Price crash

[Guest]

OK, Jason must be nursing a hangover.

Meanwhile, I have spoken to a former OPC dealer who confirms exactly what Simon says above, ie the costs Porsche incur to prep the car (respray front and rear spoilers, 4 new tyres, perhaps brakes and a full service , alloy refurb and valet etc) plus their fierce profit margin, force the offer price down considerably.

But we did not get into the 996 market for profit. It was just a love affair. But an expensive one! A new engine (cracked crank casing, documented elsewhere on this forum) which Porsche refused to accept liability for, a flooded interior and failed central locking system, an PFS estimated future value of £36K which turned out to be £27K and left us with a huge deposit to find for the next one, and now this £19K devaluation in 8 months. Unsustainable, I am afraid. We have had a great time with the two cars, but we are unlikely to come back to Porsche.

 

[jason]

sorry - just been mega busy with work, and 3 kids under 5 don't help outside work - I'll come back soon as...promise.

 

[Richard_Hamilton]

I think we have to face up to the reality that these cars deprecite in exactly the same way as other prestige marques. As has been said, Porsche are no longer the specialist manufacturers they used to be, and the change that was required for the company to survive has resulted in a volume produced product. It is a different package than before but (although some air-cooled boys will tell you different) it is still a true 911.

All cars like this are going to plummet in value for the first three or four years before stabilising. It is the rule of supply and demand. When they reach a more affordable level (for chaps like me) then the supply of good examples matches closer to the number of potential purchasers. Most new car sales are made to companies, and the owners (sadly) do not care for them in the same way as a Porsche enthusiast. I paid 32K for my car 18 months ago, and it is probably worth about 27K today. 5K in 18 months - that's cheap motoring and a lot less than if I had bought a brand new BMW, Merc or Audi of similar value. Of course, I don't have a problem driving a 7 year old car and much prefer to drive my 996 than 30 grand's worth of anything else. It's nice to park your bum in a nice new seat, but I can't justify that cost to myself. I have probably been lucky, but the 996 has been a lot cheaper to run that the 993 I had before.

I don't deny that some people may have made money on older model Porsches, but there are a lot who have had their fingers burned by speculating with these cars as investments. Certain models of the 996 have held up well in value, the Mk1 GT3's being a good example, but these weren't volume production. At the other end of the scale I have a friend who bought a GT2 two years ago. He has done 5000 miles in it, and lost about 50K. £10 a mile in depreciation alone! A loss of 40% of its value in 24 months!

I intend to enjoy my 996 for some while, until maybe I can pick up a 997, or late 996, after it has taken the major hit in depreciation. Although I could probably afford to buy a new 997 (albeit that I would probably lose my wife in the process) I really don't want to lose money at a rate approaching that at which I can earn it. Still, losing the wife might solve that problem!

 

[philippe]

Well worded Richard, i think you have hit the nail on the head. Only because i am driving a very similar car to yours and am going on the same train of thought as you, apart from i don't have a wife to loose.

If they are all dropping fast then buying a more up-dated one is all relative. Unless you are buying a high performance car to have a bit of fun for 1 year resell it after that time to use the money for somthing completly different, then there maybe some dissapointment


Phil

 

[Richard_Hamilton]

ORIGINAL: Adrian Fuller
- School fees are what really hurt, trust me on this
Adrian

Adrian

I've already had that drain tap on my bank account! My eldest daughter is at University now, which is cheap by comparison. The youngest has left school and doing an apprenticeship. Both were at private school, so I know your pain!

 

[philippe]

Good point, i went to public school so know what it is all about, well worth the money for my folks. Buying a GT would be nice and maybe for the future but my girl friend costs me a fortune. (joke) I have a business and am trying to expand slowly so 996 that is 7 years old is enough out of that kittly for the time being, i am 32 so have a few more years to drain everything with newer 911s school fees and a wife, not a bad problem to have, chaps?



Phil

 

[Mark_Bennett]

ORIGINAL: James Keith Starkie
... saying I was walking round Burnley eating a pie! Different world eh?

You're not that bloke in the advert are you? []

 

[carrera4boy]

Agree with Berny.

Average price of an 02 996 is say £40k. Keep it for 10 years and sell it for £10k. that's £3k a year depreciation plus running costs.

Those people that buy relatively new and sell relatively quickly will make a loss. People who buy for the long term should do fine.

So i'm going to sell mine in 2009. And with my £9k per year car allowance from work and rebate from the tax man i should make profit!?? Or do you disagree?
Simon

 

[blueSL]

My situation mirrors everyone else's. Bought a C4S for 59k last November, 18 months old, already down from invoice of 77k, seemed a good buy at the time. Just swapped for a 996 TT, got £45.5k p/ex, now listed at £52850, so there is the 6k profit + costs. Actually should have gone directly for the 996 TT which I intend to keep until a 997 TT is available but even then I'm not sure I'll buy - I'm one of few people who do not think the 997 interior is an improvement on the 996, hate the steering wheels.

