Price crash

[Guest]

ORIGINAL: oliver

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.

996 prices are not being compressed, nothing is squeezing them, they are quite happily falling all on their own. There is no such thing as price stability in a buyers' market and these are the conditions faced by run-of-the-mill 996's, F360's or whatever you care to mention at this point in time.

The price of anything is all about two things: supply and demand. How much demand are people anticipating for 10+ year old 996 C2's in the years ahead? All the independents I talk to tell me that the demand will not be there for the cars that have yet to come to market, thus prices for average cars will continue to come back. Only when demand begins to outstrip supply will prices turn and that is a long way off for lots of 911's.

Average early Boxsters now trade at £13k or less for standard mileage and they were £40k new. Rest of the vanilla moderns, including the 996, headed exactly the same way though at varying rates. 15 per cent has come off book trade on a half-mile 99V 996 C2 in the last 12 months and it won't be much less than that in the next 12, possibly less for the 12 after that, which will take book trade to just under the £21K mark in 24 months, and I know a few traders who would say that is a bit generous (the cynics).

Happy to have a beer-money-bet with anyone on this and equally happy to be proved wrong, though that's not gonna happen [8D] lol

 

[Rotorhead]

Of course prices are being compressed.

It's the volume of new models that are pushing down the prices of used cars. For example, the new 987 Boxsters , which are typically £35k - £45k new, have made it very hard for anyone to sell a late 986 Boxster, so prices have fallen below these figures. This has a domino effect on the prices of earlier models until, as you say, an early 2.5 can be bought for £13,000.

But the Boxster, even an early one, is still a terrific car, so it opens up the market to someone who might have otherwise bought a 964, Carrera 3.2 or 968, thereby compressing the prices of these cars, which in turn will compress the prices of 911SCs, 944s etc. The rubbish cars will fall out of the market and the prices of the best examples will firm up as they become more scarce.

This isn't unique to Porsche, it is happening across the market.

With regard to what will happen in 10 years time; well that's all pure conjecture. The chances are that road pricing and the price of oil will be the major influencing factors and, from what I read, it doesn't favour our (esp China and the US) current rates of consumption.

In the meantime we should enjoy our cars, afterall it may never happen.

 

[Guest]

The words are different but the scenario is the same. You are saying prices compress and presumably also decompress, I am saying demand comes and goes as cars enter and exit price ranges.

Supply and demand patterns and therefore future values are not conjecture, we are seeing differing levels of demand right now and the people that will be selling the cars in the future are already expressing a negative sentiment towards the 996. The only way to get past the trade BS on what they do and don't want is price.

993 and 996 prices both coming down but some traders are paying well into book on decent 993's as the supply is patchy while demand remains steady (though not off the scale). I don't know of one trader who has paid into book for a 996 this year regardless of condition. Nice condition is close to or at book, anything else way off..

It's the eternal seesaw of supply versus demand. When it comes to price, that's all there is.

 

[Guest]

Whilst it is unfortunate and irritating to see what you have bought depreciate, it is the way of things.
Buy what you like, drive is as often as possible, then sell when you are bored with it.
Take what happens on the chin. Cars are not an investment.
If you buy something rare, you don't want to use it and are scared of having it stolen - so you can't win.

We're heading for a recession, so prices of everything are sliding.
Things are only worth what someone will pay for them.

 

[Richard_Hamilton]

Very well said - my sentiments exactly.

 

[Peter_Bull]

Well said Stuart!
Whats the point in all this doom and gloom. Just get the damn thing out and give it a blast - that'll put a smile back on you!
If people are that worried about residuals, then I suggest they sell up now, cut their losses and let the rest of us enjoy enjoy our 996's (and 986's) in peace!![]

 

[juliany27]

Quite right Peter.

Any car is worth only what the owner or someone else is prepared to pay for it. A car is a commodity and the laws of supply and demand apply toa Porsche as much as any other 'consumer' item.
The whole point of a car like this, be it 911, 968, 924, 944 or Boxster is to get out there and enjoy an exceptional driving experience. If an owner buys a car like that as an investment then he [or she] might as well put it into an air conditioned garage and never use it, hoping for that day when its' value will exceed what was paid allowing for inflation etc. Alternatively, and instead of a mere pipe dream of future riches, the car could be used for enjoyment. Very few cars ever appreciate in value over time.

