Dollar value of a car, and when does it get funny......

[trimacar]

Wow. A car sold for 27 plus million.

It's hard for us common folk to even think about this.

I've agonized over 10 or 15 thousand, and will honestly say that the most I've ever spent for a car hasn't exceeded mid 5 figures....so, again, how do you even think about spending this much for one car.....

Guess if you have enough money, it's nothing...just think, Bill Gates, worth billions and billions, a million to him would be like a hundred dollar bill to us...now, that's just a quick analogy, someone might do the math...

1967 Ferrari sells for 27.5 million dollars - MSN Autos

[ply33]

. . . Guess if you have enough money, it's nothing...just think, Bill Gates, worth billions and billions, a million to him would be like a hundred dollar bill to us...now, that's just a quick analogy, someone might do the math...

Seems like all the information for that is hedged with estimates one way or another and getting data for one year versus some data for one year for one thing and a different year for another. But given all that a "back of the napkin" level of math estimation can be made.

1. Census has tables on wealth at Wealth and Asset Ownership - People and Households - U.S. Census Bureau and we can look at the spreadsheet for 2011 labeled "Net Worth and Asset Ownership of Households: 2011"

2. Forbes lists wealthy people at The Richest People in America List - Forbes Not sure what year that is for or their method of getting numbers

So, to be in the top 100 for wealth in the US you'll need about $3.9 Billion

If you are a median non-hispanic white person with no college you'll have about $110K net worth including the equity in your house. A bit more if your are older a lot less if you are younger.

If that is the comparison you are looking for, then the multiple is 35455 to 1 and $1M to someone in the wealthiest 100 in the US is worth about the same as $28 to the "average Joe". So that '67 Ferrari purchase would have the equivalent of less than $1000 for the "average Joe".

Those numbers can be sliced and diced a gazillion ways to give almost whatever answer you want (age, education, geographical, etc.) so this should be taken as for idle amusement only.

[Bhigdog]

The best part is the buyer probably will drive it a few times, tire of it, and it will languish or be resold. Then on to the next extravagant toy to impress his circle. All the while wodering what he can buy that will make him truly happy............Bob

[trimacar]

Drive it? I'd bet a dollar to a doughnut that the new buyer never even SITS in it...Jay Leno excluded .....

[Bhigdog]

Drive it? I'd bet a dollar to a doughnut that the new buyer never even SITS in it...Jay Leno excluded .....

I would not at all be surprised..........................Bob

[Dave@Moon]

....so, again, how do you even think about spending this much for one car.....

Not to disparage anyone of means, but for the most part I'd say it's just for the entertainment value. Many things are traded for values that are simply not intrinsic to the item (art, ephemera, manuscripts, cancelled stamps, etc.), and not just "things".

Without taking ANY political side in the point I'm about to make, many people were baffled early last year when Sheldon Adelson donated over $10 million to an already faltering and obviously hopeless candidate in one of the Presidential primaries last year. People professed to be mystified at spending that kind of coin for a genuinely hopeless cause that was bound to fail (and did, spectacularly). Then one of the shows I watched analyzed what $10 million was to man of Sheldon Adelson's means. It happened to be exactly the percentage of his wealth and income that an average American person making $50,000/yr. would spend on a good dinner and movie for 2. In all likelihood he was just enjoying the show.

Those of us that have $5000 or $50,000 cars that we are extremely proud of and spend an inordinate amount of time on are no different in scale than Jay Leno, J.B. Nethercutt, or anyone else who appreciates these cars. I suppose if you or I were a person for whom $10 million is equivalent of a night at Ruth's Chris Steakhouse and the Showcase Cinema, a $27 million car would have to sound like a relative bargain.

[cahartley]

The pleasure of BEING totally loaded is they DON'T have to think about spending that much money........

I venture to say most of us "commoners" spend comparatively more for our toys than the obscenely rich.......I know I have.

