Welcome to Normal Depreciation

[Redhot2474]

Anyone who paid over list price is going to be very upset when it comes time to trade/sell their Taycan (any vehicle really). I do not think the Taycan is depreciating any worse than the other luxury EVs.

I doubt it , they have monopoly $

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[f1eng]

I definitely now wish I had invested the money I used to buy my Taycan and used the investment to fund the payments on HP rather than buying it outright.
I intend to keep it 6 to 8 years though.

 

[TXSchnee]

I doubt it , they have monopoly $

For some Taycan owners, yes it is monopoly money. However there were people paying $10,000+ over MSRP on Kias here in the US, so in general people who paid ADM are really going to be unhappy when it comes time to sell/trade.

 

[mcr21]

The market it totally unnatural for Taycans. Such a tremendously good deal buying them NEW via a Ltd Company. The 4S arrived in 2020 and made it irresistible.
Buying a Taycan through a company for 100k is like buying one privately for 50k.
Buying them 2nd hand doesn’t work through a company so suddenly there is a huge glut of Taycans dropping on the second hand market after all the 3yr deals are heading back to the dealers. Not enough private buyers.

The value of the Panamera is currently holding up a little better because 3 year old Panameras are MUCH rarer because no one buys them because they are shit (compared to a Taycan)
Except for a few old Petrol Head Porsche fans with kids/dogs/golf clubs(yawn)

Not sure what you mean by buying 2nd doesn't work through a company (i.e. Ltd director/owner). The only difference to my understanding is that the Ltd has an annual capital allowance for the car at the 18% main rate instead of 100% capital allowance in year 1 for new vehicles.

My understanding is that you can't buy a second hand car through salary sacrifice though, if that's what you are referring to.

Also to add to the UK tax breaks - being able to expense everything related to the car on the Ltd (insurance, servicing, extending warranty, interest, most of the charging cost etc etc) really adds up over the years.

 

[annieland]

I agree with your larger point about expectations for depreciation and residual value, but I'd like to push back a bit here.

It's been decades since I studied economics, but (at that point, at least), there was no intuitively-defined unit to measure utility - how much enjoyment somebody gets out of something. They just had an arbitrary "util", so I decided to mentally define it as "the first sip of a cool beer on a hot day". However you measure it, though, utility is the fundamental concept that drives human economic activity, and any discussion about buying and selling cars that ignores it is (IMHO) fatally flawed.

I am very clear that I am fading virtually every tenet of conventional wisdom when it comes to buying cars:

• never buy new
• trim holds value better than options
• 1st-generation EVs will get slaughtered on resale due to pace of technological innovation
• there is a "facelift" coming next MY
• custom colors resell poorly (especially unusual ones)
• paint protection expense is never recouped

However, the amount of expected utility that I personally plan to enjoy from my time with the vehicle swamps any of that, and every single "bad" decision listed above directly increases that expected utility for me. I think that could conceivably be true for anybody, regardless of available disposable income (within reason).

It's the car for people who derive sufficiently high levels of joy out of owning it that justify foregoing all the other things that one could do with $150,000. Maybe this is just a semantic beef, and that's how you define "can afford". I view vehicle ownership more as a relationship than an investment, though.

Good God I am 5 out of 6 of those. Only one I didn't break is caring about a Facelift because I think the car is gorgeous as it is and I'm usually disappointed by the majority of car facelifts.

But here's wisdom I didn't ignore... a new car is not an investment!

 

[violuma]

Good God I am 5 out of 6 of those. Only one I didn't break is caring about a Facelift because I think the car is gorgeous as it is and I'm usually disappointed by the majority of car facelifts.

Thank you for the kind words. I am not a huge fan of that "facelift" word, but it seems to be conventionally accepted. I consider it a redesign, albeit probably relatively minor in the context of such things. In any event, it wasn't intended to be specifically about cosmetics.

