alexb76

I am curious if anyone's done any financial or data analysis as to WHEN is a sweetspot of Porsche depreciation?

For sure, the biggest hit is on brand new cars... but then let's say after one purchase a 2 years old 911... how much they should keep it before the value drops off significantly (let's say by annual rate of depreciation)? Both age and milage wise?

I am sure if we had some good data it's easy to plot it in a chart to find the sweetspot.

997_rich

Ok, let me preface this by saying that I don't intend to use this info for making decisions. I keep cars for a long time- usually ~8 years. I buy them with 20-30k miles and about 2-3 years old. I like the newish feeling and I also like when they get old enough that I don't feel bad about driving them in rough weather or replacing some things half out of necessity and half for the fun of upgrading/modifying.

I'm always interested to discuss in economic terms so last year I pulled the values from Kelly Blue book and charted them. Every value here is for a C2 car of 50k with the same options (if i remember correctly). Note- I'm not sure how good thier data is. I'm sure that some of the data is reported sales and some of the data is just an algorithm filling in the spots. Also note- this isn't one car depreciating over time, it is an amalgam of many different cars at different points in thier life. However- the curve is quite predictable so that means that the values are very predictable (if the data isn't electronically created).

you could also plot the curve showing the cost of maintanance. That curve would probably start as under 2k for the first two years and then slowly go up until you hit maybe (100k mi avg ?)for a clutch or the point where suspension all around is wearing out (150k?) or the trans dies (200k?) or even further out when the engine wears out (230k mi avg?). One might get better performance out of a clutch but we have to go by the average. I'd love to see if anyone has a yearly average maint cost if it's built on some kind of data (even if the data isn't the best)

if you want to pick the optimal time to buy... here's where you get into the land of opinions. If the curve had a hard knee after the initial drop that might be a good time to buy (just speaking from a financial perspective). But it doesn't have a very hard knee. I think you can probably draw your own conclusions here.

CivicRydr

To your question, most car models experience a drop in value when a replacement model is available. Naturally people want to trade up for the new hotness. In my experience the 911 is a special car and pricing behaves somewhat differently than other cars and other factors are more important with regards to pricing.

For example, 993s are priced at a premium. High milage 911s are significantly discounted. Options really matter (anyone that has optioned out a new Porsche can attest to how much you can spend here). All these factors are not accurately accounted for by KBB. Additionally, if you look at used market you will see quite a range of prices. The number of variations of 911 models exacerbates the large price range. Lastly, this isn't a high volume car, so the data is spotty (less # of data points).

Ultimately, I think if your 911 has low miles, and is treated with care and therefore in great condition, it will hold it's value well. If you drive the hell out of it, and treat it like crap, then no one is going to want to give you much money for it. This is important for all cars, but more important for this car and it's owners.

Me too. Brand new cars are too nice (yes they are) and too expensive.

alexb76

Awesome! That's exactly what I was looking for. Looks like, as expected the biggest drop is within the first two years, then the curve has the same drop from then on. BTW, that bump there is for 993 pricing, which has a premium over 996, so that's an anamoly probably won't be relevant anymore unless 997 becomes the next 993 (some models might).

I am not trying to buy, but to kind of plan as to when is a good time to sell mine, or if I should keep for 10yr+.

Edgy01

I suspect in time that the anomaly with the 993 pricing will disappear in time as more and more buyers recognize that despite its good looks, it's still a 15 year old car that isn't getting any younger--and that's for the newest of them. Wiring grounds, and parts failures will ultimately scare off the typical used car buyers. What I have discovered with over 30 years of Porscheship is that current buyers of the "911" are less mechanically savvy and therefore scared off by the older cars.

aaks38

I have always felt 3-4 years after initial release, most cars reach their sweet spot of depreciation and decent mileage left on the car when it comes to used car purchasing.

utkinpol

modern porsches, as any other cars are best buy after initial lease ends - 3 years old, with CPO. this way you get most of warranty while most of original price has dropped.

Mister C

Very interesting post.

I am one of "those people" thinking about moving from a 997 to a 993. I have MY05 997 and am still on a steep part of the depreciation curve. Moving to a MY98/97 993 puts me on a positive appreciation curve.

Also, my car is worth about as much now as a 993 making a trade pretty attractive. Some might consider that a sweet spot for a trade. At least that is how I like to rationalize selling a car I just bought 2 years ago for a car 8 years older with less horsepower. Seriously, love both models and this is a difficult decision for me.

I hope Edgy01 is incorrect about future 993 pricing but he certainly has a point about buyers in general being less mechanically savvy and therefore more wary about older cars. Time will tell.

CivicRydr's comments on maintenance are spot on. If the car is not maintained it won't hold value. One of the biggest things I am looking for as a buyer is solid maintenance--somebody's baby/car/girlfriend would be ideal.

Macster

OTOH, good examples, unmolested and in original condition will I think help keep the 993 prices (at least for this set of 993's) high.

That a number of these cars are lost to accidents/theft and what have you works to keep prices up.

And as you touched upon in your post, and which I'll cover a bit more and that is the 'simplicity' of the 993 compared to the 996 and newer models is an attraction for some.

