Are Taycans the bargains of the Porsche model lineup?

[RAHRCR]

If it adds to the conversation, Porsche has also stated that within 2 years their EV will match profit margins of their ICE cars and within 5 years expect them to more profitable than traditional ice due to scale and maturity of manufacturing processes.

I would guess it matters too that the average Taycan customer is also a different demographic than the average P customer. Younger and first time to the brand may influence their decisions.

I have no comments on the marketing/demographics side of things. Fair amount of voodoo there. My comments are focused on the cars themselves.

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[whitex]

Yes, I did several builds. Turns out you end up in that classic Porsche pricing model of paying for speed/HP. If I recall correctly, I would have had to pay US$15K more for the same build as a Turbo, and US$25-30K more for the same build as a Turbo S. Worse yet, the depreciation rates for both the Turbo and, particularly, the Turbo S, were much higher than for the 4S, which seems to be the universally agreed upon sweet spot in the line-up, which is why I chose it over the Turbo or Turbo S (and yes, I very, very nearly pulled trigger on Turbo S as I like the idea of having the apex predator in the line-up but then never, ever race anyone or even use launch control -- so I guess I am becoming a bit more mature).

Turbo or Turbo S might have a higher depreciation on the base price, but options depreciate even faster, whether on 4S or Turbo S. Wouldn't 4S with lots of options which costs as much as a base Turbo S, depreciate faster than said base Turbo S?

 

[TDinDC]

Turbo or Turbo S might have a higher depreciation on the base price, but options depreciate even faster, whether on 4S or Turbo S. Wouldn't 4S with lots of options which costs as much as a base Turbo S, depreciate faster than said base Turbo S?

Not for purposes of leases. It is set based on the model, not based on MSRP. Also, I was really just pointing that out for purposes of identifying which model is viewed, rightly or wrongly, as being the sweet spot in terms of bang for buck in the market, which is really the underlying point of this thread: I think the Taycan delivers the most when compared to other Porsche models.

 

[whitex]

Not for purposes of leases. It is set based on the model, not based on MSRP. Also, I was really just pointing that out for purposes of identifying which model is viewed, rightly or wrongly, as being the sweet spot in terms of bang for buck in the market, which is really the underlying point of this thread: I think the Taycan delivers the most when compared to other Porsche models.

I am not trying to criticize your decision, just clarifying things for myself or possibly for others. I haven't leased cars in a while, but last time I did, the residual value formula of the car was always
(base_price*base_% + options_price*options_%)
with options_% always lower than base_%. Did you by any chance get the formula from the dealer? Last Porsche I leased was two decades ago so my information is definitely dated.

 

[TDinDC]

I am not trying to criticize your decision, just clarifying things for myself or possibly for others. I haven't leased cars in a while, but last time I did, the residual value formula of the car was always
(base_price*base_% + options_price*options_%)
with options_% always lower than base_%. Did you by any chance get the formula from the dealer? Last Porsche I leased was two decades ago so my information is definitely dated.

That's not the way Porsche sets their leasing terms (at least in the US).

Options do not impact the assumed depreciation rate/money factor. Their calculations are not sophisticated enough to consider individual builds: they only vary by model type (i.e., Base, S, Turbo, Turbo S).

Options do, of course, affect the lease payment amount, but they do not change the money factor (and thus the assumed depreciation rate).

Now, when it comes to selling on the open market, options are a bit like improvements to your home: some will increase the sales price -- but not all and almost never on a dollar for dollar basis -- but they nearly always lead to a faster sale.

But I didn't spec my car for anyone other than myself for right here and now, so potential impact of options on resale was not a consideration at all, despite the fact that depreciation rate did because it impacted my lease payments no matter what options I selected.

So, with identical spec cars between the 4S that I picked versus a Turbo or Turbo S (so the only difference is speed given my spec sheet), picking a Turbo or Turbo S would hurt me twice: First in the form of a higher sales price and second in the form of a higher money factor.

And I'll confess that I don't like the idea of calling an EV "Turbo", except that all of my cars are debadged so nobody other than I would know.

 

[WuffvonTrips]

I am not trying to criticize your decision, just clarifying things for myself or possibly for others. I haven't leased cars in a while, but last time I did, the residual value formula of the car was always
(base_price*base_% + options_price*options_%)
with options_% always lower than base_%.

