Skeets Dunn, a San Diego municipal bonds dealer, has invested in a transportation commodity usually tied to instant depreciation and limited futures.
He bought a new car. Without a factory cash back.
He also waited three years and paid $400,000 for a two-seater that comes without carpets, spare tire, radio or safe hands willing to insure it.
This car does 12 miles per gallon in city traffic and 200 m.p.h. wherever there is that much room to run. There are hand cranks for the windows and pull cables to unlatch the doors. It is noisy, hot, jiggly, cramped, low, primal and made from the same tough, unchewable Kevlar used for Batman's body armor.
But no dealer, collector car investor or museum curator is questioning the Wall Street wisdom of Skeets Dunn--purchaser of the first Ferrari F40 super car sold in California. Especially when, only hours after this week's deliveries, the car began attracting premiums of up to $1 million over sticker.
Dunn, 46, of Rancho Santa Fe, a collector and restorer of classic Ferraris, began negotiating for his car in 1987 when the estimated price was only $240,000. He signed a contract with Ferrari that guaranteed he would pay only sticker price for the car.
He has yet to take delivery of his F40 from Cornes Motors of San Diego. But his phone hasn't stopped ringing, he said, with offers of $600,000 above what he paid for the car.
"Speculation is rampant," he said, "but I'm not selling. It's a silly car at an absurd price, especially in today's topsy-turvy economy. But it's also irresistible.
"My reasoning was purely from a (Ferrari) collector's standpoint. To do (restore) a car these days, from the ground up to concours and Pebble Beach (show) standards, the price is approaching $100,000. I thought this time, I'll start with a new automobile and just keep it forever."
Eight of the F40s--literally street-legal race cars with turn signals and air conditioning--arrived in the United States last week. Four were air-freighted by Alitalia from Italy to the West Coast, then delivered to dealers in Hollywood, Woodland Hills, San Diego and Newport Beach. Four more F40s were delivered to New York.
That's it for the first dribble. A few more are on their way, and by year's end, said a spokesman for Ferrari of North America, maybe all 40 U.S. dealers will have received one F40.
Only 1,000 cars will be built. More or less. Only 250 will be sold in this country. Or thereabouts. From such rarity--especially when combined with Ferrari's mystique and heritage--comes heady, wheeling and dealing in the lightning lane of $1-million motor cars.
The F40 drips superlatives. Fastest production car in the world. The most expensive ever, anywhere. It also represents the broadest profit levels since corrective dentistry.
Dunn, with his head for business figures, recognizes and is mightily impressed by what Ferrari will earn from F40 production.
"I estimate the car costs $125,000 to build," he explained. "It sells to dealers for $325,000. That's a profit to Ferrari of around $200,000 per car. So on 1,000 cars, Ferrari's profit will be $200 million. Incredible."
Dunn believes there will be buyers even if Ferrari doubles its planned production run of the car.
"We've bought the next F40," announced Rick Cole. The collective noun refers to Cole and the Marty Yacoobians, Sr. and Jr., partners in Rick Cole Auctions. "Ours will likely be in the next wave . . . but I'm not really allowed to talk about it."
He did say the car was purchased for "seven figures plus," and Cole wants to "be the first to auction one in this country." Why? "Because it is a piece of art that Enzo Ferrari designed to celebrate the 40th year of his company."
But $399,000 going on $1.4 million for something that doesn't even have a guest room and fireplace? "Sure," Cole said. "Because of its wonderfulness. It's art. Some guys like tires and wheels and Ferrari. Others like canvas and Andy Warhol."
The F40 accelerates from zero to 60 m.p.h. in the time it takes to read this sentence. Or about four seconds.
The engine is a three-liter, twin-turbocharged V-8 producing 500 horsepower. Indianapolis race engines are limited to one turbocharger.
The car is made from carbon fiber, Kevlar and aluminum and is about the weight of a Ford Escort. That's Formula One racing technology to give the car the same power-to-weight ratio of the world's fastest street motorcycles.
Yet the F40 meets California emissions standards. It also conforms to federal crash standards. Ferrari earned that U.S. blessing the hard way--by driving four F40s into a wall and wrecking them.
"In Los Angeles, it might not be advisable to drive an F40 to the supermarket," said Guiseppe Greco, president of Ferrari of North America. "But I have been acquainted with people in Europe who drive their F40s almost daily, and one owner has about 14,000 kilometers on his."
The parts of the car, Greco acknowledged, aren't the stuff of design breakthroughs and engineering masterpieces.
But the sum.