Mind-blowing values/depreciation

[Bognar67]

Buying Taycan used is a good deal no doubt. 7-8/10 forum threads from used buyers nowadays.
Only few buys new, sales dropped drastically.
Interesting how will these trends influence the prices in 1-2 years distance when only few 1-2 years old Taycan will go to the market, next to the growing demand for used Taycans.

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[just_Matt]

What was the new price, 18m ago?

Yes

 

[Jonathan S.]

What do others think about the possible 25% tariffs threatened to be imposed by the USA on all EU automobile imports. Note: This is an economic question not a political one.

If and when this happens in April, what do we all think will be the depreciation impact on the USA used market in the next couple of years? Obviously, any OEM can mitigate by manufacturing in the USA, but doubtful PAG will ever be able to do this.

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https://www.wsj.com/business/autos/...a?st=p5f9Vz&reflink=desktopwebshare_permalink

 

[sickwithit]

I was dealing with the same purchase vs lease decision and after a lot of back and forth, I've decided to go with the lease. tl;dr it would cost me 15k less to lease the car for 39m that it would if I were to buy it and sell it around the same time frame.

The longer version
=============================
Car is a 2025 Taycan with a 127k MSRP and it's being offered for 104k at 1200miles, which is roughly a 19% depreciation since it went into service 7months ago. I can obviously do better depreciation wise if I went with a 2023/24 model, but I was initially looking to order a 2025 and this was somehow exactly the spec I was looking for.

I have never leased a car before so I started out thinking I would buy it and here is how I ended up going with a lease instead. First of all, many have said this before but if you don't want to sell your car, buying is probably the better option. For me, even though I've usually owned my cars for 6+ years, I feel that the EV technology is rapidly evolving and given the Taycan's spotty record on quality, I wanted to have the option to upgrade to a newer car in 3 years or so.

So what I ended up doing was comparing, how buying this car and leasing this car would look like after 3 years in terms of the net cost to me. To make things fair, I also made the down payment for the two roughly the same at 20k (which I know is considered too high for a lease). That allowed me to keep the opportunity cost even.

With 20k down, buying this car would cost me ~66k if I were to sell it after 39mo (60mo, 5.75%). This was calculated by adding the down payment, 39 payments+ final payoff and then selling the car at 60k (which is what I ended up with based on some market research I did on 3.5y old Taycans with my projected mileage)

The same thing would cost me ~51k as a lease (MF =0.00350, RV=58%) . It's lower because
(1) unlike purchases, Taycan leases are still eligible for the 7500 EV rebate
(2) Porsche gave me a residual value of 58% (73.5k) which, quite frankly, I thought was unrealistic and even my sales guy agreed...but that helps the lease since it lowers the lease term depreciation I'm on the hook for.
(3) Porsche is running a promo that gives you the 36m residual value even at 39m, making this deal even friendlier
(3) well, it's a lease so I guess it's supposed to be lower

But overall, that was a 15k difference in total money spent for the same car over the same time. This analysis was far from scientific but it least forced me to put numbers into a sheet and figure out what the two could would like for someone who wanted to walk away in 3.25 years.

My only regret here is that this car is now a CPO and that effectively would have given me a 5.5 year warranty on a practically new car without spending a penny. But when it's all said and done, I'm still quite bullish on where the EV technology and Taycan quality will be in 3 years so saving that 15k and using it towards the newer car felt like the more sensible choice.

[EDIT] My MF dropped even more after a chat with the GM so adjusted the numbers to reflect that. Lease is looking even better now (15k difference instead of 12k) so just pulled the trigger.

 

[Dr Monty]

The reason why I compared to a 911 is clearly in my post.
There is nothing new “ 4 door luxury cars will depreciate more than 2 door sport cars”.
Panamera depreciates also much less than Taycan. But it is not new. Everything depreciates less than Taycan.
Still love Taycan (look, handling, quality, engineering) but hate how valueless (and unreliable) it is.

Agree wholeheartedly. I really love my 4S CT but the endless recalls, (brake lines, heaters, high voltage module, battery, etc ) - and the months of waiting before Porsche Japan can even test for the recall issues.... I've owned German cars for 50 years, but I have never seen such depreciation or quality issues aside perhaps from my 1966 BMW 1800Ti. And when compare my experience with my BMW iX50 - zero problems zero recalls...

