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Old 08-23-2012, 08:13 PM   #1
B-Line
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Default Depreciation curves

Does anybody have a model or bank of envelope formula for determining value on a slightly used, pre-owned, high-line vehicle?

For example, when trying to value a used car, let's call it a 2011 with near 10,000 miles.
- I would immediately negate almost all value a seller would try to quantify with extended options. While not having certain options would kill a sale for me, having extended options brings no value to me.
(I'm also told car dealers never increase value based on options, they only decrease value based on things the car should have but doesn't (like sport-chrono.)

So, using BASE MSRP, what percentage do you subtract:
Per year?
Per mile?

Just looking for general idea. Of course all cars will be different and depends on economy, demand, inventory, etc.

Thanks,
B
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Old 08-23-2012, 08:27 PM   #2
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This kind of thinking, while most appropriate in certain financial environments, will keep you from ever enjoying Porsche ownership. They pay huge dividends, just not in dollars, but in driving pleasure.
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Old 08-23-2012, 08:35 PM   #3
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Quote:
Originally Posted by solomonschris View Post
This kind of thinking, while most appropriate in certain financial environments, will keep you from ever enjoying Porsche ownership. They pay huge dividends, just not in dollars, but in driving pleasure.
Haha, I have two 911's, one I've owned for 11 years, the other I've owned for 5.

But since I lost my shirt on the 997 Turbo I purchased new, I have vowed to never again buy a high-line vehicle brand new unless I attain such enormous wealth that it wouldn't make a difference.
997 Turbo purchase price and MSRP in 2007: $130k
Approximate value today: (10k miles) $75k
Depreciation: $55,000

So, whoever I sell my car to is gonna get a vehicle that has extremely low miles, still smells new, etc. and gets it for $55k less.

And since we all know the first owner takes the biggest hit, I'm wondering how to qualify it. I'm thinking about selling my 911's and getting into something new to me, slightly pre-owned to someone else.

I'm trying to figure out what the real world price of the car should be using formula's of depreciation curve rather than emotion.

And since this forum and Porsche owners in general are some of the most savvy car buyers and sellers, thought this would be a good place to get some starting figures.
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Last edited by B-Line; 08-23-2012 at 08:57 PM.
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Old 08-23-2012, 09:41 PM   #4
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Hi B-Line

Is this kind of what you are looking for ?

http://www.whatcar.com/car-depreciation-calculator

It is UK --I have yet to see something in North American values ...

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Old 08-23-2012, 10:06 PM   #5
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Quote:
Originally Posted by GregGH View Post
Hi B-Line

Is this kind of what you are looking for ?

http://www.whatcar.com/car-depreciation-calculator

It is UK --I have yet to see something in North American values ...

Greg
Didn't work

Got to the part where it calculates value then hangs.

But yeah, a US calculator for high line cars would be great. Problem is, most depreciation calculators on the internet are designed for people who are writing off their vehicles for tax purposes. So, it's not really the "depreciation" figure I'm looking for. I want real world, exotic depreciation vs. tax formula for write off depreciation.

thanks.
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Old 08-23-2012, 10:35 PM   #6
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Biggest drop across the board is on the first year, then almost same rate for the next 4-5 yrs, before it flattens, GT3 in general has the least depreciation.

http://www.whatcar.com/car-depreciat...ditionId=18194
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Old 08-23-2012, 11:26 PM   #7
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I'm trying to figure out what the real world price of the car should be using formula's of depreciation curve rather than emotion.

Residual values for Porsche leases are available, and they use a fixed percentage of the original MSRP. Of course there are various books which list used car values, but I've sold a few cars to Dealers and they couldn't care less about what values are listed in any books. They simply look up what comparable cars to yours are selling for at nearby auctions. That sets the maximum price that they will pay, and they then check your car out to determine if they will pay you that maximum value.