A Porsche is for driving, for goodness sake!

 

[Guest]

Sorry, having started this topic I feel obliged to butt in: I don't see anyone here saying they bought their 996 with a view to make a profit out of it. We were talking about the alarming rate of depreciation, not depreciation v profit.

Sorry, do carry on. Excellent debate so far.

 

[blueSL]

The population of 911s is increasing because more cars are added each year than are scrapped for whatever reason. At the same time, that body of drivers world-wide who might consider 911 purchase is probably decreasing - the baby boomers are moving towards retirement, the 911 might be thought of as an old design with lots of newer alternatives to choose from, the 911 might also be seen as too commonplace and there may be other demographic factors involved.

All that means too many cars chasing too few potential owners and the only thing for prices to do is head south. When that happens, the impact will be greatest on the least desirable cars, so that yellow early 996 with patchy history, scuffed wheels and in need of a respray is going to suffer.

Porsche has a problem keeping the 911 a must-have object of desire when everything else is taken into account and I think the Cayman is only going to hurt 911 sales, both new and resale.

 

[Rotorhead]

ORIGINAL: blueSL

.... At the same time, that body of drivers world-wide who might consider 911 purchase is probably decreasing - the baby boomers are moving towards retirement......

Actually, I think the reverse is true. The 911, in most of its variants, is still hugely desirable and no one else has yet matched its clever 'formula'.

The 911 is the world's most successful junior supercar, with a racing pedigree, classic design, superb engineering, extremely practical for every day use, fabulous performance, handling and brakes, reasonably economical to run with pretty robust trade-in values and, from the 996>, a decent 2+2 configuration. Nothing else is as enduring and there is still a huge market out there of people who want to own a 911, whether new or used.

The Cayman will be a success, I'm sure, but it will always be a junior 911/up market Audi TT, and it won't appeal to everyone.

I agree that Porsche need to get the supply levels right and, yes, they will lose some customes who want greater exclusivity. The present price softening is an industry wide problem for which over-supply is a significant contributor.

There was a time when we used to have a 'boom and bust' economic cycle that cleared everything out every few years, so supply never got too great. Now the economy seems to be less volatile, with 'soft landings' rather than deep recessions, so the malaise may continue for a while.

But do keep this in perspective. A 2002 C2 996, for example, that was c.£60k new, and now worth c.£40k, has only depreciated by 12.5% pa. Hardly a 'price crash'.

 

[Johnny C]

I just sold my '86 911. Cost me 20K with 70K on the clock 7 years ago, sold it for 10K with 200K on the clock and I reckon another 100K to go mechanically if the new owner looks after it.

I can't think of many other cars which would have only cost me that in depreciation for 7 years and 130K trouble-free miles. And I wouldn't have had 1/10th the fun!

A lot of what has been holding 2nd hand prices up for the last 5 years has been demand from people remortgaging and buying their dream car from increased value in their property. That bubble has more or less burst now, so 2nd hand prices are going to drop.

 

[SEE YA]

Hello, I agree good for me as still looking for a good 930 so much junk out there.

SEE YA

 

[Guest]

Porsche depreciation! You'd be scared with BMW depreciation. Comparing a new M3 vs a '99 C4 last year I checked out a '96 M3 to see how things would go if I decided to hang onto the car. Something like a 75% drop in 7 years......crazy. Went for a 993 .... (from an OPC) because I liked it and it was a lot lot cheaper than a 996 back then. When facelift 996's get to £25K - £30K I'll be in the queue - great cars, great bargains. It's not just the air cooled noise & smell that makes a 911 a 911, it's the way it rides, steers, stops and feels - that still makes the 996 a 911 worth having.

