PRICES ALL OVER THE PLACE
Discussion
There have been quite a few postings about prices and values recently - generally revealing huge differences and opinions - to which we have commented that we feel that there are too many used Porsche's on the market causing the problem (especially sub £25K).
Many are advertised too high and at what the owner wants (but they don't actually sell) - then others look to see what their car is worth and similarly follow the trend - the adverts becoming full of over priced cars that don't sell, while others become realistic and offer their car for sale at a much lower figure - making the others look far too expensive. Dealers tend to know the market better and so are often accused of profiteering when their valuations are actually just more realistic.
With all retail sales suffering just now any sale is slow to achieve and so dealers may be stuck with a car for several months (even if it is priced correctly) by which time values may have dropped or realigned by a few thousands and they have to also take this into account when making offers to buy especially with Autumn upon us and winter looming.
As a result a lot of dealers have come in for criticism - so I thought I would share this with you.
Dealers use books to assess values and the BCA auction web site offers 2 different price guides - Glass's guide and Black Cap. Today there is an 01X Boxster S coming into auction - for which the difference in the 2 values/guide prices retail is £5000 which is much more than the profit margin. This may be because one book has been slower to respond to this summer's general price fall than the other - but you can imagine how difficult it makes valuations. So a dealer using just one book may buy it in at a higher price than it will sell at (if the other book is right) or never get any stock because he is bidding much too low!
We used to run our own system to establish values but it was very time consuming so as the market settled down we found the books reasonably OK and let it fall into dissuse - but now we are setting up our own system again and meanwhile we are not very interested in buying in - just in case we get it wrong and are stuck with loss making cars.
In view of this uncertainty - once our own system is in use we will be confident to start buying and selling again.
Baz Hartech
Many are advertised too high and at what the owner wants (but they don't actually sell) - then others look to see what their car is worth and similarly follow the trend - the adverts becoming full of over priced cars that don't sell, while others become realistic and offer their car for sale at a much lower figure - making the others look far too expensive. Dealers tend to know the market better and so are often accused of profiteering when their valuations are actually just more realistic.
With all retail sales suffering just now any sale is slow to achieve and so dealers may be stuck with a car for several months (even if it is priced correctly) by which time values may have dropped or realigned by a few thousands and they have to also take this into account when making offers to buy especially with Autumn upon us and winter looming.
As a result a lot of dealers have come in for criticism - so I thought I would share this with you.
Dealers use books to assess values and the BCA auction web site offers 2 different price guides - Glass's guide and Black Cap. Today there is an 01X Boxster S coming into auction - for which the difference in the 2 values/guide prices retail is £5000 which is much more than the profit margin. This may be because one book has been slower to respond to this summer's general price fall than the other - but you can imagine how difficult it makes valuations. So a dealer using just one book may buy it in at a higher price than it will sell at (if the other book is right) or never get any stock because he is bidding much too low!
We used to run our own system to establish values but it was very time consuming so as the market settled down we found the books reasonably OK and let it fall into dissuse - but now we are setting up our own system again and meanwhile we are not very interested in buying in - just in case we get it wrong and are stuck with loss making cars.
In view of this uncertainty - once our own system is in use we will be confident to start buying and selling again.
Baz Hartech
Baz - surely, as a specialist, you know the market for older Porsche's better than the price guides? As cars get older (especially the more "interesting" ones, including most older Porsches), their values get more individual on factors that the guides are slow to pick up on, that someone on the ground can know well. I know various car dealers that when valuing a car in a market they know well (be it geographical, make, model, vehicle type) tend to ignore the book value and will either under or over bid as they feel appropriate.
The only system they use is that last week they sold a similar car for £5k over book within a week, with lots of interest, so they have confidence in also buying for over book.
Agree wholeheartedly about people's over valuations on older cars though. We all like to think they're worth x, but getting someone to pay it is a different matter.
The only system they use is that last week they sold a similar car for £5k over book within a week, with lots of interest, so they have confidence in also buying for over book.
Agree wholeheartedly about people's over valuations on older cars though. We all like to think they're worth x, but getting someone to pay it is a different matter.
Edited by willdew on Tuesday 17th October 10:01
hartech said:
There have been quite a few postings about prices and values recently - generally revealing huge differences and opinions - to which we have commented that we feel that there are too many used Porsche's on the market causing the problem (especially sub £25K).
Many are advertised too high and at what the owner wants (but they don't actually sell) - then others look to see what their car is worth and similarly follow the trend - the adverts becoming full of over priced cars that don't sell, while others become realistic and offer their car for sale at a much lower figure - making the others look far too expensive. Dealers tend to know the market better and so are often accused of profiteering when their valuations are actually just more realistic.
With all retail sales suffering just now any sale is slow to achieve and so dealers may be stuck with a car for several months (even if it is priced correctly) by which time values may have dropped or realigned by a few thousands and they have to also take this into account when making offers to buy especially with Autumn upon us and winter looming.
As a result a lot of dealers have come in for criticism - so I thought I would share this with you.
