Rico's997

AWESOME!!!!

3Series

My assumption, the 2012's were still under new car warranty and not considered a "late model". Once you get out of the new car warranty, depreciation slows down.

Double_J

Am I missing something? The trend line shows that cars with 30,000 miles would be posted for sale at about 52% of the original price. Assuming an original price of $100K, that would represent depreciation over those 30,000 miles of about $48K, or $1.60 per mile.

Perhaps a decimal point issue? $0.18 is way too low - this would say that a $100K car with 50,000 miles would still list for $91,000 on the used market. Clearly not the case.

wjk_glynn

Hi Double_J,

I'm specifically focused on the effects of mileage in that particular set of cars (i.e. the set of used 997.2S coupes I saw on the market in late 2016).

The trendline implies you'd see the following asking prices vs. mileage:

• 54% of MSRP @ 20K miles
• 42% of MSRP @ 86K miles

That's a 12% reduction over 66K miles. If the car was $100K, then 12% of $100K over 66K miles is ~$0.18/mile.

So let's say you have two 997.2 S coupes

• Each with identical $100K MSRP
• But one had 15K miles more than the other (let's say 60K miles vs. 45K miles)
• The trendline would forecast a $2,700 (i.e. 15K x $0.18) difference in asking price between those two cars
• That isolates the effect of mileage on asking price.

Looking at the extremes on either end...

If you project the trendline back to 0 miles, it intersects at ~58%. Now I don't believe it would remain linear all the way back to 0 miles, but let's for the purposes of discussion assume it does.

That implies the cars have depreciated 42% (i.e. 100% - 58%) simply because of age. And then you layer in on top the effects of mileage (as discussed above).

But does it actually remain linear all the way back? Probably not. I'll bet there'd be a non-linear increase as you get below 10K miles.

And on the other end (e.g. 150K+ miles), there's probably a natural price floor for servicable cars, and hence the trend would be to flatten out.

But for 997.2S cars in the 30K-to-80K mile range, I think the $0.18/mile is a rough rule of thumb to forecast the effects of mileage on asking price.

Karl.