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Old 08-14-2015, 07:24 AM   #1
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Lets Discuss Boxster Pricing

It has always been my rule that one shouldn't pay no more than NADA pricing on any vehicle. The justification for this is is mainly from an insurance perspective. If you buy a vehicle for $15K and it is worth $12K and you have an accident and the car is a total loss, the insurance company is only going to pay up to NADA retail (maybe). So, you just lost $3K right off the bat.

So, when I start cruising CL for Boxsters, I see asking prices from private owners that are far more than what NADA will support. Am I missing something here?

For Example: a 2009 Boxster with auto and navigation, 11K miles. Owner is asking $35K. NADA is $32K and this is clean retail, which is what a dealer would charge.

Another - a 2005 Boxster, manual, no navigation and 66K miles. Owner is asking $25K. NADA is $19K. Again, clean retail.

Now, lets get back into 986 territory:

2002 Boxster S, manual, 47K miles. Owner is asking $15K. NADA is $16K. Okay, now we've got someone that is sensible about their pricing. Unfortunately the car has been sold....

None of us want to pay clean retail when dealing with a private party, but negotiate something less than that. Unless, the owner can justify cost with receipts and even then I figure those costs are a result of keeping the car properly maintained.

These are just a few examples. The 09 would peak my interest if it was less than $30K, but even at that price point, there is no warranty and there is always the concern something may go wrong with a $30K car.

I fully understand cars are a depreciating asset, so I'm well aware the longer you own it, the less it is worth. I get that. But, I'm having a hard time wrapping my head around the initial cost - where it is higher than book.

So, can someone explain Boxster pricing to me? Would you pay more than book value, and if so, why?

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Old 08-14-2015, 07:32 AM   #2
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I think it has to do with the art of negotiation and supply and demand but I never took a business class or economics.
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Old 08-14-2015, 08:46 AM   #3
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I think it partially has to do with the high costs of repairs and parts, and how great the car is. Even though these Boxsters have depreciated to sub $10k, any non-minor repair can easily cost a couple to a few thousand dollars. And we're talking about real repairs, not mods where every person has a different taste for. When the owner sells the car, they want to justify that cost because the car actually performs better than those that haven't had those repairs yet. But of course, the buyers don't care much and don't want to pay more for that.

In my personal case, I got my Boxster two years ago at 120k miles for less than $10k. For the past two years, I've done many repairs, including AOS, water pump, engine mount, rear track arms, CV boots, and many others. I spent quite some money (parts aren't cheap) to get the car running better. So when I need to sell the car, I would want to price it higher than those of the same mileage but haven't had the wear and tear areas addressed yet.

BTW, OP, I was gonna post in your intro thread, but I'll just say it here. I'm really jealous of you because you've owned two cars on my dream list, namely the BMW 8 series and the Miata NA.

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Old 08-14-2015, 08:47 AM   #4
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Yup. Supply and demand and add emotion to the mix.
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Old 08-14-2015, 08:58 AM   #5
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...

BTW, OP, I was gonna post in your intro thread, but I'll just say it here. I'm really jealous of you because you've owned two cars on my dream list, namely the BMW 8 series and the Miata NA.
Miatas are very inexpensive to buy and maintain. They're great fun little cars. Its got to be the cheapest sports car convertible you can buy and really enjoy.

The 8 on the other hand was nothing more than eye candy. It drove great, but was a heavy (4K lb) touring car. They are rather rare in some respects. It got the most attention when I took it to car shows. My wife thought it was a beautiful car, and I agree, but in the back of my mind, I was wondering when the dreaded electrical demons were going to surface on a 25 year old car.
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Old 08-14-2015, 08:59 AM   #6
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It has always been my rule that one shouldn't pay no more than NADA pricing on any vehicle. The justification for this is is mainly from an insurance perspective. If you buy a vehicle for $15K and it is worth $12K and you have an accident and the car is a total loss, the insurance company is only going to pay up to NADA retail (maybe). So, you just lost $3K right off the bat.

So, when I start cruising CL for Boxsters, I see asking prices from private owners that are far more than what NADA will support. Am I missing something here?

