Aaaargh...depreciation

AlexW · 8 May 2007

Reet then. I have put down the deposit for brand new 2.7 Boxster. Not decided on kit yet.The whole experience so far has been really great, been well treated etc etc.The only issue that is doing my head in is the whole residuals issue.My plan is (or was, subject to an email...) buy new. Keep for 3 years and sell on avoiding the 4 year service and the whole 'the older a sports car is the more it costs to maintain'. Finance this through a PCP arrangement with the equivalent of a 6k deposit. After 3 years sell on and the Porsche will of kept 65% of its value leaving me with 5500 for the next deposit for another 2.7 or maybe a 3.4 or even a Cayman.Sounds fine to me.However more and more everywhere i read the issue of dropping residuals is creeping in. So with that in mind i'm a bit confused and looking for some sensible advice. The above plan came from a work colleague who has done the same for 3 boxsters in a row and made sure he got his deposit back each time to invest in the next car.However, would it be better to treat the new one as a keeper and just never get rid of it? Or accept that it wont sell for anymore than 50% of its original value in 3 or 4 years? Or is the original plan still a sound 'un? The monthly payments arent really an issue in PCP or any other finance.Reading so many conflicting views on depreciation has left me a little confused. I assumed i would get 65%+ of the cars value back in 3 years time which is why the original plan sounded good and it works for my colleague as i say.All advice very welcome!

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Robertb · 8 May 2007

It has to be cheaper in the long run to buy a car, and keep it for yonks. Then the max you can lose is your original purchase price + maintenance... the cost of a 4yr service is nothing compared to the cost of upgrading your car to the next one.

No question the biggest cost of a car is depreciation, and a car enjoys (?) the most depreciation both in £ and % early in its life. So, the fewer times you ride this part of the curve the better for your wallet IMO.

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tobyholly · 8 May 2007

...............or buy a good 993 and suffer no or next to no depreciation.......................

..............sounds fine to me!

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alan sweeney · 8 May 2007

Hi Alex,

You are in reality asking a question about the future which any business man would like to know the future :wink:
.

The climate is interesting at present with the amount of consumer debt, interest rate increases and the housing market variance. Residuals will vary on the vehical depending on spec and consumer disposable income, however both 911's and Boxsters have a good track record for low depreciation in fact I read one article that stated the Boxtser is better than the 911 in that regard.

To make you feel better with respect to my C4S which was purchased at an OPC at 3 years old ie 2003 plate last March, has depreciated circa £12,000 in the 14 months I have had her. Nearly as much as the depreciation loss from buying new.

The depreciation is not something that was a deal breaker to me, it is a reality and one hopes it is not too painful! From my experience 4 years seems to be the max threshold for reducing the painful depreciation presently. May be worth while looking at a 4 year old Boxster. Either way enjoy the car.

Regards Alan.

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Porsche · 8 May 2007

Alex, 1st line, got as far as the 2.7 Boxster then it all went wrong

in all seriousness Boxster values have always been strong, for the 1st 4 years they were bullet proof but now they are still strong but you will loose some money, still the best of the market

and IMHO a new 2.7 is an 'ok' buy if the price stays close to £35k, right now used values are very strong this time of year, so even finding a used model could be tough.

Downside is the power as the 2.7 is a weedy engine and IMHO feels very slow.

The older car issue doesnt work nowdays as variable service intervals means IIRC can be up to 12-18k apart, so with Porsche deisgn at a snails pace the 2.7 will be around for a while, although depending on your budget what are your options?

So does it have to be new or are there options ??

regards

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AlexW · 8 May 2007

Well to be honest Im looking at the 2.7 as the entry level.

Coming from a Corsa the 2.7 certainly feels sprightly!

When im older...3 years older in fact! i plan on trading in for a 3.4 or a Cayman S.

I know it will lose value. Im hoping for 65% come trade in, not an unrealistic hope i hope!

Extras are going to be sensible ones like heated seats, 18" wheels, partial leather, metallic paint, wind deflector and so on. Nothing ott, comes to about 36.5k all in.

