Sudden Massive Depreciation In Used Value

[Talisker]

Last year (2022) I chose to replace my fully loaded Taycan Turbo as it was less than a year away from the PCP contract ending. I asked what my trade in value would be and was offered £105,000 (25% depreciation over 2.5 years) by Porsche in Bristol, I was happy and ordered a new Porsche Turbo S.
Last week I recieved a build slot, not only had the price of the new car increased by over £8K, but the value of my car had plummeted to just £74K, almost 30% depreciation in 6 months! I was told the market was flooded with used Taycans. I cancelled the order and will stick with my old car for a few more years.

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[Dee]

If you don't sell the car you don't have any depreciation.

 

[Fish Fingers]

My opinion is used car markets are currently closely mirroring investment market characteristics of supply and demand. And EVs are like tech stocks.

It seems to me that a very fast correction has taken place in the used car market in general.

There was a (false) bubble post covid, with supply chain shortages etc and people sat on cash they couldn't spend. Used cars were valued higher than new only a year ago.

This year things returned to normal. BUT this has also coincided with the cost of living crisis/inflation/interest rate rises meaning orders plummeted.
So Tesla (followed by others) slashed the price of new EVs, depressing used prices further.

All of which has made the used EV market currently overshoot a normal correction.

I would imagine things will flatten out and approach normality next year.

I always reckon anything better than 50% depreciation over 3 years (10k pa) is ok.
Add to this my Taycan is 'saving' me about £5k a year in fuel/tax if I had bought say an M4 and it's still not too bad a pill to swallow.

Enjoy your Taycan OP.
I find my sensible head likes the thought of keeping things longer term as I get older, rather than always wanting the next new shiny.

 

[WuffvonTrips]

So the current value appears to be 53% of the price new after 3 years.
I've just checked an old (Nov'21) Porsche Finance quote I had for 3 years at 6000 mls p.a, which had an RV of 60.6% on a price new of £128k.
As yours is "fully loaded" and cost options generally retain very little RV, your numbers don't sound out of line with my quote (£78k RV after 18k miles, Turbo CT).

 

[Fish Fingers]

Similarly, my phone contract expired after 2 years recently.

It does everything I want and I don't see the need to spend £1k just to have the latest model.

Like many people now, I moved to SIM only and kept my phone and saved money.

I think this is going to happen with cars now, rather than people jumping into a new model every 2-3 years, spurred on by PCP at super low interest rates, at no extra cost.

 

[W1NGE]

Last year (2022) I chose to replace my fully loaded Taycan Turbo as it was less than a year away from the PCP contract ending. I asked what my trade in value would be and was offered £105,000 (25% depreciation over 2.5 years) by Porsche in Bristol, I was happy and ordered a new Porsche Turbo S.
Last week I recieved a build slot, not only had the price of the new car increased by over £8K, but the value of my car had plummeted to just £74K, almost 30% depreciation in 6 months! I was told the market was flooded with used Taycans. I cancelled the order and will stick with my old car for a few more years.

It is the norm (painful as it is) but 30% over 3 years is typical for most Porsche's (911s, GTs and Boxsters excluded) and its just front loaded these days rather than waiting 3 years. Still - you have 911s to keep your depreciation woes at bay!

 

[WasserGKuehlt]

I think this is going to happen with cars now, rather than people jumping into a new model every 2-3 years, spurred on by PCP at super low interest rates, at no extra cost.

In the US, the latest estimate is that vehicles are kept in possession for an average of 12.5 years. Just as we may have reached peak smartphone, we’ve probably reached peak (ICE) car in the 2010s. And EVs - rather the infra - aren’t there yet to provide the next reset and get widely adopted.

 

[j.w.s]

Last year (2022) I chose to replace my fully loaded Taycan Turbo as it was less than a year away from the PCP contract ending. I asked what my trade in value would be and was offered £105,000 (25% depreciation over 2.5 years) by Porsche in Bristol, I was happy and ordered a new Porsche Turbo S.
Last week I recieved a build slot, not only had the price of the new car increased by over £8K, but the value of my car had plummeted to just £74K, almost 30% depreciation in 6 months! I was told the market was flooded with used Taycans. I cancelled the order and will stick with my old car for a few more years.

Being only a little snarky, I call it a sudden massive reduction in the incidence of just stupidly high used car valuations. Things seem to be getting back to normal finally.

 

[Talisker]

It is the norm (painful as it is) but 30% over 3 years is typical for most Porsche's (911s, GTs and Boxsters excluded) and its just front loaded these days rather than waiting 3 years. Still - you have 911s to keep your depreciation woes at bay!

I'd agree with the 30% over 3 years which is what I was expecting but not over 50%

 

[Archimedes]

The price a dealer is offering you on trade is wholesale, not retail. You can’t calculate depreciation off of it until you add back in the retail margin, which is about 15% for dealer sold used cars.

Rates are up and the world is back to normal. Who’d a thunk it?

 

[npx]

Not meaning to sound insensitive, but just drive your cars folks. They're depreciating assets and always will be.

Not including if you put next to no mileage on it, you're not going to be bankrupted by the $5-8k less you'll get on trade/sale if you have 40,000 or 50,000 miles on a 4 year old car. And if you are, hate to say it, you probably shouldn't have dropped 100k+ on a vehicle to begin with.

 

[Talisker]

Not meaning to sound insensitive, but just drive your cars folks. They're depreciating assets and always will be.

Not including if you put next to no mileage on it, you're not going to be bankrupted by the $5-8k less you'll get on trade/sale if you have 40,000 or 50,000 miles on a 4 year old car. And if you are, hate to say it, you probably shouldn't have dropped 100k+ on a vehicle to begin with.

I think we all know they are depreciating assets, however, they are still assets which at some point will be sold. I have been driving Porche 911s for many years and never experienced this level of depreciation, despite various economic recessions. I am merely alerting other Taycan owners and potential owners that the Porsche golden days of low depreciation are over.

 

[gusone]

Digging that garage. The cleanest and biggest ever

 

[magnitude]

Serious question: What's the reasoning behind selling a pristine Taycan Turbo and replacing it with a slightly newer Taycan Turbo S?

How does that make sense, financially or otherwise? What am I missing?

 

[Talisker]

Serious question: What's the reasoning behind selling a pristine Taycan Turbo and replacing it with a slightly newer Taycan Turbo S?

How does that make sense, financially or otherwise? What am I missing?

Money, firstly it's a company car and in the UK, the taxation is extremely beneficial for Company EVs, this is likely to change in the coming years, whereupon I would want to own it privately, rather than pay massive amounts of tax.
And, if I were to own the car privately, I would rather buy a 3 year old car than a six year old car. I ordered my current Taycan before the launch and certain features were not available such as HUD and Sport Turismo etc. With the >£8K increase in price between ordering and getting a build slot had me doubting the decision ro reorder, the 25% depreciation in the last 6 months, finished it. Whilst I'm fortunate enough to afford the loss, it still doesn't sit well and I wanted to make other current and future Taycan owners aware.

Traditionally, the low depreciation of Porsche cars made me loyal to the brand, coupled their reliability, if the former is no longer the case, I'd consider buying one of the other higher depreciating brands.

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