I've basically had two cars in the 30 years since I moved back to the USA. The first was one of those 1984 Audi 5000s that got shamed by 60 Minutes. It was the first year of a new model design, and buggy as all get out. The second is the 1988 E28 in my avatar that has now racked up 350,000 miles. It was the last year of a model design and is still on its original engine.

So, as irrational as it probably is in the EV world, I went out of my way to seek out the last MY of the first run of Taycans, gambling that the 24s will benefit from all the refinements made over the last several years, while the 25s, even with whatever fancy new features they do have, will have some unexpected issues that won't reveal themselves until the vehicles have been deployed at scale.

Incidentally, I was not particularly enthusiastic about your Frozen Berry color when I first saw it in print. However, there was one in inventory at my dealer the day I went in to place my order, and it's sublimely lovely in person. Reminds me a bit of delicate yet intense cherry blossoms in spring.

The first time I see my own color choice on metal will probably be when I go to pick mine up, but I am really interested to get in touch with any other Viola peeps in the San Francisco area.

 

[Ross]

Not sure what you mean by buying 2nd doesn't work through a company (i.e. Ltd director/owner). The only difference to my understanding is that the Ltd has an annual capital allowance for the car at the 18% main rate instead of 100% capital allowance in year 1 for new vehicles.

My understanding is that you can't buy a second hand car through salary sacrifice though, if that's what you are referring to.

Also to add to the UK tax breaks - being able to expense everything related to the car on the Ltd (insurance, servicing, extending warranty, interest, most of the charging cost etc etc) really adds up over the years.

No salary sacrifice for me.
Just buy as company director.
You are right. It does work, just not as well! Of course if you can buy a demonstrator a few months old for £40k below list and you can convince youself that you were going to festoon your Taycan with £30k of extras anyway then that 2nd hand one looks good at the moment. Paying 33% less for the car in the first place certainly makes up for only getting £3,800 off your next tax bill instead of £25,000.
(Based on 25% corporate tax rate and new car being £120k and Demo being £80k)

 

[JWreck]

It’s only bad if you sell it.

As a commuter and family car, there’s literally nothing I’d want to replace my CT4S. My wife even asked what’s next and I was stumped. I said maybe a Taycan GTS ?

 

[mcr21]

It’s only bad if you sell it.

As a commuter and family car, there’s literally nothing I’d want to replace my CT4S. My wife even asked what’s next and I was stumped. I said maybe a Taycan GTS ?

I've decided to keep mine until 2.0 comes out, which probably will happen no earlier than late 2026. Assuming the next generation is as fantastic as we all hope it will be, I shall be knocking on my Porsche dealer's door to put in a pre-order as soon as the books open

 

[Fish Fingers]

I agree with your larger point about expectations for depreciation and residual value, but I'd like to push back a bit here.

It's been decades since I studied economics, but (at that point, at least), there was no intuitively-defined unit to measure utility - how much enjoyment somebody gets out of something. They just had an arbitrary "util", so I decided to mentally define it as "the first sip of a cool beer on a hot day". However you measure it, though, utility is the fundamental concept that drives human economic activity, and any discussion about buying and selling cars that ignores it is (IMHO) fatally flawed.

I am very clear that I am fading virtually every tenet of conventional wisdom when it comes to buying cars:

• never buy new
• trim holds value better than options
• 1st-generation EVs will get slaughtered on resale due to pace of technological innovation
• there is a "facelift" coming next MY
• custom colors resell poorly (especially unusual ones)
• paint protection expense is never recouped

However, the amount of expected utility that I personally plan to enjoy from my time with the vehicle swamps any of that, and every single "bad" decision listed above directly increases that expected utility for me. I think that could conceivably be true for anybody, regardless of available disposable income (within reason).

It's the car for people who derive sufficiently high levels of joy out of owning it that justify foregoing all the other things that one could do with $150,000. Maybe this is just a semantic beef, and that's how you define "can afford". I view vehicle ownership more as a relationship than an investment, though.