I think the only way to run cars like these with minimal depreciation is to be in there at the beginning of each model and keep them for 6 months, skipping from Porsche to Ferrari to Mercedes to Aston, but there's always a risk of catching a cold. I have a deposit on an AM V8 buy way down the list and I don't see my turning it into a real car.

The comment above about the market being flooded with s/h 360s is correct. I have a 10 year old 355 but the downwards pressure of the 360s has started the 355 depreciating again after I thought it had plateaued.

 

[Richard_Hamilton]

IMHO I think quite a few people will catch a cold with the AMV8. AM have built a brand new production facility at Gaydon for the V8, and are doing just what Porsche did with the 996 - turning to volume production. They will have to produce large numbers to get down to a price to compete with 911 sales, which seems to be their target market. In a couple of years there will be a lot of second-hand cars on the forecourt and prices will drop accordingly.

 

[garyw]

They aren't planning on building that many AMV8 to try and combat the price drop, so it can be compared to the 911.
Had a call from the OPC to see if I was still interested in the 997TT as they were starting to firm up orders and cancel those no longer interested..(clearing the books).
July 2006 was there expected delivey date..[]

garyw

 

[Rotorhead]

ORIGINAL: Richard Hamilton

IMHO I think quite a few people will catch a cold with the AMV8. AM have built a brand new production facility at Gaydon for the V8, and are doing just what Porsche did with the 996 - turning to volume production. They will have to produce large numbers to get down to a price to compete with 911 sales, which seems to be their target market. In a couple of years there will be a lot of second-hand cars on the forecourt and prices will drop accordingly.

Agree absolutely.

There will be a brief window when people may be able to sell their cars at a modest premium, but it won't be long before the Sunday Times classifieds are full of new/nearly new cars for sale.

Furthermore, with a brand new model, built in a new factory, there are likely to be quite a few niggles and teething problems. I'd rather let them build a few for a while and let the first year's customers complete the development programme.

And, I bet it's nearer £90,000 when it's fully spec'd.

It does look great though. But it's only a 2-seater - No one has yet achieved the 911's magic formula.

Which is why, despite recent price drops, really good 996s will always be desirable and I think prices will stabilise. If you've got a 996 keep it and enjoy it. You would have to spend a huge amount more to get something better.

 

[jason]

Great - I come back and you guys have pretty much said everything I was going to say[]

New Porsches will always lose money in the first 4-5 years and to be honest if you haven't got money to burn you are better letting the newer models bed in for 3-4 years anyway as there will always be niggles and issues on new models that need sorting.

Then when you buy, if resale or depreciation is important to you, then make sure you buy sensibly - the right colour combinations and the right models that will always have enthusiasts meeting the demand half of demand and supply.

There will always be a strong market from the enthusiasts for widebodied cars, gt's, rs's, turbos etc and far less for Targa's and cabs.

Just look at the 993 prices - turbo's, RSs and GT2s are through the roof and the 996 equivalents plumetting.

BUT the 996 equivalents will get to a level and the enthusiasts will keep the prices there - providing there are not huge numbers of them (you can't really compare a 993 gt2 and a 996 gt2 now can you...).

To be honest I'm not a big 996 fan but if the prices of GT3RS's and Turbos fall below that of 993 equivalents then for good conditioned cars that is just plainly stupid...and I might even be tempted!

Whatever, if you can afford a nice car when you buy it then go and enjoy it - you only live once[]

J

 

[Guest]

ORIGINAL: tripe

Sadly I fear that the 996 is heading for 928 territory, i.e. £70k new 10+ years ago for a fantastic car, now available for sub £10k and an absolute bargain for the enthusiasts out there.

How true.

I don't see anything happening in the market to suggest that cooking 996 prices are stabilising, they are still coming back same as ever and will do for years to come. Imagine what 996-in-oversupply prices will be like when there are 5 and 6-year-old 997's and Caymans/men up for grabs, and 993 values (including the Targa which I think will defy any dire predictions) are back on the up? The clever/enthusiast money will go on ultra-gorgeous 997 or appreciating 993, and vanilla 996's will be stuck between a rock and a hard place, with nowhere for values to go but down.

And how will the 996 wear its age, what will the maintenance costs on a 12-year-old example be like? Will all the independents be catering for them? Will all the parts be available? Will specialists buy the tools required if prices are still falling?

As for where they will settle, just look at cooking 964 values, still coming back, mainly due to a reputation (deserved or not) for high maintenance costs. I was talking to an OPC Service Manager yesterday who said that the 964 is the most expensive 911 to maintain bar none. Didn't think to ask him how he thought the 996 would stack up, that will be my next question.

