Buying a Ferrari as an investment – the good and bad

Ferraris are unique in the automotive industry for their ability to hold their value over time and, in some cases, appreciate in value. However, it is not always a good investment.

Many Ferrari owners tell tales of making large amounts of money from buying a Ferrari but these cases are few and far between.

While specific Ferrari models provide outstanding returns, the majority merely lose their value at a slower rate than other cars. 

The market for classic cars blows hot and cold depending on prevailing economic conditions. It makes investments in cars a risky endeavour.

If you pick a winner, like a Ferrari from the 1960s and 1970s, you can make big money. These cars regularly fetch six or seven figures at auctions.

The most famous example is that of the 1963 Tour de France-winning Ferrari 250 GTO, which sold for $80 million in 2018. The 250 GTO cost buyers in 1963 $18,000, which, adjusted for inflation, is $176,000 today. 

This car exemplifies many of the characteristics which make a car collectable and, thus, a good investment. 

For a car to be a good investment, it needs to have certain characteristics and, to be really valuable, a combination of them:

• Historical importance.
• Limited production numbers.
• Racing pedigree either from winning races itself or associated with an era of Ferrari dominance in Formula 1.
• Previous celebrity ownership, particularly from those known to collect cars.
• Unique features or technology.
• Low mileage and minimal wear.

Another important factor to consider is that it will not be cheap. If a Ferrari is cheap on the second-hand market, it’s for a reason. 

The cost of purchasing a classic Ferrari is not the only thing to consider when making such an investment.

As a Ferrari collector said to GQ, “if you buy a Ferrari as an investment, you have to invest in it”. For it to sell for a substantial profit, it has to be perfect and preferably have original parts and specifications. 

Repairing and maintaining a classic Ferrari can cost upwards of a million dollars, excluding insurance payments and storage. 

This becomes particularly costly when considering the long-term horizon of an investment of this nature. It is highly unlikely that a car will rapidly appreciate in value. It often takes decades. 

While it is rare for a Ferrari to depreciate in value substantially, they do depreciate, and there are cases where the values of certain models have more than halved over the decades. 

One example is the Ferrari 400i which could have been purchased in 1982 for anywhere between $45,000 and $62,500. Adjusted for inflation, that would set you back between $136,000 and $160,000 today. 

While the 400i was unique in having a fuel injection system and being automatic, it was notoriously heavy and hard to handle. 

Many describe it as not “feeling like a Ferrari” and lacking racing pedigree or any celebrity associations. 

A 400i sells today for an average price of $44,000, which, when adjusted for inflation, is a disastrous return on investment. 

Recently, the collectable car market has become increasingly formalised, with indices and other financial instruments taking over private and public auctions.  

The Historical Automobile Group International (HAGI) created an index in 2008 that tracks the value of collectable vintage cars from manufacturers such as Porsche, Ferrari, Bugatti, and Alfa Romeo, among others. 

The HAGI index has appreciated by 264.49% since its inception in 2008, even sustaining its positive momentum throughout the COVID pandemic. 

Investing in cars remains more art than science, with the value being largely subjective and the determining characteristics of a collectable car individually defined.