Value drop management - Porsche Macan Forum
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post #1 of 17 (permalink) Old 07-16-2019, 08:21 PM Thread Starter
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Default Value drop management

These nice toys drop in value quickly. How do people manage this? Do you keep you car for only a few years then flip it, or keep it for the long haul and just wear the diminishing value. I assume lux car owners are likely smarter or more business minded than many so would be keen to hear how you manage this. How long will you keep it, what then, and why then? Keen to learn from the best!

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post #2 of 17 (permalink) Old 07-16-2019, 08:36 PM
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I don't look at this car as a toy. It's a utility tool that's made to be used.
I put 186,000 miles on my last car, a 2012 Cayenne that I bought new. I sold it and bought my current Macan.
It's a fun and speedy tool though!
(BTW, I'm looking forward to spending a few weeks in Port Douglas at the end of July!)
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post #3 of 17 (permalink) Old 07-16-2019, 08:55 PM
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First post here, but I'll bite.

Cars are melting ice cubes of depreciation - you're always going to be exposed to /some/ unless you've got a true collector piece (read as hundreds to low thousands produced) and you only have collector levels of miles on it (read hundreds to maybe a couple thousand), AND you're in it for the long haul. Even cars that are 10+ years old and have appropriate mileage from continual use will depreciate with declines in condition and increases in mileage.

Point 1: It helps to buy right - i.e. as cheaply as possible. Every market is different, and especially in Australia you're exposed to tons of markup and duties that folks in other parts of the world aren't. Getting as much of a discount as possible if you're buying new is important.

Point 2: Acquire based on the horizon of depreciation you're comfortable being exposed to, and in the most tax-advantageous way possible. Leasing in many countries around the world allows for you to write either a significant portion or almost all of your expenditures on the car. In Australia, novated leases are a very attractive way to bundle any car allowance your employer offers along with all of your other costs. In most states of the US, if you understand how much you expect to drive the vehicle and you prefer to have new ones every couple years, leasing makes a ton of sense - because you're only paying the sales tax on the portion you use, and you're essentially "locking in" the amount of depreciation you're exposed to.

Point 3: Use every incentive in the financing scheme available - High volumes of unsold units in model years close to changing over will get the manufacturers applying incentive dollars to get the vehicles transacted against. Security deposits (even if not required) placing available cash as refundable collateral at the end of lease term can significantly lower the effective interest rate during the term of the lease. Research the options available to you thoroughly and use every one of them that you can.

Point 4: Acquire somewhere lower on the depreciation curve from new - Letting someone else shoulder the burden of initial depreciation is just smart. Sure, it's not "new" but do you /really/ care? This may exclude you from using leasing, depending on what local leasing companies offer - for example in the US most used car leasing costs significantly more than leasing something new.

Point 5: Have more than one car, and don't drive too much - Mileage is the only factor in depreciation under your control. Yes, the whole point of _having_ these things is to drive them, but if you're concerned with depreciation, the only true variable in your control is keeping mileage down or spreading it around.


Most of this holds true for exotics, though many of those manufacturers offer different programs to high net-worth individuals that incent repeat acquisition. Hope this helps.
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post #4 of 17 (permalink) Old 07-16-2019, 09:44 PM
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Good points there, @limbo . Thanks for jumping in -- and welcome to the forum.
Have a Macan? Thinking of acquiring one?
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post #5 of 17 (permalink) Old 07-16-2019, 10:11 PM
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After the https://www.macanforum.com/forum/members/boredbold.html story I am now terrified of running my Macan after the warranty runs out. His story dropped a bomb that was half the value of his car on him. Either I have to buck up and buy an extended warranty or convert those bucks into a down payment for another car/truck. On one hand the extended warranty dollars follow an old car down the depreciation chute but on the other hand putting those bucks into a new rig just starts the accelerated depreciation all over again. Otherwise, it is sleepless nights waiting for the transfer case to die or the PDK to fail or the air suspension to get a flat or in boredbold's case a destroyed engine. Another lousy option is to buy my 29 year old Pathfinder back from my girl friend.
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post #6 of 17 (permalink) Old 07-17-2019, 02:48 AM
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Quote:
Originally Posted by FLDavid View Post
Good points there, @limbo . Thanks for jumping in -- and welcome to the forum.
Have a Macan? Thinking of acquiring one?
Just acquired a MY17 GTS for daily duty. Liking it so far, researching All The Mods (tm)
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post #7 of 17 (permalink) Old 07-17-2019, 06:53 AM
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With few exceptions if you tend to flip cars, in the end you pay dearly for the privilege.

Best way to minimize depreciation expense is to go CPO with the great warranty, maintain the car well, and keep it for a long time.
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post #8 of 17 (permalink) Old 07-17-2019, 07:56 AM
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I think we all are keen business people, otherwise we could not drive our P-cars. But everytime I trade in my cars, It feels like it is the most stupid transaction I could perform business-wise... But then the ❤️ kicks in and I lose all my Keen Business Sanity and enjoy it!

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post #9 of 17 (permalink) Old 07-17-2019, 08:28 AM
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Like age & death - depreciation/value loss are facts of life.....
little you can do to alter the path....

Not to say we don't all try !!!

I buy Demo's CPO's . less than 10k miles...
that eases the pain somewhat
I have taken to a 5-6 yr trade term... I keep them longer than I used - but I drive less too.

The biggest drop comes at the front -- it eases as time goes by.... but a drop, nonetheless
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post #10 of 17 (permalink) Old 07-17-2019, 09:22 AM
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I usually trade a vehicle in after two years or so...cars are toys to me, I get bored easy, and I always want the latest shiny new toy that comes out.

That said, I actually still like my 2018 Macan GTS, and I just might keep it longer than two years, but will definitely trade it in before the standard warranty expires.

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