Can you afford a new Ferrari?
Discussion
I was wondering about what type of people buy new Ferraris and how much one should be earning such that buying one doesn't really matter.
From a quick look at the classifieds it seems that most Ferraris depreciate a lot and most haven't been driven much such that a drop in value - taking an guestimate of £25'000 for 5000 miles - is around £5 a mile. Assuming an average speed when driven of (say) 50 mph gives a drop in value of £250 an hour. So if you earn £250 an hour (post tax) you are financing the car out of current earnings rather than savings. And £250 an hour post tax gives around £800'000 a year pre-tax. I wonder how far away that is for the actual, average income of those fortunate few buying new Ferraris.
Before anyone states the obvious - I know the approach above has more holes than Swiss cheese! But still...
From a quick look at the classifieds it seems that most Ferraris depreciate a lot and most haven't been driven much such that a drop in value - taking an guestimate of £25'000 for 5000 miles - is around £5 a mile. Assuming an average speed when driven of (say) 50 mph gives a drop in value of £250 an hour. So if you earn £250 an hour (post tax) you are financing the car out of current earnings rather than savings. And £250 an hour post tax gives around £800'000 a year pre-tax. I wonder how far away that is for the actual, average income of those fortunate few buying new Ferraris.
Before anyone states the obvious - I know the approach above has more holes than Swiss cheese! But still...
that's a ridiculous way to cost it imo. all you really need to take into account is:
purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
Somebody on a lot less could easly accumulate a large deposit on a car like that.
I earn above average, but not that much more. I could could have put a heafty deposit down on a ferarri, but i chose to buy a second property as an investment.
One of my mates earns over £200k per year, he has the disposable income to spend 30k on a kitchen, and 30k on AV kit. He could easily buy a ferrari, but he prefers porsche.
I earn above average, but not that much more. I could could have put a heafty deposit down on a ferarri, but i chose to buy a second property as an investment.
One of my mates earns over £200k per year, he has the disposable income to spend 30k on a kitchen, and 30k on AV kit. He could easily buy a ferrari, but he prefers porsche.
shirt said:
that's a ridiculous way to cost it imo. all you really need to take into account is:
purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
O/T, but I do like your axle stand cat in your profile.purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
shirt said:
that's a ridiculous way to cost it imo. all you really need to take into account is:
purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
Point I was trying get to get at is not how much cash you need to actually make the payments for the car but rather how much you needed to earn before buying a new Ferrari isn't going to make your poorer by reducing your net assets. Of course the banks are happy to lend or lease to people so they buy something that they can't really afford. But isn't that sort of thinking one of the reasons why lots of people (and it seems most governments) are currently in the s***?!purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
I know 2 people who have 'acquired' a new Ferrari. In both cases it's a California, and in both cases it has been financed as a Business Asset rather than a personal one. I would say in both cases their personal income is over £300k/year.
I run my own Limited Co but a brand new £200k car is way too expensive an asset, especially given that it can only depreciate and cannot be used for anything else, unlike residential or commercial property.
To buy a new Ferrari and not worry about it or notice a drop in personal living standards, I think you either have to have huge assets (double figures millions) or personal gross income of over £1m/year.
I run my own Limited Co but a brand new £200k car is way too expensive an asset, especially given that it can only depreciate and cannot be used for anything else, unlike residential or commercial property.
To buy a new Ferrari and not worry about it or notice a drop in personal living standards, I think you either have to have huge assets (double figures millions) or personal gross income of over £1m/year.
bqf said:
To buy a new Ferrari and not worry about it or notice a drop in personal living standards, I think you either have to have huge assets (double figures millions) or personal gross income of over £1m/year.
What?? You need nowhere near the £800k originally mentioned let alone £1m. You aren't talking about a £200k car every single year that then evaporates to nothing at the end of 12 months. You are talking about a 200k car which at the end of 3 years is say worth (low ball) £100k. So in reality you are asking the question how much do you have to earn to spend £35k a year on cars. I can tell you it isn't £800k.People's situations are vastely different. The rent on a Ferrari F458 lease is probably around the £2500 mark, so £40k a year is required just to rent the thing, before fuel and insurance. £60k would therefor be doable if you lived with Mum and Dad, didn't have a social life etc.
f
k that though
f
k that thoughhttp://www.oraclefinance.co.uk/california/
oracle finance have plenty of "affordable" finance packages
oracle finance have plenty of "affordable" finance packages
Schnellmann said:
shirt said:
that's a ridiculous way to cost it imo. all you really need to take into account is:
purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
Point I was trying get to get at is not how much cash you need to actually make the payments for the car but rather how much you needed to earn before buying a new Ferrari isn't going to make your poorer by reducing your net assets. purchase price [outright or financed]
servicing
running costs [tax/insurance/fuel]
if you happen to have just had a £200k windfall then it's easier to purchase. the retained value of the car after depreciation is rather a moot point if you can afford the monthly/annual outgoings.
for me, i actually could go buy a new ferrari this afternoon. however this is due to the banking regs here as i could ask for a loan of 20times my salary and they'd likely give it to me. whether i could afford the repayments on that is an entirely seperate matter!
Gassing Station | General Gassing | Top of Page | What's New | My Stuff