Sincerely,

Macster.

yemenmocha

As others have said, there's some variation with models, so it's hard to get an "overall" set of data.

I'd think 993's held values above average.
I'd think 996's held values far below average.

Both for obvious reasons.

997_rich

There is some variation with models but I'm not sure if it's all that much. if you look at the chart (granted this is KBB data) you'll see that there is no "step" down in value between 997 and 996. Regardless of model the depreciation curve is very similar. This doesn't include special models because they're clearly outside the data here.

The same goes for 996 and 993. Perhaps this is because even thought the 993 is more highly valued to some because of the classic design but many of the 993s are now worn out bringing the average price down. Some might value beautiful old design and some might also value more modern performance which would give the 996 a leg up over the 993.

What I'd really be interested to see is when the curve of average sale prices really does start to turn up.. that doesn't show on the chart above. My guess is that happens around the 20 year mark. Remember, though the pristine 20 year old cars will go for good money, there will also be worn-out cars dragging the average price down.

I'm also surprised that some of the cars I never thought would go for higher values are now appreciating. My friend has a mid eighties ferrari 348 that I used to laugh about the maint cost vs the value. He bought it for ~35k some years back and he was spending gobs of money pulling the engine and changing the timing belts or something every year. Now unbelieveably (to me because I always thought that car was garish as hell) the value has really begun to increase and he almost took an offer for 90k. What's the take-away? I'm not sure I can trust myself to value cars (as an investment) because I can't seperate my personal tastes from my economic thinking. Of course I'm not buying cars as an investment(that'd be a really challenging venture) so it's not really a worry.

eflight

I predict that the used 996/997 price takes a significant hit as the used 997.2 market price comes down.

From personal experience I can tell you that I am very hesitant to buy a car with a possible IMS issue (yeah I know very low possibility and not all that rational) when for just a few grand more I can step into a 997.2 without those issues.

So right now I've been very aggressive on getting a great deal for a 997.1, cause if its not a great deal then I 'll just hold off until a .2 comes along that is within my budget. I'm almost there.

Zeus993

I went through the same process you are going through a year ago when I seriously looked at downshifting from my 997.1 to a stunning silver over red/black 993 cab. I LOVED that car with all of its sportscar rawness but in the end, the more I read about the maintenance and it's issues (yes - it has some as well) I opted to keep my trusty 997.1 with its warrenty etc... The 993 is very very cool looking car but in the end lacks creature comforts and is not a good daily driver. With that engine it is über important to get the oil temp up EVERY time you drive it and my 8 minute daily drive just wasn't going to do it. As a second weekend car? Perfect, just not as a DD.
This week I've been looking at trading UP for a 997.2 and got a quote on the trade-in value for mine. It wasn't that far off from what I expected. The interesting thing is that there just aren't that many 997.2's for sale. The market seems tight. So I think perhaps I will wait another year...
Always on the hunt...

utkinpol

for me right now to buy new replacement motor for my 997.1 car is cheaper than to buy a 997.2 S or GTS car. when it will change then it may have sense to upgrade, meanwhile 997.1 is more then fine.
993 car is pretty unique and i can see why there is a lot of people who like them but do not be fooled - as those cars age any of them will suck out money out of your pocket.
any work and repair on 993 car costs more than work on 997 car imho and 993 engine work is on par with 997 gt3 engine work.
that`s why i say that sweet spot of an ownership is when car already lost good chiunk of original cost, still fresh enough and got most of issues still covered by warranty. as soon as warranty ends - you are on your own.

Mister C

Thanks Zeus993. Also thanks to Utkinpol for some other helpful comments.

I suppose my situation is a little different. I am third owner on my 997.1, no warranty and just discovered a slight leak in the RMS (crap!). So my cost basis is a bit different. If I keep it I will be doing the LN engineering IMS upgrade while replacing the RMS. About $3500 from what I can tell just for that fix but it would give me peace of mind. Yeah, I know that the IMS failure rate is likely pretty low but would likely go this route if I stay in the 997.1.

Also, my commute is 25miles each way and often the traffic can get heavy so she should get plenty warm on each drive. My weekend romps are longer (and much faster). Love that radar detector.

As for creature comforts I can skip many and not be bothered at all. I never use the Nav on my 997.1 and think that reliance on a Nav system robs you of really learning the roads. If I am lost I can always use my iPhone. I often turn off the stereo to listen to the engine and don't talk on the phone while I am driving in any event. I guess I am a bit old school in that regard.

Utkinpol's comments on maintenance costs (993 vs 997) are very interesting to me. I was assuming that all the extra equipment on a 997 would generally bring long term repair costs to about the same level as a 993 (assuming no warranty on either car). I would love to know more about this topic as my 997.1 ownership has been short and I have never had a 993. I do plan on driving a 911 a long time so long term repair costs are really what matter to me. By the way, the 993 I am currently targeting has about the same mileage as my 997.1 (low to mid 30k mi range).

It is also very hard to break this down into pure financial terms. Cars are emotional items, at least to me and some others. That being said I do want to keep my eyes open and be aware of what I am getting into.

Michael