 

[mwadams]

Facing the possibility of the business I work for closing I looked into how much I could get for my 996. Typical trade figure given was £21K, with a retail on the forecourt of £25K (independant specialist); whilst I accept prices do fall I was shocked as to how much 996's are falling (especially in 6 months of ownership). Whilst I did not buy the car to make money, it woud good to think that you can pay off the loan faster than these prices are falling !!!
Surely the 996 prices will bottom out ?
I hope so !
Mark

 

[Guest]

Mark,
The 99 C4 I looked at 18 months ago was up for £45K at the OPC - only a year newer than your 98 C2..............?

 

[Guest]

I have had a wanted ad on here for a while, and I was seriously looking for something post 2002 for £40k. I am confident that I am looking around the right price, but I only had one contact.
The sad thing is that I genuinely wanted to buy a car and was prepared to move quickly for the right car.
Particularly sadly, I am going to spend my money on something non-porsche and consider looking for a porsche again in the new year.
Can somebody tell me how the trade get cars, when they are prepared to pay less that I was prepared to pay.

I suppose this leaves me somewhat disillusioned.

 

[TopBear]

ORIGINAL: woodlands

I have had a wanted ad on here for a while, and I was seriously looking for something post 2002 for £40k. I am confident that I am looking around the right price, but I only had one contact.
The sad thing is that I genuinely wanted to buy a car and was prepared to move quickly for the right car.
Particularly sadly, I am going to spend my money on something non-porsche and consider looking for a porsche again in the new year.
Can somebody tell me how the trade get cars, when they are prepared to pay less that I was prepared to pay.

I suppose this leaves me somewhat disillusioned.

Obviously I don't know the specfics of any transactions you were dealing in.. but I'd guess that seller's perceptions are that dealing with the trade is 'safer' and easier than dealing with a private buyer, and the potential problems that can arise. The extra risk involved in dealing with private buyers, test drives, high value transactions....warrants the slightly higher than trade buy/sell price?

 

[Rotorhead]

ORIGINAL: woodlands

Can somebody tell me how the trade get cars, when they are prepared to pay less that I was prepared to pay.

The 'trade' (and specifically OPCs) have a captive audience. When someone wants to upgrade to a new, or nearly new Porsche, they generally go to a smart glossy OPC. Most such people normally have a part exchange, need finance etc, and they find it more convenient to accept a low offer than to try and sell their car privately. In fact many people will be more interested in the monthly repayment figure than the true costs of the transaction.

OPCs now seem to be working on quite wide margins. Typically they will want to make a £5000 profit on the sale of a used 996, after all their preparation costs.

Buying privately at this level does require a great deal of care, but can lead to significant savings.

 

[Guest]

I agree with everything you have said, but, in the event that I had more than one interested party, I would have had the opportunity to actually testify about the test drive thing etc.
The fact that I had almost no responses only goes to show me that owners are indeed sucked into the convenience part by the dealership, and at the same time complain about the margins the dealers are making.

I personally will not buy from a dealer if possible, as I know that some dealers simply buy low, do a perfunctory valet/service/whatever, add a warranty (possibly) and sell high.

I was actually hoping that this forum would make it possible for some existing owner to sell their car at a price better than that offered by a trader, and at the same time I would get a good car. How hassle free could that be ?

Is that too much of a tall order ?

I have now bought something else, and will continue to watch the market. I cannot comment on whether or not I will actually buy a Porsche again, but there is always the possibility.

 

[dixhuit]

Interesting comments. Tried to sell me 997 S privately at £67,500 Jan 05 (£4k off the list) 3k miles.With no takers. Local OPC offered me £61k but rang around other OPCs and got £64k.
PX my 996 C4 Jan 02 Facelift with 10k miles when I bought the 997 and got £42.5k for it and it was still the current model !!
As I run them privately took the decision to buy second hand and older so have a 89 3.2 Supersport cabriolet with only 22k on the clock which only depreciated by my calculations 50% in 16 years or £1500 pa .Took some finding though. Strikes me that the more you pay and the newer the vehicle,the greater the depreciation. No comparison with my old E type convertable purchased 1985 for £4,500 and sold in the recession of 93 for £33,000 plus number plate at £3,000 now thats inflation !!!!