Taking the issue of possible maintenance costs into account then, 996's could ultimately be the cheapest used 911's ever...and air heads probably still won't want one [8D]

 

[Rotorhead]

What a load of old codswallop.

As with all Porsches, some will be run until they become uneconomical to maintain, and then inevitably be dismantled for spares, whilst others will be maintained and cared for, continuing to run indefinitely.

The best examples of all the 911 variants will always be sought after, and the 996 is no exception. Prices can only be compressed so far.

 

[tripe]

ORIGINAL: oliver


As with all Porsches, some will be run until they become uneconomical to maintain, and then inevitably be dismantled for spares,

Well I don't know about that. Take a look at an old 2.7 impact bumper 911 models - hardly a car to set the worl on fire, and probably worth about £1,500 for an old dog - it would cost pretty much the same to restore as a decent 2.7 MFI Carrera, but because it's a Porsche from the days when provenance counted for something you'd be hard pressed to find any example for under £5K. The same goes for basket case 356 models. Why? Limited supply and perceived quality I suppose. People still buy them for more than they're worth and chuck daft cash at bringing them up to scratch - a question of pride?

The 996 on the other hand - a different story. Loads sold and with the advent of computerised engine management etc servicing is beyond the scope of most enthusiasts and even independent specialists without the right kit (I spoke to one long long established specialist yesterday who told me that they only work on models up to the 993). Sooner or later this glut of cars is going to be passed on to owners who can't afford £5K+ for a new engine if the RMS gives up. The market will dictate the prices, let's wait & see eh?

 

[Michael Downing]

ORIGINAL: tripe
I spoke to one long long established specialist yesterday who told me that they only work on models up to the 993

So he's content to base his business plan on a shrinking market, then? []

 

[Richard_Hamilton]

ORIGINAL: tripe

1) Well I don't know about that. Take a look at an old 2.7 impact bumper 911 models - hardly a car to set the worl on fire, and probably worth about £1,500 for an old dog - it would cost pretty much the same to restore as a decent 2.7 MFI Carrera, but because it's a Porsche from the days when provenance counted for something you'd be hard pressed to find any example for under £5K. The same goes for basket case 356 models. Why? Limited supply and perceived quality I suppose. People still buy them for more than they're worth and chuck daft cash at bringing them up to scratch - a question of pride?

2) The 996 on the other hand - a different story. Loads sold and with the advent of computerised engine management etc servicing is beyond the scope of most enthusiasts and even independent specialists without the right kit (I spoke to one long long established specialist yesterday who told me that they only work on models up to the 993). Sooner or later this glut of cars is going to be passed on to owners who can't afford £5K+ for a new engine if the RMS gives up. The market will dictate the prices, let's wait & see eh?

1) I think you are talking about mainly hobby and retirement projects here, and people will lavish all sorts of cash on old Porsches (and other makes) without any thought of the cars eventual value, just for the satisfaction and pleasure of the restoration.

2) I seem to recall my 993 having Motronic DME. So does that mean the 993 is doomed as well? Oh, and a weeping RMS has absolutely no proven link to engine failure.

They are cars, for goodness sake, to be driven and enjoyed. They shouldn't be considered as investments.

 

[SEE YA]

Hello all I have watched prices on 911 for the last two years. I know what I am after is only a 911/930 turbo black 87-89 model. But people are still being greedy and asking silly money for there 911 even late 80's one, like the one I am after. After four very poor PPI's on so called good ones I know how much junk is out there.

I could be wrong but the market has gone dead and people will have to drop the prices to sell their cars. Still looking myself for a good one.

SEE YA

 

[tripe]

I'm not going to disagree with you. Drive mine like I stole 'em every time! And let's remember the price of unit trusts can go up as well as down!! Just lucky that the only speed cameras we have up here are mobile and they have to post their locations in advance on the internet so we can plan our journeys!

Going back to my earlier comment about 928 territory though, have a look on eBay or in the Autotrader and you will find loads of examples of tired unloved 928s languishing outside on drives, going for a song in various states of disrepair. Abandoned because they are just too complex to attempt to fix or the cost of doing a decent job is astronomical (new fuseboard - £700 Sir). I fear the same for the 996. Early 911s don't seem to get the same treatment - as you say satisfaction and pleasure, but also within the capability of a competent home mechanic. The 993 is considered by many to be the last of the 'proper' 911 models and there were relatively few built so maybe they will be cherished just that little bit more. It's an old joke hijacked for this thread but the only way to make a small fortune out of a new Porsche is to start with a large one.

You pays your money, you takes your choice. If you want new cars you have to be prepared for depreciation.

As to that specialist not working on late model cars, that's his look out.