The other side of the coin is maybe, just maybe, us commoners enjoy our hard earned toys to a greater degree?

[avgwarhawk]

The best part is the buyer probably will drive it a few times, tire of it, and it will languish or be resold. Then on to the next extravagant toy to impress his circle. All the while wodering what he can buy that will make him truly happy............Bob

Money can't buy happiness. But it can a hell of a lot of other things.

[trimacar]

Or, Chris, money can't buy happiness, but it sure can make the misery more enjoyable.....

And Cahartly, you're correct, as a percentage of total net worth, most of us spend a higher amount than what the cost of that Ferrari was to the new owner...

[Bhigdog]

One thing over looked in this discussion is the "lack of desire" the truly filthy rich must suffer. Imagine how utterly boring life must be if you could easily buy anything you wanted. Imagine not having any thing to strive, work, scheme, save and lust after and the pleasure received when it's finally attained. Something as simple as a nice nite out at Ruth's Chris Steak House could easily give an average person more pleasure than the 35 mil car to whomever bought it................Bob

[alsancle]

There is a scale with two end points. The high school kid who works all summer to pull together 1k to buy his beat up rust bucket dream car is at one end. The billionaire buying a 25 million dollar car is at the other end. The kid has 100% of his net work tied up in the car. I would no more cast aspersions on him or question his motives or desires then I would the billionaire. Everyone on this board falls somewhere between the two end points and we all have one common trait which is a love of cars.

Edited August 19, 2013 by alsancle
spelling! (see edit history)

[trimacar]

My intent was not to criticize anyone based on the amount of money they have, I agree that we all love the cars. Some people may love them more as art, objects to brag about, or other reasons besides the "going back in time antique", but it is a common thread of collecting.

I'm just constantly amazed at some of the high prices of an assemblage of metal, leather, and rubber. It apparently was worth the millions to someone, but just think what that kind of money can buy, and then compare those things (whether it be real estate, art, a wing for a hospital) with the red metal thing, and it makes one think.

That was the purpose of the original thread, not criticism....

[stexch]

The current owner inherited the car from his father. He said that his dad took great joy in frequently driving the car prior to his passing. The current owner said he received a number of speeding ticket behind the wheel when he was a teen. The proceeds of the sale are going to be donated to charity. When asked how his father would feel about selling the car, the seller said that his dad would be pleased that so many lives would benefit from the funds. I believe it was on CBS.

[Steve Moskowitz]

While there may be some people out there who buy the ultra expensive cars just because they can, they are really NOT the norm from what I have seen. I have met many of these people or know their restorers or know of them from other friends. Most of these cars are in fact true car guys and appreciate these amazing rare works of arts. They even get out an drive some of the multi-million dollar cars on a regular basis (something that would have me shaking in my boots). The majority seem pretty down to earth and can talk with a bum like me with cars being the common denominator. The seller of this particular car is using ALL the money to fund charities! That is wonderful. Hopefully the buyer will follow the wishes of the seller and not tuck the car away. There were many more cars sold this past weekend I would have preferred to have in my garage but I am not a Ferrari aficionado..although an f50 would be nice!

[Guest Magoo]

Obituary for Eddie Smith, Sr, who owned the NART Spyder from new and died in 2007 at age 88:

Eddie Smith dies at 88 | The-Dispatch.com

Older bio of the (reported) new owner, Lawrence Stroll. Since this was written he became a billionaire.

Who is Lawrence Stroll?

[Bhigdog]

While there may be some people out there who buy the ultra expensive cars just because they can, they are really NOT the norm from what I have seen. I have met many of these people or know their restorers or know of them from other friends. Most of these cars are in fact true car guys and appreciate these amazing rare works of arts. They even get out an drive some of the multi-million dollar cars on a regular basis (something that would have me shaking in my boots). The majority seem pretty down to earth and can talk with a bum like me with cars being the common denominator. The seller of this particular car is using ALL the money to fund charities! That is wonderful. Hopefully the buyer will follow the wishes of the seller and not tuck the car away. There were many more cars sold this past weekend I would have preferred to have in my garage but I am not a Ferrari aficionado..although an f50 would be nice!