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Robertb · 8 May 2007

Previous poster said:
Quote: Originally posted by tobyholly on 08 May 2007

...............or buy a good 993 and suffer no or next to no depreciation.......................

..............sounds fine to me!

I looked at a 993 Targa in 1998 which was £49,995... glad I didn't buy that!

Although saying that, I lost a sight more over the next 8 yrs buying other silly cars in the meantime til I got round to buying a 993 Targa.

Moral- buy the car you really really want, now, and keep it. In the long run, you'll save money. So, if you intend to trade up in time to a 3.4 Boxster or a Cayman really, then buy it now and save yourself one leg of depreciation.

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alan sweeney · 8 May 2007

Yep I am living in hope my C4S in 10 years will apprecate to more than what I paid being the best looking and all round 996 :wink:

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poon · 8 May 2007

what depreciation there is will be offset by your ability to charge for highlights and a perm :wink:

sorry couldn't resist

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sTTu · 8 May 2007

Previous poster said:
Quote: Originally posted by poon on 08 May 2007

what depreciation there is will be offset by your ability to charge for highlights and a perm :wink:
sorry couldn't resist

Thats cruel, leave the kid alone ! :twisted:
My experience of depreciation is that it WILL be more that you expect. If you have something desireable you might be okay but I've always worked on factoring in about an extra 20% on top of what anyone tells you to expect, that way you won't be disappointed.Also remember to build in the cost of finance onto your depreciation too, thats a fair chunk of money over 3-4 years.

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Maxie · 10 May 2007

Buy an early 987 2.7; after all, someone else has already taken the hit leaving you relatively unscathed. Financing - have you spoken to Jamie G yet? I understand a few on this forum have gone to him for their financing requirements as he seems to be quite competitive.

Downside is the power as the 2.7 is a weedy engine and IMHO feels very slow. - It's all relative. If you regularly drive a GT3, then of course this is going to feel slow to you. If you are driving a Corsa, then the base Boxster is a whole new ball game. My Targa feels like a Turbo Porsche to me but then it would coming from a VW Golf.

~ Maxie

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Rodders · 10 May 2007

Previous poster said:
Quote: Originally posted by tobyholly on 08 May 2007

...............or buy a good 993 and suffer no or next to no depreciation.......................

..............sounds fine to me!

thats the route I chose

I too was looking at buying a new 987/Cayman back in 2005 until I was asked by a friend..........what would you rather have sitting in the garage........a 911 of some description or a new 987/Cayman..........I thought yeah right enough most petrolheads want to own a 911 at some point in their life........why wait.........and not to mention the massive saving on purchase cost(I reckon I saved spending close to £20k more than I eventually did buying my 993)......ok you have more to spend on maintenance but at most in the 18 months of ownership I've spent just over £2k and thats including an OPC service/HIDs/Cup 2 alloys/RSR's but the grin factor is just worth that alone..........I also reckon at worst I've lost £5k depreciation if that...........I would have lost more than double that with the 987/Cayman S route IMHO

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Tiptop Topcat · 10 May 2007

IMHO there is only one way of hedging against depreciation on cars and that is to buy something that is rare and desirable. I don't think there are many new Porsches that fall into the rare category although there may be an argument that the Turbo and GT3 variants are there, at least for the short-term.

From the figures, I'd guess for your scheme to work you'd have to settle the finance at about 45% of cost when the car is worth 65%. Personally I think that is optimistic with the Boxster but if you time the sale right and the economy is okay, it might work.

Personally I wouldn't bank on it and suggest enjoying the ride might compensate for taking a less optimistic view.

I also wouldn't have thought it would be too long until Mr Jamie G was along to turn your plan into reality.

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Aaaargh...depreciation

AlexW

Silverstone

Robertb

Yas Marina

tobyholly

New member

alan sweeney

Montreal

Porsche

Donnington

AlexW

Silverstone

Robertb

Yas Marina

alan sweeney

Montreal

poon

Magny-Cours

sTTu

Spa-Francorchamps

Maxie

Yas Marina

Rodders

Magny-Cours

Tiptop Topcat

Albert Park

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