For Example: a 2009 Boxster with auto and navigation, 11K miles. Owner is asking $35K. NADA is $32K and this is clean retail, which is what a dealer would charge.

Another - a 2005 Boxster, manual, no navigation and 66K miles. Owner is asking $25K. NADA is $19K. Again, clean retail.

Now, lets get back into 986 territory:

2002 Boxster S, manual, 47K miles. Owner is asking $15K. NADA is $16K. Okay, now we've got someone that is sensible about their pricing. Unfortunately the car has been sold....

None of us want to pay clean retail when dealing with a private party, but negotiate something less than that. Unless, the owner can justify cost with receipts and even then I figure those costs are a result of keeping the car properly maintained.

These are just a few examples. The 09 would peak my interest if it was less than $30K, but even at that price point, there is no warranty and there is always the concern something may go wrong with a $30K car.

I fully understand cars are a depreciating asset, so I'm well aware the longer you own it, the less it is worth. I get that. But, I'm having a hard time wrapping my head around the initial cost - where it is higher than book.

So, can someone explain Boxster pricing to me? Would you pay more than book value, and if so, why?
You are dealing with people's egos, which they usually are not going to negotiate away easily. We often see people asking prices that are so far outside the realm of reality that it becomes laughable. Recently I saw an ad for a "rare" Boxster (the original over used adjective) which was asking more than twice the price for a car that we had just done a PPI on (exact same year, model, more options, fewer miles, immaculately clean). Some people cling to this dream for a while and then quietly drop the price and move on.

If you think asking prices are out of line, when we do a PPI, we provide the prospective buyer with a detailed list of what the car needs and how much we would charge to do the repairs. Sometimes the seller, when confronted with the PPI results, either refuses to drop the price, or only offers a token price reduction that is only a fraction of what it would take to make the car 100%; and the sale falls through.

Some people just need to learn to take the ego and emotion out of the process. In the real world, the market determines the car's worth, not your dreams.
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Last edited by JFP in PA; 08-14-2015 at 09:02 AM.
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Old 08-14-2015, 09:22 AM   #7
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As far as what an insurance company will pay for a totaled vehicle, it depends on the company and your policy.

I have AAA and they base the payout on replacement cost. NADA may be a factor, but they will give you what it would cost to replace your car with a similar condition, feature, and mileage car. With that in mind you will get full market value which often is higher than book price
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Old 08-14-2015, 09:57 AM   #8
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Simple supply and demand for the most part. Some areas you will find prices well below book value, while other areas will be higher. Depends on what is available, who is looking and then with these, time of the year. I would say the best time to buy is late in the summer / early fall. Prices will be discounted so owners don't have to worry about storage.

Bottom line - why would you pay more than book value? Cause you WANT it. That's the thing with these cars. Once you are bitten.....
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Old 08-14-2015, 10:02 AM   #9
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I agree with the ego bit, especially for first-time new Porsche buyers. Somebody pays $$$ for the brand new Porsche of their dreams - special orders the options, etc. That person takes great care of the car, gets all of the service done, and puts minimal miles on it. 7 years on and their $80K car has got to be worth more than 29K, right??? wrong.
...
And think about what Porsche charges for options. Out-dated tech, big$$$ wheels with a now outdated style, yellowing carbon fiber accents. ouch. There are a whole lotta P-cars out there that were 100K new that can be had for less than 25K now.
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Old 08-14-2015, 10:21 AM   #10
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Originally Posted by My_Name_is_Dan View Post
It has always been my rule that one shouldn't pay no more than NADA pricing on any vehicle...

I fully understand cars are a depreciating asset, so I'm well aware the longer you own it, the less it is worth. I get that. But, I'm having a hard time wrapping my head around the initial cost - where it is higher than book.