That's my assumption for Porsche GB PCP's- with the RV of options being pretty much zero.
I got quotes for a similarly spec'd 4S and Turbo, and assuming that the total RV = the optional final payment to keep the vehicle, and that instead of taking a PCP I bought outright then sold after 3 years (the term of the lease quotes), the Turbo will effectively only cost me £1000 more per year than the 4S would have done. IIRC, the Turbo had an RV of 61% of the sticker price including options, the 4S had an RV of 55%.

 

[TDinDC]

That's my assumption for Porsche GB PCP's- with the RV of options being pretty much zero.
I got quotes for a similarly spec'd 4S and Turbo, and assuming that the total RV = the optional final payment to keep the vehicle, and that instead of taking a PCP I bought outright then sold after 3 years (the term of the lease quotes), the Turbo will effectively only cost me £1000 more per year than the 4S would have done. IIRC, the Turbo had an RV of 61% of the sticker price including options, the 4S had an RV of 55%.

In the US, the RV are set by percentage based on model. I do not remember the exact values at all, but the distribution was something like the following:

Base: 65%
S: 67%
Turbo: 60%
Turbo S: 55%

So, the residual value of two model Taycan 4S CT would depend upon the level of options chosen for the build, but they both would be 67% of the MSRP of each build.

 

[whitex]

That's not the way Porsche sets their leasing terms (at least in the US).

Options do not impact the assumed depreciation rate/money factor. Their calculations are not sophisticated enough to consider individual builds: they only vary by model type (i.e., Base, S, Turbo, Turbo S).

Options do, of course, affect the lease payment amount, but they do not change the money factor (and thus the assumed depreciation rate).

Options do not change the money factor, but the absolutely do affect the residual value of the lease, which in turn affect the payment. I bet a 4S optioned up to Turbo S base price will have a higher lease payment than said Turbo S, assuming both have the same money factor (and that the money factor is not astronomical). You will however be able to buy it out at the end of the lease for less (that’s the residual value).
I know your decision is already made, I’m just mentioning it as something to perhaps look into in the future. I’ve bought and leased many cars in my life in US and Canada, and it always worked like that.

 

[whitex]

In the US, the RV are set by percentage based on model. I do not remember the exact values at all, but the distribution was something like the following:

Base: 65%
S: 67%
Turbo: 60%
Turbo S: 55%

So, the residual value of two model Taycan 4S CT would depend upon the level of options chosen for the build, but they both would be 67% of the MSRP of each build.

I honestly think dealer did not tell you the truth. If you asked for a residual value for 4S+10K in options vs 4S+70K in options, you would find the percentage is not the same. Remember that residual values are what the leasing company is stuck with at the end of the lease, so if as you yourself admit, options have less value to the open market, the leasing company will compensate. The only exceptions to this as subsidized leases, where a manufacturer subsidizes the residual value (they can also subsidize the money factor, or both, but money factor does not change the residual), so maybe in your case the 4S RV was subsidized.

 

[TDinDC]

Options do not change the money factor, but the absolutely do affect the residual value of the lease, which in turn affect the payment. I bet a 4S optioned up to Turbo S base price will have a higher lease payment than said Turbo S, assuming both have the same money factor. You will however be able to buy it out at the end of the lease for less (that’s the residual value).
I know your decision is already made, I’m just mentioning it as something to perhaps look into in the future. I’ve bought and leased many cars in my life in US and Canada, and it always worked like that.

I really feel like we are talking past each other. I did all of the calculations you used in your example, because that is the choice I was making.

The money factor/estimated depreciation rate really matters.

let's take your example of a loaded up 4S and a base Turbo S with equal MSRPs. If you assume the same down payment (or no down payment as I personally chose to do), the amount financed will be the MSRP - the estimated residual value.

Assuming just for the sake of example that the MSRP is 100K and the estimated depreciation (ie., the value of the car) at end of term for the 4S is 75K but for the Turbo S will be 50K, then you would be financing 25K * interest rate for the 4S and 50K * interest rate for the Turbo S.

I know that my examples for the estimated depreciation rates are extreme, but the truth is that the Turbo S does have a higher estimated depreciation rate (I was told because fewer people are willing to pay more for them) than the 4S, so the principle remains the same: you pay more for models that have a higher estimated depreciation, and the 4S is the model that Porsche thinks will have the lowest estimated depreciation.