 

[Jonathan S.]

unlike purchases, Taycan leases are still eligible for the 7500 EV rebate

Sort of. PFS pays $7,500 less in taxes to the U.S. Treasury for each lease. And therefore adds a promotional discount to leases. Nobody though is receiving a rebate.

The key factor though in your analysis is whether your own prediction or PFS’s prediction is correct for the future resale value.

 

[sickwithit]

Sort of. PFS pays $7,500 less in taxes to the U.S. Treasury for each lease. And therefore adds a promotional discount to leases. Nobody though is receiving a rebate.

The key factor though in your analysis is whether your own prediction or PFS’s prediction is correct for the future resale value.

I am not sure I follow. So are you saying the benefits are not passed on to me? I just talked to the GM and they said it the 7500 was removed from the cap in the lease calculations.

 

[Jonathan S.]

I am not sure I follow. So are you saying the benefits are not passed on to me? They had it listed as a rebate that was helping me but I was never quite able to figure out how it impacts the lease because of their weird leasing calculations. Does anyone actually know how to do the Porsche lease calculations? I've been trying to reverse engineer my MF / interest rate.

The dealership reduced the price by a $7,500 discount that is sort of promotionally tied to the $7,500 less that PFS will eventually pay to the U.S. Treasury in corporate income taxes for every leased EV, since any business that buys any EV receives a $7,500 tax reduction regardless of the characteristics of the business or EV.
Which can indeed be the deciding factor in the lease vs buy decision.
(As well as anticipated mileage. And not wanting to deal with sale negotiations in the future.)
Although even setting aside details such as what discount rate to apply to all of this, the deciding factor in your analysis is your pessimistic view of the eventually resale value in the future -- which could very well be the case, especially since PFS might be setting the residual that high not based on actual expectations but rather to reduce the lease cost without reducing the purchase price or the MF.

I'm not sure what you're trying to reverse engineer? The standard factor is 2,400 to convert MF into an interest rate.

 

[sickwithit]

The dealership reduced the price by a $7,500 discount that is sort of promotionally tied to the $7,500 less that PFS will eventually pay to the U.S. Treasury in corporate income taxes for every leased EV, since any business that buys any EV receives a $7,500 tax reduction regardless of the characteristics of the business or EV.
Which can indeed be the deciding factor in the lease vs buy decision.
(As well as anticipated mileage. And not wanting to deal with sale negotiations in the future.)
Although even setting aside details such as what discount rate to apply to all of this, the deciding factor in your analysis is your pessimistic view of the eventually resale value in the future -- which could very well be the case, especially since PFS might be setting the residual that high not based on actual expectations but rather to reduce the lease cost without reducing the purchase price or the MF.

I'm not sure what you're trying to reverse engineer? The standard factor is 2,400 to convert MF into an interest rate.

Yes on the my pessimism. The pre-owned Taycan market simply doesn't bear out what that RV is suggesting and my sales person himself felt he could never see these cars selling at that price. But on the flip side, I'm also bullish on this car getting significantly better in 3.25 years which is another factor in favor of leasing.

Re: MV, I initially didn't know what my MF or interest rate was because none of the leasing proposal I had quoted it. Porsche told me the lease calculations are not as straightforward as the purchase calculations because of some secret sauce they have. So the best I could do was get as many data points as possible and try to reverse what the interest rate may be, which I felt was around 9.5%. After consulting with the edmunds Taycan AMA, I learned it should be closer to 8.4% (0.0035) fort his car so when I brought up with the GM, they said they could give me that if my credit checks out. That lowered the total payment by literally 3-4k.

 

[Jonathan S.]

Yes on the my pessimism. The pre-owned Taycan market simply doesn't bear out what that RV is suggesting and my sales person himself felt he could never see these cars selling at that price. But on the flip side, I'm also bullish on this car getting significantly better in 3.25 years which is another factor in favor of leasing.