Not being part of that rarified scene that's nice to know. .....................Bob

[cahartley]

just think what that kind of money can buy, and then compare those things (whether it be real estate, art, a wing for a hospital) with the red metal thing, and it makes one think.

You and I both trimacar!.......

[Rusty_OToole]

Not to disparage anyone of means, but for the most part I'd say it's just for the entertainment value. Many things are traded for values that are simply not intrinsic to the item (art, ephemera, manuscripts, cancelled stamps, etc.), and not just "things".

Without taking ANY political side in the point I'm about to make, many people were baffled early last year when Sheldon Adelson donated over $10 million to an already faltering and obviously hopeless candidate in one of the Presidential primaries last year. People professed to be mystified at spending that kind of coin for a genuinely hopeless cause that was bound to fail (and did, spectacularly). Then one of the shows I watched analyzed what $10 million was to man of Sheldon Adelson's means. It happened to be exactly the percentage of his wealth and income that an average American person making $50,000/yr. would spend on a good dinner and movie for 2. In all likelihood he was just enjoying the show.

Those of us that have $5000 or $50,000 cars that we are extremely proud of and spend an inordinate amount of time on are no different in scale than Jay Leno, J.B. Nethercutt, or anyone else who appreciates these cars. I suppose if you or I were a person for whom $10 million is equivalent of a night at Ruth's Chris Steakhouse and the Showcase Cinema, a $27 million car would have to sound like a relative bargain.

What do you want to bet every politician in America has heard this story? And if Adelson calls he will pick up the phone right away thinking "Geez if he gave $10 mil to that loser....."

Furthermore some of you are talking as if the buyer has blown $27 million on a car. Not hardly. If he keeps it in good shape what do you suppose it will be worth 10 years from now? My guess is, a lot more than $27 million, and probably more than $27 million in government bonds @ 1.75%.

[Dandy Dave]

What is any of this old iron worth at any givin time in the real world market. The answer is the the price of scrap. Now, when we put it up for auction it is what ever two buyers will pay..... If that is about a charity, and the charity is well reconized, it may not be about the car as much as you think. It may be more about helping the charity and carrying home a token in doing so. Dandy Dave!

[Dave@Moon]

The current owner inherited the car from his father. He said that his dad took great joy in frequently driving the car prior to his passing. The current owner said he received a number of speeding ticket behind the wheel when he was a teen. The proceeds of the sale are going to be donated to charity. When asked how his father would feel about selling the car, the seller said that his dad would be pleased that so many lives would benefit from the funds. I believe it was on CBS.

Awesome! :cool:

[Matt Harwood]

Car values at the very top end have exploded almost in lockstep with the explosion of wealth at the very top end. The top 1% are buying the top 1% of cars, it's that simple. The fellow who bought this car surely wasn't deciding between this Ferrari and sending his kids to college.

To look at cars like this and their prices as well as their place in the collector car world, you have to realize that these guys can afford it, and understand that this may be their only chance ever to own that particular car. Cars like this Ferrari don't change hands often, and with bulletproof provenance, it's probably a solid investment even at that price. However, I doubt it was purchased as an investment; I'm quite certain it was purchased to fit in a collection that already has a 250 GTO in it, a 250 California Spyder, and probably one each of the F40, F50 and Enzo, plus dozens of others, so this was certainly the missing piece. Hell, Steve McQueen tried to buy this very car and was turned away! This is a very important Ferrari, not just a garden-variety piece that some whackjob overpaid to to own simply to demonstrate his wealth. We can look from the sidelines and be amazed, puzzled, and even saddened, but for buyers at this level, even if it's 10% of the guy's net worth (unlikely), he definitely wasn't reaching to pay for it and he obviously fought off a number of other eager bidders, even at that level. I was there, and the bids were initially ratcheting up in $1 million increments, then half-millions, then hundred-thousand chunks. Zounds!

