Boxster depreciation?

[MNBoxster]

Hi,

In 30 years buying and selling Sports Cars, I've never bought new (though I almost always could have). I've usually bought a 2-3 year old model in as new condition and mileage, and drove a hard bargain on the Purchase price.

Over some 30+ cars, averaging 2-5 years ownership, I have always sold them for more than I paid.

The key is to buy smart - keep your objectivity in the forefront and your emotions in the rear. If you can't make the deal on the car in front of you, rest assured that there's another one just like it, just around the corner. Do your math and stick to it.

I bought my '99 Boxster 2 yrs. ago with 17k on the odo for $17k (asking $24). Given the fast depreciation, this may be the first car I actually lose money on. Whatever.

The key is not how much it holds it's value, but rather, how much under the current value that you can acquire it for...

Happy Motoring!... Jim'99

[TriGem2k]

Last I checked you don't buy cars hoping to make money on them after years of ownership.

[MNBoxster]

Originally Posted by TriGem2k

Last I checked you don't buy cars hoping to make money on them after years of ownership.

Hi,

I do... and have...

Happy Motoring!... Jim'99

[Brucelee]

You COULD do some quick analysis on this if it makes sense.

There are data on the web for MSRP for most cars and there is KBB.

Taking the same data points for a comparable car, say a Corvette, Z4 etc. you could take a particular set of years and calculate the percentage drop over time for each car.

Interesting, maybe I will try it.

Subjectively, the Box would do worse than say, an M3 but that is just a guess.

[1JB]

The depreciation on a new Porshce is no worse than any other comparable car but please show me a comparable car. BMW's aren't comparable. I'm not saying they're better or worse they're just not a Porsche in any sense of looks, driving, etc. Mercedes are not comparable, Audis, and so on. All of the luxury sport cars depreciate, but they're each in a unique market as well. The biggest depreciation comes from the Porsche options. They don't provide any return at resale. None, zip, zero, nada. Some are a liability at resale, pccb, pasm and pcm likely candidates for costly failures with pccb being the worst.

If you're going to buy new get a car lightly optioned with the options buyers expect at this price level: halogens, climate control, top of the line sound sytem with a cd changer. Also look to a minor change within the same platform. I looked at used 986s and found a significant difference between the 987 and 986. I love the 986 but liked the 987 and potential increased reliabity, rms for example, much better. Buying a 987s at the end of '06 when Porsche announced the 3.4 for '07 was a good time to do so. There was a lot of hype of 15 more hp and vario cam plus which is really a big yawn unless you're Speed Racer at the track. I got mine for 15% below msrp. Now it's depreciated 30% but that's from msrp. A neighbor waited and got an '07 for list. He can't go any faster than me down the drive to work even if there are no cars on the road because you can only get 80% out of the cars performance on the street at best. Don't ever pay msrp. That means you need to be patient and time your purchase when the market is soft.

The used 911's that were in the same price range as the new 987s were completely different beasts. They just weren't my cup of tea and being out of warranty the potential maintenance costs were a real concern. I keep my cars for a long time and get my money's worth out of them. I'll seriously consider a RUF upgrade when the '06 is out of warranty. That'll be the bomb.

So it's a matter of choice and common sense. If an '02 turbo melts your butter go for it. You'll get a heck of a deal but not necessarily more bang for the buck of a new 987. If you want brand new, popular and highly optioned be prepared to take a bath on depreciation. The Cayman S when it came out is a very good example. They were selling at or above msrp when they first came out and the dealers brought in a few with options that put them well over $70k US. If you can't pick up a Cayman S for 15% below msrp right now you're in a completely different market than I am in the NE US.

[larryshomework]

You can get a hint at depreciation by looking at lease terms on new cars.

BMWs have residuals in the 60-65% range after 3 years. This is strong but it still shows a drop of 1/3 after 3 years.

Many cars have 3 year residuals in the 52 - 57% range.

Sometimes the residual is inflated to get lower (subsidized) leases but across the model line they generally indicate the anticipated depreciation rate -- 5 years out, most everything is going to be below 50% of original value.

My 2002 Box was 48% of original value when I bought it and was between 5 and 6 years old. That doesn't seem like excessive depreciation to me.

[Frank Patrick]

Cars are, not a good investment, to say the least. That said however in thirty years of buying (61 vehicles), kind of a dumb hobbey of mine, mostly sports cars, and a few bikes;I would like to share with you my experience. This is my experience and may not reflect any resemblance to the automotive market what-so-ever. With the excpetion of a 67-427 Corvette Convertble, a HD-Fat Boy, and a 1970 -914-6, I have never actually "made" money on any vehicle. I lucked out with the 914, which was sold at an auction in Scottsdale, AZ for more than 4 times I paid for it.
Without any specific studies, just what I have personally experienced, PORSCHE in general, has held thier value better than any other vehicles I have owned. Maybe it is the mere fact that there is just not many, by general comparison, built, or the folks who buy them will not settle for much else, not sure.

