My Very Own Ferrari
From the Print Edition:
Rush Limbaugh, Spring 94
The dreamer, a teenage recidivist, was just fulfilling a lifelong dream. He had enjoyed a good year financially in 1984, and 1985 was looking even better. Tom Blanchard, we'll call him, was 42 at the time, and he had been an automotive enthusiast since he read his first Road & Track. He always had something interesting in his garage, but he had never owned every enthusiast's dream: a Ferrari. Red, of course, with a 12-cylinder engine. So, with one good year in the bank and the promise of more of the same, our dreamer sets out on his quest.
The search takes awhile. There isn't a Ferrari store in every town. But Tom finally finds his dream car: a 1966 275 GTB 4, in good shape, for $75,000. Driving it home he revels in the rich leather, the array of gauges, the awsome power of that V-12. Ferrari street cars are direct descendants, sometimes first cousins, of Ferrari race cars, and the GTB 4 in Tom's hands is a prime example. The 3.3-liter engine produces 300 horsepower at 8,000 rpm, the suspension is firm--most American drivers would call it stiff--and the car's cornering is flat, solid and sure-footed.
When Tom drops the thin, upright shift lever into a lower gear and gives the V-12 full throttle, the car leaps forward, and the noise level increases in tandem with the tachometer needle's climb. He feels the G-forces at work on his backside as he slices around a tight right. This, Tom says to himself, is what owning a Ferrari is all about, unaware that he's going to learn that owning a Ferrari means more than driving pleasure. Tom has bought a seat on the big, red roller coaster.
In 1984, used Ferraris were generally bought and sold by and to enthusiasts--men, primarily--who enjoyed the cars built by the famous Enzo "the Commendatóre" Ferrari, for their history, their beauty and the thrill of driving the acknowledged thoroughbred of the automobile world. When Ferraris changed hands, the seller usually made some money, which meant that older Ferraris were gradually appreciating, but no one was frantically buying and selling. It was, above all, a gentleman's pastime.
But about the time Tom parked his prize for the first time, something happened. Some unrelated forces dramatically changed the Ferrari scene. An automotive feeding frenzy was about to begin. In early 1985, when Tom bought his car, he drove it occasionally, washed it regularly, enjoyed it thoroughly and certainly had no thoughts about selling it. However, by mid-1986, he noticed similar cars being advertised for $150,000 in the buff books. He started paying attention. By the middle of the next year, GTB 4's were bringing $300,000. Tom didn't take his out into traffic as often as he used to. When, in 1988, GTB 4's were selling for $600,000, his stayed in the garage, under its car cover. When a GTB 4 sold for $1,250,000 in 1989, Tom began planning his early retirement. It seemed the craziness would never end.
But it did. And quickly. If we have Tom selling his car in 1989, we leave him a happy man. If, on the other hand, he kept it in the hope of making more, he saw the value of his car plummet from that $1.25 mil high to maybe $300,000, more likely $275,000 today. Still, if he could have found a buyer, he would have made a handsome profit. The "loss" was on paper. But what about the last guy on the ladder? The one who paid $1.25 mil? That's a serious ouch.
If you've always wanted a classic Ferrari, the experts agree that it is a good time to buy. But buy it because you want it, not because you think you can get in on a rising market. The Ferrari rush is over and not likely to happen again. The GTB 4 is a good example because of its reasonable 1984 price. If Tom had been a wealthy man, he could have bought a 1961 250 GTO that year for about $700,000. (Only 39 GTOs were built, so they have long been among the most expensive Ferraris.) At the peak of the frenzy, a GTO sold for a reported $15 million. Today, that same car is worth perhaps $3 million to $3.5 million.
That was the Ferrari roller coaster. What in the Commendatóre's name caused the greatest run-up of prices and subsequent drop in automotive history? Mike Sheehan, who operates European Auto Sales in Costa Mesa, California, thinks he knows how it started.
"Baby boomers went to college in 1965, and we all read Road & Track and Car and Driver; we all [read about] the Ferrari Luso and the LM and the GTB 4," Sheehan says. "And right next to the road test of the GTB 4 was the fold-out of Miss October. Our dream was to have a hot lap in that GTB 4 with Miss October. Of course we didn't have the cash for more than a pizza at the time, but we went on to become doctors and lawyers and stockbrokers and successful businessmen, and suddenly it's 1984; we're having midlife crises and everyone starts to fulfill his fantasies. At least the car part. We had too many boomers with too many midlife crises in too good of an economy chasing too few cars. It simply got out of control."
That's as good an explanation of how it all started as you'll come across. But what drove this group of midlifers to compete for a small number of cars made those purchases, well, pure. They were enthusiasts buying Ferraris--and Lamborghinis and Maseratis and other exotica as well--because they wanted the cars as cars.
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