Interestingly, I know a guy who tried to buy this very car recently and offered a still-staggering $14.5 million to own it before the auction started. The OPENING BID was $16 million...

Edited August 20, 2013 by Matt Harwood (see edit history)

[Matt Harwood]

One thing over looked in this discussion is the "lack of desire" the truly filthy rich must suffer. Imagine how utterly boring life must be if you could easily buy anything you wanted. Imagine not having any thing to strive, work, scheme, save and lust after and the pleasure received when it's finally attained. Something as simple as a nice nite out at Ruth's Chris Steak House could easily give an average person more pleasure than the 35 mil car to whomever bought it................Bob

This is a good point, Bob. I think that chasing something virtually unobtainable is how many of these guys generate that thrill, which would certainly explain many of these prices. Cars like this often CANNOT be bought, no matter how much money you have. In essence, it's the ONE THING your money can't buy, so you pursue it with zeal and when it becomes available, you not only have the thrill of the hunt, but the thrill of taking a bit of a risk. Auction fever is real, even at $27 million. Maybe ESPECIALLY at $27 million.

[stexch]

Furthermore some of you are talking as if the buyer has blown $27 million on a car. Not hardly. If he keeps it in good shape what do you suppose it will be worth 10 years from now? My guess is, a lot more than $27 million, and probably more than $27 million in government bonds @ 1.75%.

Assuming that any collectible can only go up in value is very dangerous. Just look at what top-tier hemi-powered muscle cars were bringing ten years ago and where they are now. While it is true that the most desirable model from one of the most desirable manufacturers will always have value, it is conceivable that the value in ten years could be half what was paid last weekend. As I recall there was a bubble in Ferrari prices in the '80's when Japanese buyers were competing with each other. I'm not saying it will happen, I just get very nervous anytime someone suggests that a collector car is as good as or better than a government bond in terms of guaranteed return.

[Scooter Guy]

Just last month, a 1954 Mercedes F1 car with documentation sold at Goodwood for more than $29 million. Apparently this is highest price ever paid at auction for a car. There are many articles and discussions of that car online which you can look up if you're interested.

That said, there have been rumors for years of private transactions in which $30M + is paid for the best of the best cars in the world. For the extremely high end cars like that, private sales are typical and the details of the transaction are never made public (not that they should be, mind you), so the rest of us will never really know what's going on and how much was paid for any given car.

[West Peterson]

Assuming that any collectible can only go up in value is very dangerous. Just look at what top-tier hemi-powered muscle cars were bringing ten years ago and where they are now. While it is true that the most desirable model from one of the most desirable manufacturers will always have value, it is conceivable that the value in ten years could be half what was paid last weekend. As I recall there was a bubble in Ferrari prices in the '80's when Japanese buyers were competing with each other. I'm not saying it will happen, I just get very nervous anytime someone suggests that a collector car is as good as or better than a government bond in terms of guaranteed return.

You are correct. GTO Ferrari's (the originals) were fetching as high as $15 million then. One year later, they were back down to $4 million.

[Graham Man]

I am guessing Ferrari would be happy to build you a new one for less the 27 million?

[John_S_in_Penna]

Whether a billionaire businessman buys a supercharged Duesenberg,

or a factory worker buys a 4-door Corvair, it's really all the same thing.

True satisfaction in the hobby comes from friends, family, appreciating

history, and sharing the experience with others.

When you're enjoying an AACA tour with friends, you forget about

what its book value is or whether there's a flaw in the chrome somewhere.

On a sunny day, on a winding road, appreciating the scenery, friends

will likely enjoy the ride in the Corvair just as much as in the Duesenberg.

The wealthy man REALLY is no happier than anyone else.

Contentment is not in content.

Edited August 25, 2013 by John_S_in_Penna (see edit history)