

    After watching this, my next car will be a diesel, RWD, stick-shift wagon, AND have popup headlights.

  • avatar
    el scotto

    I’ve only looked at both marques, I like having cash in my bank accounts. Aren’t Ferrari’s ridiculously expensive to maintain over a Porsche? I knew a guy who had a Ferrari 308 and he said a new distributor cap was $750.

  • avatar

    To be honest, an entry level Ferrari is a Maserati, even if they don’t play in the same league and don’t do the same thing. It’s the Fiat groups way of commercializing Italian exoticness while keeping the Ferrari exclusivity. By keeping volumes low and demand high, Ferrari can exist comfortably in a space where they can do no wrong in their target market’s eyes. You’d be cross shopping the GT vs the 911 and the Quattroporte against the Panamera.

    This is probably the only way to make Maserati viable. If Ferrari had only maintained pace with Porsche in price and performance, I’m not sure the Maserati revival would have happened, it would be in an uncomfortable neither-nor space, too expensive for the mass market, too Italian to be reliable, but not fast enough to ward off the competition.

    • 0 avatar

      And Porsche’s true competitor to the 458 is the 911 GT2 RS which is actually a little more expensive (MSRP $245,000) than the Ferrari. Though the Turbos and GT3’s aren’t far off in performance.

      A standard 911 is no slouch either, of course, but not really in the same league. To run with Ferrari, you have to make a bigger investment.

      That’s just based on road-test numbers, naturally, which we all know are cooked a bit by Ferrari tuners. Real-world results are probably a little closer.

      Philosophically little has changed between the two. Ferrari is the rarer, more exotic breed while Porsche is a tad less expensive and more practical. While standard 911’s were more than a match for Ferrari 308’s and 328’s, Ferrari started leaving Porsche behind from the 348 onward. Only top-line Porsches can keep up, but most do still come in significantly cheaper.

  • avatar
    Robert Schwartz

    OK, I still can’t afford a Ferrari.

    Yes, they are status symbols. Didn’t we discuss mechanical watches a couple of weeks ago?

  • avatar

    You target the one percent with a car that has little real competition? And it’s somehow newsworthy that they are raising prices faster than Porsche? If anything, they aren’t raising prices fast enough.

  • avatar
    DC Bruce

    While the “one percent” is the latest sobr1quet for what used to be called “the rich,” digging a little deeper into the stats shows that the group you’re really talking about is the top 0.25%. It is the income growth of that group which has really taken off; the top 1%, not so much.

    All products except regulated utilities use market-based, not cost-based, pricing. Ferrari has successfully positioned itself at a market point where it has very little competition. Moreover, unlike a lot of semi-exotics (such as Porsches), Ferrari’s don’t depreciate like a stone after the first few years of ownership.

    I would venture a totally ignorant guess that the great bulk of Ferrari owners are not capable of exploiting the performance difference between those cars and the more expensive Porsches nor do they have access to a venue where this would even be possible for anyone but the hopelessly insance; but that’s clearly not the point. The point is that, except in a few isolated locales, you’re not going to see another Ferrari coming down the street.

    And so it makes perfect sense to kick in another 20% percent and get the Ferrari.

    • 0 avatar

      It’s not always clear that Ferraris are for the top 0.25%. This is an old link that I’ve posted on TTAC before, but the price/income ratio for Ferrari buyers doesn’t suggest that:

  • avatar

    Ferrari`s will always be out of reach for those that make less than a gazillion dollars a year.
    No new news there…

  • avatar

    Porsches has always been a little less exotic than Ferraris. Furthermore Ferrari’s used to be a risky, fragile choice compared to Porsche which was the “sensible” sports car. However modern Ferraris are probably more reliable than Porsches.
    However with the launch of the 914,924/944/968 first then the Boxter, Cayenne and Finally the Panamera it is clear that they were willing to sacrifice exclusivity for bigger profits (pre-VW subsidiary) for survival. Therefore they cannot command price escalations to match Ferrari, unless for low volume Hyper Halo cars.
    Also Porsche has scaled down it motorsport activity compared with the 60’s, 70’s and 80’s while Ferrari is in the forefront of F1 and GT series. This must add some value to the brand. That said Porsche is still a very profitable company although we’ll have to wait for the future to see if the thinner spreading of the brand will devalue it further.

    As someone said Fiat have Maserati (and Alfa Romeo – the 4C is in Boxter/Cayman territory) to play with Porsche.

    BTW the 465GT’s 4 -seat successors are the 612 and the FF not the F12 (as stated above) which is the successor of the 550 Maranello and the 599 Fiorano.

  • avatar

    A few comments:
    – I think it is spelled “paleozioc”, not palezoic (I know because I had to look up the word)
    – 24 mpg in a 993? You’re lighter-footed than I thought. I get about 18 mpg but that includes quite a bit of Autobahn driving.
    – excellent resale value? Have you checked prices on used 456 GTs?

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