Re: MV, I initially didn't know what my MF or interest rate was because none of the leasing proposal I had quoted it. Porsche told me the lease calculations are not as straightforward as the purchase calculations because of some secret sauce they have. So the best I could do was get as many data points as possible and try to reverse what the interest rate may be, which I felt was around 9.5%. After consulting with the edmunds Taycan AMA, I learned it should be closer to 8.4% (0.0035) fort his car so when I brought up with the GM, they said they could give me that if my credit checks out. That lowered the total payment by literally 3-4k.

Of course the sales person said that: his goal is to convince you that the lease payment is an especially good deal, so he'll say the residual is unrealistically high.
(If he really had special insights into financial projections like that, then he'd be working for PFS, not trying to sell individual cars.)

When you say "Porsche told me [...]" do you mean PCNA, PFS, or the independently owned Porsche dealership?
Either way, lease calculations are certainly more involved than purchase calculations, since a purchase calculation involves the purchase price and ... that's pretty much it.
Although lease calculations are still just a few lines in a spreadsheet.
So the reason the dealer didn't give you the calculations is just more of the typical dealer obfuscation.

 

[sickwithit]

Of course the sales person said that: his goal is to convince you that the lease payment is an especially good deal, so he'll say the residual is unrealistically high.
(If he really had special insights into financial projections like that, then he'd be working for PFS, not trying to sell individual cars.)

When you say "Porsche told me [...]" do you mean PCNA, PFS, or the independently owned Porsche dealership?
Either way, lease calculations are certainly more involved than purchase calculations, since a purchase calculation involves the purchase price and ... that's pretty much it.
Although lease calculations are still just a few lines in a spreadsheet.
So the reason the dealer didn't give you the calculations is just more of the typical dealer obfuscation.

Yes, an independently owned Porsche dealership told me that. But I actually put the numbers into leasehackr and I was able to get the monthly payments to within $20 of what they quoted me so I'm not sure if it's as obfuscated as they made it out to be.

Regarding the high residual value, you are probably right but the key point there was that the car had depreciated by 18% in 6 months so it was hard to imagine how it was going to depreciate by just 24% in the next 39 months. I understand the depreciation hits hard early but that still seems like a very unnatural curve. Also looking at porsches that are roughly 4 years old (2021 models in this case), it was hard to find cars with 58% residual value.

 

[Jonathan S.]

And independently owned Porsche dealership told me that. But I actually put the numbers into leasehackr and I was able to get the monthly payments to within $20 of what they quoted me so I'm not sure if it's as obfuscated as they made it out to be.

Regarding the high residual value, you are probably right but the key point there was that the car had depreciated by 18% in 6 months so it was hard to imagine how it was going to depreciate by just 24% in the next 39 months. I understand the depreciation hits hard early but that still seems like a very unnatural curve. Also looking at porsches that are roughly 4 years old (2021 models in this case), it was hard to find cars with 58% residual value.

Sounds like the lease calculations were intentionally obfuscated by the dealer.

The car depreciated by almost that full 18% in the first six seconds of that six-month period, i.e., immediately after it was registered.

As for the resale value would be in the future, perhaps the PFS residual value is a good predictor, but it indeed might instead be a means of discounting the lease without reducing the sales prices or implicit interest rate.

 

[sickwithit]

Sounds like the lease calculations were intentionally obfuscated by the dealer.

The car depreciated by almost that full 18% in the first six seconds of that six-month period, i.e., immediately after it was registered.

As for the resale value would be in the future, perhaps the PFS residual value is a good predictor, but it indeed might instead be a means of discounting the lease without reducing the sales prices or implicit interest rate.

Yeah, not sure why they felt it would be difficult. And I was also told that it allows them to make the leases more attractive without lowering asking. What's PFS?

BTW one other data point I checked that made me even more skeptical about the 58% RS was the kbb depreciation graph for the 2021 Taycan which showed a 20k drop in the third year and a 14k drop in the past year. Edmunds private party appraisal had it at 52k, both of which would put the car's RV in the low to mid 40%. My original calculations were assuming 47% because I was hoping things may improve a bit.

FWIW, I adjusted the resale value I used in my calculations to the 58% residual value (73.5k), and the savings dropped from 15k to 2k. At least, it was still positive so there is that.

 

[Jonathan S.]

https://newsroom.porsche.com/en_US/2024/company/porsche-financial-services-ceo-37978.html

 

[EGGY41]

Yes

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