When Enzo Ferrari, the 90-year-old racing impresario, died at his home in Modena, Italy, in August 1988, the same question crossed the minds of car buffs the world over: What effect would il Commendatore's death have on the prices of the legendary cars that bear his name? For the past several years, as word spread that Ferrari was growing frailer, the cars had been appreciating about as quickly as it takes a Testarossa to go from 0 to 180 mph. Most observers believed that the climb would accelerate once the cars' abrasive and eccentric creator died, because only the cars made before his death could be considered "pure" Ferraris. So in the year and a half before the old man died, speculators kept bidding up the prices of his cars.
Such is the auto world today. The stock of many different cars has been soaring as collecting has become a popular hedge against volatile equities markets. Seasoned Aston Martins, Lamborghinis and Maseratis are among the hottest, and costliest, makes today. But no postwar make, no matter how fancy or fast, has matched the remarkable sprint up the price ladder that Ferraris have taken. Says David Brownell, editor of Hemmings Motor News, which caters to car collectors and runs almost 800 pages of classified ads per month, "The action in Ferraris has gotten so fast that you need a ticker tape to keep track."
Indeed, car collectors gasped five days after Ferrari's death, when auctioneer Rick Cole sold a 1963 Ferrari 250 P for a then public-auction record $2.7 million in Pebble Beach, Calif. Since that sale, records continue to be set. The most recent high was reached this summer, when a 1963 250 GTO, one of only 36 such vehicles ever made, fetched a reported $11 million in a private sale to an anonymous buyer. The Ferrari frenzy is such that even the new cars, of which there are 4,000 each year, appreciate the minute they hit a dealer's showroom floor. While at one time only the 12-cylinder race-bred models weakened the knees of Ferrarophiles, some of the sixes and eights are attracting a good deal of interest. People seem willing to do almost anything to own a Ferrari, even if it means making do with those less powerful but more affordable alternatives. Jack Cowell, a managing director for a Manhattan investment banking house and a former Ferrari owner, says, "Ferraris are no longer perceived by the market as just autos. They are now rolling art."
Unfortunately, the automobile buffs who enjoyed driving Enzo Ferrari's magnificent creations are being elbowed out of the market by the new breed of owner—the deep-pocketed investor who doesn't know a crankshaft from brake calipers but can quote you the latest record-breaking prices. Even the true Ferrari lover who can resist the temptation to peddle his car for a big profit dares not drive the car on the street because of huge insurance premiums: It's tough enough to prang a car you love, but how can you justify risking a multimillion-dollar objet d'art on a trip to pick up a quart of milk? Insurance premiums run as high as 10% of the value of the car, and they sometimes come with restrictions, such as no racing and even no driving, period.
"You see fewer and fewer of the classic Ferraris on the road," says Michael Sheehan, owner of European Auto Sales and European Auto Restoration in Costa Mesa, Calif., and a Ferrari racer as well. Says Thomas W. Barrett III, a Scottsdale, Ariz., car collector and dealer, "Nine of 10 Ferraris sold in this market won't be driven anymore."
That development especially dismays the purists. "Turning a Ferrari into a car strictly for display purposes really hurts," says Gerald Roush, editor and publisher of the
Ferrari Market Letter. "When you do that, you are admiring the bodywork, which Ferrari usually had done outside the company. Ferrari built the engine, the gearbox and the chassis. The real way to appreciate this car is to drive it."
There is no shortage of opportunities to do just that—provided you are willing to pay for the privilege and are willing to take the risks. Vintage car races have become increasingly popular. They can vary from casual spins around a race circuit to reenactments of famous races, such as the Mille Miglia in Italy, to real fender-banging races. Whatever the format, vintage car races provide enthusiasts with an opportunity to meet one another, admire one another's vehicles and, most of all, drive their cars as hard as they dare.
Yet Ferrari owners feel they can't win. It's not just that they think their cars are too pricey to trade paint with mere Jags and 'Vettes. Sheehan points to another reason. "The Ferraris aren't at many vintage races because they are getting beaten. It's considered bad form to upgrade a million-dollar Ferrari, and it would decrease its value if you did, whereas everyone else is upgrading their vintage cars with contemporary racing technology. As a result, the Ferraris just can't compete."
Stanley Novak, a former Ferrari dealership manager who has owned a dozen Ferraris in the past 30 years, says the few he sees at vintage races are lower-priced versions, not the expensive classic racers. "I know of only one million-dollar Ferrari that is still racing," says Novak. "It became so costly that to keep racing, some guys went out and bought newer Ferraris that were not worth nearly as much as their old ones."
In short, it's gotten so that Ferrari owners can't have fun with their autos. "Fewer and fewer of the true enthusiasts can afford the car anymore," says Roush. "The people who have been coming into the market lately are doing so not because they love Ferraris but because they love making money."