So, can someone explain Boxster pricing to me? Would you pay more than book value, and if so, why?
To answer your question(s), my guess is that you consider the Boxster to be an asset; some may/may not share this opinion. It logically follows that I (personally) don't share this opinion or your "rule" (above). Now, granted, I don't go to Cheesecake Factory whenever I damn well please, like others may do ... but, I am willing to pay for something I want - even if it is more than some other statistic or model states. I do appreciate having a warranty and specific options, so I buy new or build a car to taste. I don't spend much time worrying about depreciation, because I do not consider it an asset belonging to my portfolio, though it may be. But that's me.
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Old 08-14-2015, 10:24 AM   #11
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As far as what an insurance company will pay for a totaled vehicle, it depends on the company and your policy.

I have AAA and they base the payout on replacement cost. NADA may be a factor, but bathe will give you what it would cost to replace yor car with a similar condidition, feature, and mileage car. With that in mind you will get full market value which often is higher than book price
+1 Exactly what I was told by my company when I added my Boxster to my policy.
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Old 08-14-2015, 10:32 AM   #12
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Originally Posted by My_Name_is_Dan View Post
It has always been my rule that one shouldn't pay no more than NADA pricing on any vehicle. The justification for this is is mainly from an insurance perspective. If you buy a vehicle for $15K and it is worth $12K and you have an accident and the car is a total loss, the insurance company is only going to pay up to NADA retail (maybe). So, you just lost $3K right off the bat.

I had a Boxster totaled, I was very pleased to find that the insurance company did not go by book values, rather they based the replacement value off of similar cars within the area with similar options. Due to small selection they were willing to compare cars a few years newer and also with around 30k less miles.

Others may not have the same luck, but I was very worried that they would offer absolute bottom dollar and was pleased when that wasn't the case.
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Old 08-14-2015, 11:04 AM   #13
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I had a Boxster totaled, I was very pleased to find that the insurance company did not go by book values, rather they based the replacement value off of similar cars within the area with similar options. Due to small selection they were willing to compare cars a few years newer and also with around 30k less miles.

Others may not have the same luck, but I was very worried that they would offer absolute bottom dollar and was pleased when that wasn't the case.
You were lucky. Down here in the heart of Dixie, things are different. Both Alfa and State Farm will only give you up to NADA, nothing more. I just called my agent to confirm. Now, if you have uber expensive wheels that are not standard, they will take that into account and may fudge some more depending on mileage and condition (how in the hell are they going to determine condition if it totaled is beyond me..)
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Old 08-14-2015, 11:14 AM   #14
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Jake @ State Farm is a moron

Not you Big Jake
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Old 08-14-2015, 02:54 PM   #15
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You are dealing with people's egos, which they usually are not going to negotiate away easily. We often see people asking prices that are so far outside the realm of reality that it becomes laughable. Recently I saw an ad for a "rare" Boxster (the original over used adjective) which was asking more than twice the price for a car that we had just done a PPI on (exact same year, model, more options, fewer miles, immaculately clean). Some people cling to this dream for a while and then quietly drop the price and move on.

If you think asking prices are out of line, when we do a PPI, we provide the prospective buyer with a detailed list of what the car needs and how much we would charge to do the repairs. Sometimes the seller, when confronted with the PPI results, either refuses to drop the price, or only offers a token price reduction that is only a fraction of what it would take to make the car 100%; and the sale falls through.

Some people just need to learn to take the ego and emotion out of the process. In the real world, the market determines the car's worth, not your dreams.
Last time I checked the price of a Boxster with all new parts and a four year or greater warranty is running somewhere around $60,000. So getting a used one for 10-20K could be considered somewhat of a bargain and the problems you find in a PPI gives the buyer an idea of how much they need to keep it running - not necessarily how much to reduce the price. The 10-20k already has the reduction in it.... Like I said it has to do with the art of negotiation......

Another way to look at it is if you do a PPI and find no problems does that mean the car price should go back up to 60k..... I would guess no.

Bottom line - how bad does the seller want to sell and how bad does the buyer want to buy....

