The State Of The Economy And The Pre-Owned Ferrari Market
Adam Merlin February 2020
Does the volatility of the stock market affect the prices of exotic and collectible automobiles? This is an interesting question because many people believe the stock market is an indication of the state of the economy and that luxury goods and specifically investible, used Ferraris are affected by this. So, does a surge in the economy increase the prices in the used Ferrari market? No, and the reason is simple economics, supply and demand.
Supply and demand, there is a much smaller supply of collectible, used Ferraris than there is a demand for them. There are many more billionaires that are in the market for these rare, investible Ferraris and, because there is such a limited supply, when one comes on the market, price is not factored in in relation to the economy. In fact, price is often not considered and people will pay whatever to obtain a specific Ferrari. Unique Ferraris that are recession-proof pertain to scarcer models or features. A Dino or GTO are both great examples of vehicles that will always be highly desired. A manual transmission is an example of a feature that is becoming more and more sought after as there are fewer of them in the market. I recall a few years ago I came across a manual transmission Ferrari that had just been listed for sale that I was very interested in. I had to return a client call and took the five minutes to do so before calling the guy selling his Ferrari. In five short minutes, the car was sold and the seller mentioned he had already received 6 other inquiries.
While the economy does not affect the prices of these rare Ferraris, the state of the economy does affect what investors are doing. Specifically, over the last few years, we have encountered more and more people who are looking to invest in the used Ferrari market, especially during volatile times. The prices of these exotic automobiles will appreciate and there will always be a market for them. This alternative investment option seems to be of greater interest lately, as we are being asked more frequently to help with growing collections.
If you are a Ferrari lover, this will be of no shock. However, if you have some money to invest and you appreciate Ferraris or other exotics, this is a great investment option that has been well proven. These collectible cars are not just the million-dollar Dinos either, there are many options on the market that you can safely invest in for under $100,000. And, let’s be honest, what can be more fun to invest in than a Ferrari!