Dealers use books to assess values and the BCA auction web site offers 2 different price guides - Glass's guide and Black Cap. Today there is an 01X Boxster S coming into auction - for which the difference in the 2 values/guide prices retail is £5000 which is much more than the profit margin. This may be because one book has been slower to respond to this summer's general price fall than the other - but you can imagine how difficult it makes valuations. So a dealer using just one book may buy it in at a higher price than it will sell at (if the other book is right) or never get any stock because he is bidding much too low!
We used to run our own system to establish values but it was very time consuming so as the market settled down we found the books reasonably OK and let it fall into dissuse - but now we are setting up our own system again and meanwhile we are not very interested in buying in - just in case we get it wrong and are stuck with loss making cars.
In view of this uncertainty - once our own system is in use we will be confident to start buying and selling again.
Baz Hartech
I dont really know where to start with this comment..surely as a dealer it is your job to know where to price cars?There arent many jobs where you can have the luxury of stopping activities when times are tough just to return when its easy to make money again are there?With respect to struggling retail sales this is also incorrect..latest data shows retail sales growing at the highest level since jan 01!Maybe Porsche sales are slow coz the bid/offer spread from dealers is so wide that nobody actually knows the 'right' price and the market therefore becomes illiquid.Most privately offered cars are too high because people look at dealers websites and see similar cars as theirs, knock a few grand off to sell privately ..not realising that the dealers bid would be miles away from the dealers offer .As an example an OPC has an 01 996tt on its website for 56k...the last bid i got from them for equivalant car was 40k!..Wheres the real price?Many are advertised too high and at what the owner wants (but they don't actually sell) - then others look to see what their car is worth and similarly follow the trend - the adverts becoming full of over priced cars that don't sell, while others become realistic and offer their car for sale at a much lower figure - making the others look far too expensive. Dealers tend to know the market better and so are often accused of profiteering when their valuations are actually just more realistic.
With all retail sales suffering just now any sale is slow to achieve and so dealers may be stuck with a car for several months (even if it is priced correctly) by which time values may have dropped or realigned by a few thousands and they have to also take this into account when making offers to buy especially with Autumn upon us and winter looming.
As a result a lot of dealers have come in for criticism - so I thought I would share this with you.
Dealers use books to assess values and the BCA auction web site offers 2 different price guides - Glass's guide and Black Cap. Today there is an 01X Boxster S coming into auction - for which the difference in the 2 values/guide prices retail is £5000 which is much more than the profit margin. This may be because one book has been slower to respond to this summer's general price fall than the other - but you can imagine how difficult it makes valuations. So a dealer using just one book may buy it in at a higher price than it will sell at (if the other book is right) or never get any stock because he is bidding much too low!
We used to run our own system to establish values but it was very time consuming so as the market settled down we found the books reasonably OK and let it fall into dissuse - but now we are setting up our own system again and meanwhile we are not very interested in buying in - just in case we get it wrong and are stuck with loss making cars.
In view of this uncertainty - once our own system is in use we will be confident to start buying and selling again.
Baz Hartech
You've hit the nail on the head.
The depreciation on new Porsche is eyewatering but not immediately obvious to buyers but is to private sellers. It is being created by the massive bid/offer spread that main dealers and now specialists are demanding. The reason being given is
1) Cars are not as reliable and can incurr huge spends either upfront or a few months after the sale (all cars not just Porsches)
2) there are too many cars in the system
3) cars are hanging around too long
My own belief is that the gap between the value of ones existing car and a new (or used one) is just too large and is putting buyers off from changing (once bitten......). This is down to the bid/offer spread.
Real world figures..03 CLK 320-new cost £45k. 3.5 years later trade is £16k and. Thats £29k for 3.5 years or thats £8k pa or £14k per year of untaxed income !!!! and this is for a desireable car with all the options, correct colour and low miles! Would I buy a new car after that experience-never (thank god I bought it used)
The depreciation on new Porsche is eyewatering but not immediately obvious to buyers but is to private sellers. It is being created by the massive bid/offer spread that main dealers and now specialists are demanding. The reason being given is
1) Cars are not as reliable and can incurr huge spends either upfront or a few months after the sale (all cars not just Porsches)
2) there are too many cars in the system
3) cars are hanging around too long
My own belief is that the gap between the value of ones existing car and a new (or used one) is just too large and is putting buyers off from changing (once bitten......). This is down to the bid/offer spread.
Real world figures..03 CLK 320-new cost £45k. 3.5 years later trade is £16k and. Thats £29k for 3.5 years or thats £8k pa or £14k per year of untaxed income !!!! and this is for a desireable car with all the options, correct colour and low miles! Would I buy a new car after that experience-never (thank god I bought it used)
Not sure how the responses comment then on how 2 guides are different by £5000 for the SAME CASR car which is anyway in the £10 to £20K bracket.
We also prefer not to mislead customers about the value of their cars, not to offer too punative a price and not to try and sell so expensive that they lose a packet later. We try to be fair to our customers both buying and selling.