My guess is 10k will be close to the bottom for a working Boxster and given inflation and the scrapping of 986s over the years - the number for sale will drop over the next 15 years and prices then will be higher than today. I'm just hoping mine will keep running without making me go bankrupt;-)
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Old 08-14-2015, 03:03 PM   #16
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Last time I checked the price of a Boxster with all new parts and a four year or greater warranty is running somewhere around $60,000. So getting a used one for 10-20K could be considered somewhat of a bargain and the problems you find in a PPI gives the buyer an idea of how much they need to keep it running - not necessarily how much to reduce the price.
With the exception of the rare cases where the car up for sale literally needed nothing, I do not believe any car we have done a PPI on that ultimately went to sale closure ever went for the asking price, always less. Besides sorting out the really undesirable cars (and we have seen a few of them as well), the PPI results have nearly always been a negotiation leverage point for the buyers, which is one of the principal reasons many buyers require one.
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Old 08-14-2015, 03:12 PM   #17
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There is a human characteristic, well documented by economists, called "the endowment effect" (See The Economist June 21, 2008 Page 95) which says that people value an item irrationally highly because they own it when, if they didn't own it, it has been proven they would value it lower.

If you want that car, you have to either pay the higher price or risk that someone else will. And you have to be willing to wait.

When you are dealing with someone whose pricing is seemingly irrational, its just human nature. Your task is to find the motivated seller who can get beyond this feeling for one's own possessions and make a rational pricing decision. Here is a case where it pays to know the market and to know why the seller is selling.

Does he need to sell or is just bored and want to buy another car?

The first rule of negotiating is "there is another car just like this around the corner". The more you believe that, the firmer your negotiation will be. And the more you make the seller think that, the more flexible the seller will be if he has to sell. After all, you may be the rare potential buyer he needs. Come to the negotiating table with documentation.

Remember, there are hundreds of used Boxsters for sale today.
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Old 08-14-2015, 03:29 PM   #18
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With the exception of the rare cases where the car up for sale literally needed nothing, I believe any car we have done a PPI on that ultimately went to sale closure ever went for the asking price, always less. Besides sorting out the really undesirable cars (and we have seen a few of them as well), the PPI results have nearly always been a negotiation leverage point for the buyers, which is one of the principal reasons many buyers require one.
If I were a buyer, I would definitely get a PPI both for leverage and for evaluating what troubles lurk ahead. I told my friend who was buying a BMW and asked for advice to get a PPI.

A seller though should start at a higher price knowing there is room to go down for bargaining purposes. A seller should also be prepared to respond to the results of the PPI and have a little room to move so the buyer feels happy - ie the art of bargaining.

The reality is that 10-15K already has priced in a lot of depreciation for future maintenance. At 1-2k per year maintenance these cars are bargains when compared to buying or leasing new cars. But then again they are older.
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Old 08-14-2015, 04:11 PM   #19
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You were lucky. Down here in the heart of Dixie, things are different. Both Alfa and State Farm will only give you up to NADA, nothing more. I just called my agent to confirm. Now, if you have uber expensive wheels that are not standard, they will take that into account and may fudge some more depending on mileage and condition (how in the hell are they going to determine condition if it totaled is beyond me..)

We have progressive coverage in South Carolina. The accident was full fault on the other driver, who also had progress vie. They went as far as considering that the replacement car would need to have memory seats to match the option being fitted on the totaled car. The settlement was upwards of 4k over blue book value for the totaled car. Now to reach the settlement wanted it did take some haggling and compilation of similar cars as well as documentation of recent service and a recipt for a glass top, however I honestly do not think much of this helped and regardless the first settlement before haggling was still over blue book by around 2K.

NADA value could never replace a boxster as they almost always sell for (or are at least listed for) several grand over book value.
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Old 08-14-2015, 04:30 PM   #20
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Originally Posted by My_Name_is_Dan View Post
You were lucky. Down here in the heart of Dixie, things are different. Both Alfa and State Farm will only give you up to NADA, nothing more. I just called my agent to confirm. Now, if you have uber expensive wheels that are not standard, they will take that into account and may fudge some more depending on mileage and condition (how in the hell are they going to determine condition if it totaled is beyond me..)
No, wrong. With your insurance company, things are different. It has nothing to do with your location.

Also, NADA means just that; nada. You'll pay a compromise between what you and the seller think is fair.

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