So adding options does increase the total amount financed, but the lower estimated depreciation serves to offset that impact.

In sum, you are better off getting the car with the lowest estimated depreciation rate with higher options than a car with a higher estimated depreciation rate with lower options . . at least for leasing.

 

[TDinDC]

I honestly think dealer did not tell you the truth. If you asked for a residual value for 4S+10K in options vs 4S+70K in options, you would find the percentage is not the same. Remember that residual values are what the leasing company is stuck with at the end of the lease, so if as you yourself admit, options have less value to the open market, the leasing company will compensate. The only exceptions to this as subsidized leases, where a manufacturer subsidizes the residual value (they can also subsidize the money factor, or both, but money factor does not change the residual), so maybe in your case the 4S RV was subsidized.

The dealer told me the truth. I leased my car and went through all of the options, with the contracts before me to sign.

The depreciation rates set by the manufacturer just aren't sophisticated enough to take into account the impact of options as you are assuming. I am using that to my advantage.

 

[whitex]

I really feel like we are talking past each other. I did all of the calculations you used in your example, because that is the choice I was making.

The money factor/estimated depreciation rate really matters.

let's take your example of a loaded up 4S and a base Turbo S with equal MSRPs. If you assume the same down payment (or no down payment as I personally chose to do), the amount financed will be the MSRP - the estimated residual value.

Assuming just for the sake of example that the MSRP is 100K and the estimated depreciation (ie., the value of the car) at end of term for the 4S is 75K but for the Turbo S will be 50K, then you would be financing 25K * interest rate for the 4S and 50K * interest rate for the Turbo S.

I know that my examples for the estimated depreciation rates are extreme, but the truth is that the Turbo S does have a higher estimated depreciation rate (I was told because fewer people are willing to pay more for them) than the 4S, so the Principle remains the same: you pay more for models that have a higher estimated depreciation, and the 4S is the model that Porsche thinks will have the lowest estimated depreciation. So adding options does increase the total amount financed, but the lower estimated depreciation serves to offset that impact. So you are better off getting the car with the lowest estimated depreciation rate with higher options than even a car with a higher estimated depreciation rate with lower options . . at least for leasing.

I am in total agreement with you on this. The only thing we disagree on is how the residual value is calculated, you think it's a fixed% times MSRP, I think it's fixed% times BASE MSRP + lower_fixed% * OPTIONS_MSRP. Every lease I ever look into was like that, even if the SA did not quite understand it (you can solve for both fixed percentages if you ask them to give you residual values on same base with different options).

 

[TDinDC]

I am in total agreement with you on this. The only thing we disagree on is how the residual value is calculated, you think it's a fixed% times MSRP, I think it's fixed% times BASE MSRP + lower_fixed% * OPTIONS_MSRP. Every lease I ever look into was like that, even if the SA did not quite understand it (you can solve for both fixed percentages if you ask them to give you residual values on same base with different options).

I went through the financing options with my dealer. They did not distinguish between base + options.

And I did ask for those residual values.

 

[whitex]

I went through the financing options with my dealer. They did not distinguish between base + options.

And I did ask for those residual values.

Perhaps you ran into subsidized residual values. Tesla did that from time to time.

 

[whitex]

That's my assumption for Porsche GB PCP's- with the RV of options being pretty much zero.
I got quotes for a similarly spec'd 4S and Turbo, and assuming that the total RV = the optional final payment to keep the vehicle, and that instead of taking a PCP I bought outright then sold after 3 years (the term of the lease quotes), the Turbo will effectively only cost me £1000 more per year than the 4S would have done. IIRC, the Turbo had an RV of 61% of the sticker price including options, the 4S had an RV of 55%.

In the US options are worth 0 for wholesale auction estimates, like if you want to return a leased car early. The only car I ever returned early was a 911C4, and the bank did just that, calculate early residual based purely on base price, and used that to calculate how much I owe to get out of the lease. They in turn just sent the car to the auction, and any extra money they got for the options in the auction was a bonus for them, not for me.

When leasing a new car however, leasing companies however do include options in residual value, however at a much more accelerated depreciation than the base price. The only exception to that is if the manufacturer subsidizes residual values, which happens from time time, but almost exclusively on brand new vehicles.

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