Ferrari Mailing List: Re: Beating the system....

[Erik Nielsen (judge4re]

Cost of capital is important for everyone, its the only way to really value money.  If you run a discounted cash flow, almost all car purchases are loosers.  The headaches and experieces from an emotional standpoint are more or less the same at any buy-in point, so why bother tying up scarce resources in a non performing asset?

 

Of course no one really wants you to run the numbers, dealers make their money when you buy or sell.  And they make more when you spend more.  I'm going back to looking at Italian bonds at a 7% return, less risky than a 512TR, sorry Clyde...

 

On Wed, Nov 9, 2011 at 9:34 AM, <Britt2Asa [at] aol.com> wrote:

Well here in the UK interest rates have been .05% for a few years. I believe the deposit is 20-25k. I know one guy put down his deposit just under 2 years early.

 

Haven't a clue to their cost of capital, for these guys it wasn't important.

 

BR in the UK
1986 328GTS (LHD 89,940km) Died August 19, 2006 Shrewsbury UK
1980 400i (RHD 74,000 miles)
Searching for the right 512TR
1997 Fiat Barchetta
1985 Bertone X1/9
2003 BMW 530d
1991 Alfa Spider S4 LHD
1993 Alfa Spider S4 LHD
2010 BMW 320d

 

In a message dated 08/11/2011 23:37:44 GMT Standard Time, judge4re [at] gmail.com writes:

So how much of a deposit did they need to put down?  Holding time
before they flipped?  Their cost of capital?  25k may not actually be
breaking even...

On 11/8/11, Britt2Asa [at] aol.com <Britt2Asa [at] aol.com> wrote:
>
> I have friends here in the FOC that do this with the 458. One of the guys
> in my area group took delivery of a  458 last September and another this
> August with a Spider on the way. Sold the first car for 25k profit. Plans to
>
> flip the second when the Spider comes in.
>
> I also know a guy well who did this with the 430 and lost his ass on the
> car because the demand wasn't there.
>
> So, it works if the car is HOT but if it isn't you are tanked. Thing is,
> these guys ordered the cars  3 years ago and got the first ones, they
> didn't
> even know what it would look like when they paid the deposit. If Ferrari
> comes out with a 458 than Cha ching! If its a minger than you lose.
>
> that's the view in the UK anyway.....
>
> Britt
>
>
> BR in the  UK
> 1986 328GTS (LHD 89,940km) Died August 19, 2006 Shrewsbury UK
> 1980 400i  (RHD 74,000 miles)
> Searching for the right 512TR
> 1997 Fiat  Barchetta
> 1985 Bertone X1/9
> 2003 BMW 530d
> 1991 Alfa Spider S4  LHD
> 1993 Alfa Spider S4 LHD
> 2010 BMW 320d
>
>
> In a message dated 08/11/2011 01:31:37 GMT Standard Time,
> fellippe.galletta [at] gmail.com writes:
>
> Clyde's  comments on Ferrari pricing eventually tanking, illustrates what
> happens when  you buy early to mid cycle, hold onto a car forever and then
> have little  equity to show for it down the road.
>
> Apparently there are two ways to  beat this system:
>
> a) Buy fully depreciated cars
>
> This one is  obvious.
>
> One that is not so obvious is:
>
> b) Buy brand new and  flip every 1.5-2 years:
>
> The caveat though is you have to have an in to  buy at MSRP. The resale
> market will reimburse your "depreciation" when you're  ready to move it.
>
> >From what I see, if you're one of the esteemed who  can do so, then you can
> essentially drive a new F every few years for very  little.
>
> Given the massive depreciation on new Ferraris, Lambos, it's  hard to
> rationalize a brand new purchase unless you are making mega money --  I'd
> estimate a true Ferrari/Lamborghini "client" is making at least $2-3
> million a
> year if not more. Whatever income/wealth point allows you to flush  $200k
> every
> few years without blinking an eye....that's the sweet spot for  buying
> brand new, for *1* car, LOL.
>
> But this flipping thing is  interesting. You may have to subsidize the
> dealer on your first purchase, but  afterwards you're good to go the rest of
> the
> way. You flip "new s***", and on  the side you buy and own the legends that
> are more or less depreciated and  worth keeping......Flat 12s, Diablos,
> Esprits, the right 911s, reasonable  muscle cars, etc.
>
> What do you guys think? I believe this is happening,  unless certain people
> are lying.  ;-)
>
> FG
>
>
>
>
> _________________________________________________________________
> To  unsubscribe or modify your subscription options, please  visit:
> http://lists.ferrarilist.com/mailman/options/ferrari/britt2asa%40aol.com
>
> Sponsored  by BooyahMedia.com
> and F1  Headlines
> http://www.F1Headlines.com/
>
>
>