Porsche (996) depreciation
 

Any suggestions on how best to calculate depreciation on a prestine 2001 911 Coupe?

I suspect "standard" calculations may not be appropriate and my CPA has little experience in the matter.

I purchased the car new in March of 2001 and with all my options paid $75,444 before taxes. Currently it has 9500 miles on it.

gonzo--calculation has nothing to do with it--its supply and demand. with low demand right now i'll bet you'll get $55-58k. options are worth nothing at trade in. sad but true :(

Dealer offered me 39k for my mint '99 with 28k miles. It is a July 99 build and still under warranty. The sticker was same as yours right at 75k.

Are you looking for depreciation to estimate a sales price or for other resons? If the former, as has been suggested, I would simply see what the comprable sales are. My guess for your car, having recently purchased a late 2000 build, highly optioned C2 cab with 20K miles (and over $85K sticker)for $61K, is mid/high $50s. :(

If you are checking resale values, there are a lot of on-line pricing guides. Purchase price - resale price = depreciation, right, accountant? Here'e a few sites to get you startd.

<a href="http://www.nadaguides.com/" target="_blank">NADA</a>

<a href="http://www.edmunds.com/" target="_blank">Edmunds</a>

Hope this helps.

I have been told that, generally speaking, you can expect annual NEW auto depreciation of around 17.5%...for several years, after which time the depreciation curve will eventually level off.

Sadly, unless you have a rare or unusual model, Porsches depreciate at a level comparable to other cars.

Over time the car will "bottom out" with regard to depreciation, and may actually appreciate. But with regard to the 996/986 line, current supply far outstrips demand.

If you apply this 17.5% 'guesstimate' to your car, you would receive a price of $56,795.

Anybody seen any good '87-'89 911 coupes for $3,000? :)

[quote]Originally posted by Jim Michaels:
<strong>Anybody seen any good '87-'89 911 coupes for $3,000? :) </strong><hr></blockquote>

I'll take couple of them! :D

[quote]Originally posted by Flying Finn:
<strong>

I'll take couple of them! :D </strong><hr></blockquote>

Hey!! Count me in!!

GonzoP1 -

I concur with the advice others have offered to derive market value (and, thereby, the depreciation) for your 996.

However, I was wondering if this is the information you were looking for since you mentioned that your CPA was not familiar with matters related to auto depreciation. If your question was more tax focused, I'd be happy to add some insight. Otherwise, you have been well advised.

Thanks for the feedback guys. If I was selling the car I'd truly be depressed now.

Actually, as it's my company car (my business) I was looking for the appropriate depreciation for tax purposes/asset valuation.

My CPA is very experienced, just not with Porsches. While he can apply the "standard" depreciation model, I was looking for something particular to our Porsches.

Thanks for any additional feedback.

Gonzo,

I'm presently shopping pretty hard for a '96-'98 993. I've found the Edmunds (www.edmunds.com)prices are reflecting actual sales prices the most acurately, but they are still lagging the current market by a few weeks. Since this has been a buyers market, that means that actual sales prices at this time are a bit lower than even Edmunds prices. While not directly related to the value of your 996, you might want to look there since their numbers are allegedly based on millions of actual sale prices.

As per the Porsche pre-owned lease residuals a 2001 C2 coupe (with your low mile bonus) in 24 months from now, based on using it 12,000 miles per year, will be worth $44,650.

36 months from now is will be worth $40,250

In 48 months it will be worth $35,965

60 months $31,631


Hope this helps....

i was reading the April 2002 Excellence where under the reader sales reports a reader reports buying a 99 cab for $73,500 and that was listed a a good deal.

I am in the market for just such a car, and the amount of cars under $60k is amazing, most under 20k miles. $15k drop in approx 6 mos ... good for me (otherwise I could not afford one) bad for 996 owners ..

heck, i can get a 2000 for less than $65k. it is indeed a buyers market

Art

If it's for tax purpose, wouldn't car belong in a capital cost allowance class so its a fixed percentage? anyway, its kinda off topic..

SpectraG - Yes. This was the nature of my earlier inquiry also.

There are multiple ways the cap. cost of an automobile used partially/fully for business purposes may be recovered - and it varies a bit if the car is purchased or leased. Here are the general rules -

Under the ACTUAL EXPENSE METHOD, depreciation expense is determined under special rules related to assets classified as "luxury autos". Essentially, the cost is recovered based on tables published by the IRS which limit the amount of depreciation in each year until the total cost of the vehicle is recovered or the asset is sold or otherwise converted (traded-in, etc.) These tables are published and adjusted annually to reflect inflation/deflation.

For example, since GonzoP1 purchased and presumably "placed his 996 in service" in 2001, the maximum annual depreciation expense would be $3,060 in 2001, $4,900 in 2002, $$2,950 in 2003 and $1,775 in each succeeding year.

An alternative method, called the STANDARD MILEAGE RATE uses pre-set rates to determine the deductible costs of operating an automobile for business purposes. Use of this method eliminates the need to track actual expenses for fuel, oil, maintenance, insurance, etc.

For example, in 2001, the standard mileage rate was set at 34.5 cents - which reflects the cost of all operating expenses, including depreciation. Of the total 34.5 cents, the depreciation component was set at 15 cents. Therefore, for each business mile driven, 15 cents represents deductible depreciation for tax purposes.

Sorry for the long post - hope this information is helpful.