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probable model year depreciation, another example

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Old 04-15-2007 | 09:36 AM
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Default probable model year depreciation, another example

i have hit a couple of threads where the 06-08 jump in model years was causing some difference of opinion on what the late 06's were going to do as far as used pricing goes. allow me to relate what has happened with the only other car company i know that has pulled this trick. the 1997 mazda miata was basically the same car as the 96-94, known by the fans as the M1 (or M1.5 if you want to be precise). there was no model year 1998, the 97's were held over (sound familar?) and the 1999's (new body style) were brought out in 1998. then in 2001, a clean up of the 1999's (M2) problems was brought out (M2.5). i think we now know where porsche got their play book from.

anyway, lets look at the values of the cars now. i took the high end "M" edition for the 96 and 97, there was no comparable car in 99 and 00 so i took cars with the same options, in 01 i took a "LS" series car.

96 6995
97 7595 8%
98 ------
99 9255 18%
00 11450 20%
01 12430 8%

you can see while there is a pretty big jump between the 97 and the 99 (body style change), there is also a large jump between the 99 and the 00 (same car). from 00 to 01 the difference is back to the 8% jump that there was between the 96 and 97, even though the 01 is a more desirable car (it's the one i have ).

thus, looking at this, we can say that it would appear that the 99's were dragged down in price by the lack of a 98, the 00's recovered to the "normal" depreciation compared to the 01's.

the example breaks down at 01, because they were only an evolutionary upgrade of the 99-00, not the "total redesign" that porsche is supposed to come out with in 2010. however, i think from the example, we can gather that probably the used price of the 08's will drop rather precipitously to fill in the "gap" of the 07 model year. the 06's (no matter what build or sell date) will depreciate as an 06. the most desirable would appear to be the 09, until you get to the 10 redesign, then it starts all over again.

of course, mazda isn't porsche, they didn't dump a ton of 97's on the market to get the showrooms clear for the 99's.
Old 04-15-2007 | 10:41 AM
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not sure I agree with this example since the miata is not an apples to apples comparo with a truck that has much less of an enthusiastic following. time will tell.
Old 04-15-2007 | 01:28 PM
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Doing a quick guess, if depreciation for the 06 is greater based on a % of sticker price than say an 05, and one paid well below sticker price for the 06, it was probably still the much better deal depending on how much one got enough off of sticker price

For example, a person that paid close to sticker on say a $67,000 truck in 2005 model year will have more of a "depreciation hit" than someone who bought the same truck but an '06 model puchased in '06 or early '07 with a $67,000 sticker, but paid say $53,000. Add in the money factor (amount of cash tied up and charged interest) plus the tax applied to the $14,000 differential in this example, and it's even worse. In short I'd rather be one who decided to buy a leftover new 06 than someone who bought an 05 new even if the 06 had higher depreciation as a % of sticker price.

Of course this factors nothing for being the "first on your block" with the truck if purchased when they first came out (if that floats your boat....but as we see, that's an expensive way to be)

At the end of the day, a perfect analysis isn't possible unless you had the actuall purchase price of all the cayennes...someone who got $8,000, or $14,000 or whatever off the sticker probably still got a good deal ultimately...and I'm sure there were some that simply paid full sticker. Not everyone haggels...but now I'm getting onto another topic



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