My experience is options have vey minimal impact on a used car's value. That can be disheartening to many Porsche owners who have sunk $20K plus into options. Here's a link to NADA depreciation values for a 2012 Porsche:
http://www.nadaguides.com/cars/2012/...-4/cost-to-own
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Old 08-23-2012, 11:49 PM   #8
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I put this together a few months ago using Edmunds prices of the time.

Click the image to open in full size.
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Old 08-24-2012, 12:09 AM   #9
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sjfehr - Thanks for the depressing chart. To make matters worse, based on my experience the Edmunds used car values are a little optimistic.
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Old 08-24-2012, 12:17 AM   #10
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Unfortunately new car depreciation is significant over the first few years, regardless of the make/model. The value of something is ultimately only what someone is willing to pay, and a new owner will rarely place the same emotional "value" as the seller on a car.

The best guide to "real world" pricing is to survey the market, which does fluctuate. Cars.com/autotrader will give you the best guidance to true market value. Easiest way to "look into the future" is look at similar model that is a few years older. This may not be 100% accurate but will give you a solid idea of where the values are headed.

I'm getting ready to take the plunge into a 997 turbo and have been spending way too much of my free time looking for the right car and working out the depreciation factor and the cost of ownership.

Cheers,
Christian
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Old 08-24-2012, 12:26 AM   #11
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What finally convinced me I could afford to buy a Porsche was actually the resale value- they depreciate off the lot, sure, and drop over time, but they do still hold considerable value. Cost of ownership = sale price - resale price, which actually puts Porsches into a similar real-cost realm as cars of far less performance. What also surprised me when I plotted those curves is that the curve looked less like a pinewood derby track and more like a flat slant. Which means net cost to buy a 3 year old porsche and drive it for 5 years is not much different than to buy one at 8 years old & sell at 13. Except that the 3 year old porsche will probably have a lot fewer issues that need repair.
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Old 08-24-2012, 12:52 AM   #12
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I'm actually looking to buy an Audi R8 4.2 Spyder.
I asked this question here because Porsche owners are usually quite informed when it comes to these matters (or uninformed.... lol.)

I can't find book values anywhere and the asking prices on Autotrader on a used vehicle are almost the same as the price on new ones. And there isn't a whole lot of inventory. I think there is a lot of wishful thinking going on but sometimes you have to ignore asking price and make offers based on actual values recognized by history of like cars.

So, if a base R8 Spyder is $130k, a one year old (2011) 8000 mile version should have approximately a $30k depreciation.
$100k for that car.

But autotrader has em all listed starting at $125k and going up from there.

Granted many of them are heavily optioned but as stated, no one gets money back for options. Dealers know it, sellers know it, I know it.

And I've spoken with local Audi dealers and they have new ones available and at discounts but I don't want that depreciation. I can wait and be picky.

Just wondering how I could qualify what a reasonable price could be.
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Old 08-24-2012, 01:28 AM   #13
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I learned to "settle" (ie not getting the exact spec I want, configured new) and stopped buying new cars many years ago because you just lose your *** on it. This was after a constant shuffle of leasing every 2 years. I just got tired of it. Buy 2-3 years old, low miles, well maintained, pay cash, drive, enjoy, maintain, drive it until the wheels fall off, smile the whole time doing it.
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Old 08-24-2012, 07:47 AM   #14
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Hi Alexb76
Thanks for showing me you can do multiple vehicles on 'what car.com' - your link is neat will try to post first image )
Hi B-Line
Go get a coffee while the squirrel in the server runs the data at what car.com - slow

There was an excellent post by member ( Palmbeacher ) about waiting for the right time to buy ...for him - last day of Feb 2009 ... I need to find that post and pin it on wall .. my hero .. There will be another 'crash' to market and what a great time to buy ( try www.zerohedge.com ...but it takes time to become a believer if you are used to MSM ( main stream media )) ...just sold the Corvette and money sitting in PSLV

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Old 08-24-2012, 10:36 AM   #15
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Ok. The above graph now makes more sense. It's in British Pounds. One L = 1.58 USD.
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Old 08-24-2012, 10:36 AM
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