[Darkhamr]

Originally Posted by larryshomework

You can get a hint at depreciation by looking at lease terms on new cars.

BMWs have residuals in the 60-65% range after 3 years. This is strong but it still shows a drop of 1/3 after 3 years.

Many cars have 3 year residuals in the 52 - 57% range.

Sometimes the residual is inflated to get lower (subsidized) leases but across the model line they generally indicate the anticipated depreciation rate -- 5 years out, most everything is going to be below 50% of original value.

My 2002 Box was 48% of original value when I bought it and was between 5 and 6 years old. That doesn't seem like excessive depreciation to me.

I agree with this as in general I find all cars depreciate within a couple of points of each other when years and mileage are constants. The problem is that 50% depreciation on a $60k car seems worse than the same depreciation on a $30k car

[r9i8c7k]

Originally Posted by MNBoxster

Hi,

In 30 years buying and selling Sports Cars, I've never bought new (though I almost always could have). I've usually bought a 2-3 year old model in as new condition and mileage, and drove a hard bargain on the Purchase price.

Over some 30+ cars, averaging 2-5 years ownership, I have always sold them for more than I paid.

The key is to buy smart - keep your objectivity in the forefront and your emotions in the rear. If you can't make the deal on the car in front of you, rest assured that there's another one just like it, just around the corner. Do your math and stick to it.

I bought my '99 Boxster 2 yrs. ago with 17k on the odo for $17k (asking $24). Given the fast depreciation, this may be the first car I actually lose money on. Whatever.

The key is not how much it holds it's value, but rather, how much under the current value that you can acquire it for...

Happy Motoring!... Jim'99

You make very good points...I don't always have the patience I should but my good friend does. He was looking for a used '05 Infiniti FX that were going for $40K at the time. He searched for about 6 months and got exactly what he was looking for $31K. He is ready to sell and he'll probably get $30K.

[Where's my car?]

WOuld yOu guys like my to make you a different porsche spinning logo???

[Darkhamr]

Originally Posted by Where's my car?

WOuld yOu guys like my to make you a different porsche spinning logo???

Sure if you are game. I actually never meant to use that on this site as it's PL's anyway. I thiefed it for my sig on other sites.

[teacher]

I just wanted to add that timing is everything when considering buying a preowned Porsche...Porsche's value decreases exponentially in the first few years, but seem to level off over time...consider my car: I bought my 2001 Boxster, base model with 41000 miles on it for $26,000 and the asking price was $30K. It had one major flaw (to me) which was a crinkled plastic window (indentations) but I figured I would eventually get a new top anyway...plus it was still under Porsche warranty, so when I bought it they did about $2800 worth of work for free... Also, Porsche's depreciation does tend to level off after the first 3 years...my car is still worth $20,000 at least, in it's good condition.
But getting back to the point, it's always best to buy a car on the last day of the month and one hour before closing...at this time, dealers are falling all over themselves to make the sale to increase their sales volume for the month...so if ever one is in the market for a Porsche, that is the time to buy. One other thing I noticed is that it's best to buy a slightly used Porsche from another dealer who have no great fondness for a car that is not their own, so they don't have a problem unloading it at a good price (unlike Porsche, who are clearly biased, in my opinion, because it is their car after all)

[Adam]

It could be worse, just think of those 996 owners that bought new thinking of selling and trading up to a 997...ouch. Porsche went "high volume" with the boxster and the 996 to make some $$$. They made a mint and were the most profitable car company for awhile. The joke is on the consumers. I'ts a Porsche with a hint of Toyota literally and figuretively. I can only imagine how pissed of the 996 seller is right now and the boxster seller to a slighty lesser extent.

[hamstur]

The initial value of the car needs to be based on dealer invoice, not MSRP, hence the word "profit." Something to note is Porsche mark-ups ($6K-$8K) are considerably higher than even BMW ($3K-$4K).

Options add about 10-20% value for every dollar spent, so realistically no value unless it's a drastic performance upgrade.

If you want to validate this, go to a site like Kelley Blue Book. The dealer invoice for a 2006-07 987 is $39,222, so you can gaurantee a private sale value (i.e., true market value or TMV) for one with zero miles is $38-39K. I just tested it, and the KBB value is $38,520. The rest of the depreciation comes from use and age, taking into account upkeep costs and replacement parts.

I've got a 2004 non-S. A couple options in the pot, along with dealer mark-up made the MSRP $49K (I bought it used 9 months off the lot back in 2005 for $32K from a couple going through a divorce). Regardless, the invoice that year was $37,121 which was the true value brand-new. The current value for a brand new one is $31,130, so the car technically only depreciated 16%, which isn't bad by any standard.

Take it back to 1998 when the invoice was $35,895, the TMV for a brand new 1998 is $18,325, or a 49% drop. A 51% value for a 10-year-old car is, in my opinion, very high.

For anybody who ever thought their non-S boxster was ever worth more than $36K, it unfortunately never was. Every dollar you spent above that was to fatten Porsche's very deep pockets.

Andy