Very good post.
The other thing is, that as well as 'enjoyment' - most of us need to travel.
And unless we are walking or cycling, there is a cost.
Be it riding by bus / train / boat / motorcycle / plane or car.
And I hate taxis, so car it is. There is always a cost per mile.

So I have done 16k in my Taycan over 2 years. Most of it custom journeys (client meetings etc) where public transport isn't feasible anyway.

The Taycan has been incredibly cheap to run. I reckon it saves me £300-£400 pm compared to say a BMW M4 (what I would have got as an ICE car) in fuel / tax etc.

So EV makes sense if you can charge at home.
And in my view the Taycan has been the best EV you can buy - from introduction right up to the current day.

I also intend to keep mine so the depreciation curve will flatten over time.
And every year its saving me about £4-£5k on the ICE car I would have had - while loving every second of ownership.
So I'm effectively £20k up over 4 years.

Edit: update.
Just looked at the configurator. It's also £10k more new than 2 years ago.

 

[whitex]

My aesthetic requirements were basically no monochrome.
This thread pushed me to have a look for a used Taycan and I decided on a CT turbo as one I might like.
Still didn’t find one used in the UK I would buy…

I was in a very similar situation. I think one thing working against us was the lack of used CT Turbo (or other CT's for that matter) when we were looking to buy. I stopped looking after I got my new one, but I still get occasional notifications about used cars and sometimes I browse to see, I still haven't seen any used CT Turbo's I would buy. What did change however earlier this year, is that I saw one, two with a stretch, brand new inventory CT Turbos, which had they been available at MSRP between summer 2021 and summer 2022, I would have bought as a reasonably close build. In the end I'm glad I waited and got the car exactly the way I wanted it - helps with a decision to keep it longer, not tempted to upgrade to get some feature I really wanted but missed out on.

 

[whitex]

I definitely now wish I had invested the money I used to buy my Taycan and used the investment to fund the payments on HP rather than buying it outright.
I intend to keep it 6 to 8 years though.

Really? If you go see where the market was when you first ordered, would you be in the money by now? For me a silver lining was that I cashed out a bunch of investments in the summer of 2021 when I decided to buy a Taycan, when I picked it up in Feb 2023, I was really glad I cashed out a year and half earlier. Maybe today they would have been in the money again, I don't know nor have the will power to go check (nothing I can do about it, nothing to learn really as that is 20:20 hindsight). If I had a crystal ball where the market is going, I can make money whether the market is going up or down.

 

[mikezhang31]

Looking back when i was younger when I had to drive one car while day dreaming for another, and my other current friends who are driving 10-20 year old cars either because the cars are cool or all they can afford, we are very lucky to be able to splurge on these expensive toys and afford the depreciation hit on paper (only real if you sell).

I see it as just a happiness tax

 

[riburn3]

I think Taycan depreciation is not normal but higher. This may be because most everything in Porsche's is an option which bumps up the price and return on options is always low.

I think this is dead on. You can add up to 50% of your cars sale price in options with a Porsche, and when I see sticker sheets for 2020/2021 4S models on the used market now, most had between 20-40% of their selling price coming from options.

If you look at E-tron GT prices, they haven't really depreciated as much as the Taycan, and in a lot of markets are around the same price. Part if this is because they can't be optioned to death like a Porsche can, and have more standard equipment on their different trim levels.

 

[kempez]

Really? If you go see where the market was when you first ordered, would you be in the money by now? For me a silver lining was that I cashed out a bunch of investments in the summer of 2021 when I decided to buy a Taycan, when I picked it up in Feb 2023, I was really glad I cashed out a year and half earlier. Maybe today they would have been in the money again, I don't know nor have the will power to go check (nothing I can do about it, nothing to learn really as that is 20:20 hindsight). If I had a crystal ball where the market is going, I can make money whether the market is going up or down.

I think the other thing is that it appears to me that MY22 has been a lot more stable than 21 and 20, with a lot of bugs and other features worked out, as well as some welcome additions. Heater issues aside of course (mine hasn't suffered this so far).

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