All the retailers are offering huge sales right now because retail sales are so low and price variations in the Porsche market are higher than they have ever been.
Other dealers tell me they are making nothing selling cars at the moment.
However - please if readers prefer to listen to other "experts" - they are most welcome - as I said I was just sharing something - obviously for those interested - perhaps time will establish who is right and who is wrong - nothing else will really prove it right now - lets wait and see and then comment.
Regarding my rights to decide what and when to buy and sell - we mainly concentrate on our workshops which with 10 ramps are amongst the biggest in the Country and we only ever stock a very small number of carefully selected Porsche's for sale. Then we try and stock cars that we feel will hold their value better - so in the last year for example mainly 968's, 993's and 3.2 carrera's. In this way we feel we are looking after our customers better than if we casually bought and sold just to make a profit and didn't care less about the current or future values.
Furthermore if we bought too expensive and then sold at a loss we would have to put prices up accross the board to survive. Proper business management dictates that businesses react quickly to the market and in doing so protect both the business and the customers best interests.
But - like all things - these things are very much a matter of opinion and business culture. I do accept that we may not be typical in our approach but we do at least care for our customers.
Baz Hartech
We also prefer not to mislead customers about the value of their cars, not to offer too punative a price and not to try and sell so expensive that they lose a packet later. We try to be fair to our customers both buying and selling.
All the retailers are offering huge sales right now because retail sales are so low and price variations in the Porsche market are higher than they have ever been.
Other dealers tell me they are making nothing selling cars at the moment.
However - please if readers prefer to listen to other "experts" - they are most welcome - as I said I was just sharing something - obviously for those interested - perhaps time will establish who is right and who is wrong - nothing else will really prove it right now - lets wait and see and then comment.
Regarding my rights to decide what and when to buy and sell - we mainly concentrate on our workshops which with 10 ramps are amongst the biggest in the Country and we only ever stock a very small number of carefully selected Porsche's for sale. Then we try and stock cars that we feel will hold their value better - so in the last year for example mainly 968's, 993's and 3.2 carrera's. In this way we feel we are looking after our customers better than if we casually bought and sold just to make a profit and didn't care less about the current or future values.
Furthermore if we bought too expensive and then sold at a loss we would have to put prices up accross the board to survive. Proper business management dictates that businesses react quickly to the market and in doing so protect both the business and the customers best interests.
But - like all things - these things are very much a matter of opinion and business culture. I do accept that we may not be typical in our approach but we do at least care for our customers.
Baz Hartech
hartech said:
Not sure how the responses comment then on how 2 guides are different by £5000 for the SAME CASR car which is anyway in the £10 to £20K bracket.
We also prefer not to mislead customers about the value of their cars, not to offer too punative a price and not to try and sell so expensive that they lose a packet later. We try to be fair to our customers both buying and selling.
All the retailers are offering huge sales right now because retail sales are so low and price variations in the Porsche market are higher than they have ever been.
Other dealers tell me they are making nothing selling cars at the moment.
However - please if readers prefer to listen to other "experts" - they are most welcome - as I said I was just sharing something - obviously for those interested - perhaps time will establish who is right and who is wrong - nothing else will really prove it right now - lets wait and see and then comment.
Regarding my rights to decide what and when to buy and sell - we mainly concentrate on our workshops which with 10 ramps are amongst the biggest in the Country and we only ever stock a very small number of carefully selected Porsche's for sale. Then we try and stock cars that we feel will hold their value better - so in the last year for example mainly 968's, 993's and 3.2 carrera's. In this way we feel we are looking after our customers better than if we casually bought and sold just to make a profit and didn't care less about the current or future values.
Furthermore if we bought too expensive and then sold at a loss we would have to put prices up accross the board to survive. Proper business management dictates that businesses react quickly to the market and in doing so protect both the business and the customers best interests.
But - like all things - these things are very much a matter of opinion and business culture. I do accept that we may not be typical in our approach but we do at least care for our customers.
Baz Hartech
But Baz as i said retail sales are not low...Car sales maybe but that is because too many people who have a passion for cars and therefore have historically been prepared to pay for the privilege of driving nice cars have been burnt too many times,theres only a certain amount of times that you can lose 10k in 6 months before saying 'bollox' to that.I know 3 mates of mine who have jacked in expensive cars this year...f430 spider,gt2, and a db9..all buying cheap runners...to buy a 100k car you have to feel its a special product not just a another commodity for dealers to make money out of.In the past i honestly believe that the target customer for Porsche were enthusiasts who bought reasonably rare cars knowing that when they came to sell them with fpsh,low mileage and mint condition they would lose very little money.The last bid i got for my car the dealer didnt even want to see the car first!We also prefer not to mislead customers about the value of their cars, not to offer too punative a price and not to try and sell so expensive that they lose a packet later. We try to be fair to our customers both buying and selling.
All the retailers are offering huge sales right now because retail sales are so low and price variations in the Porsche market are higher than they have ever been.
Other dealers tell me they are making nothing selling cars at the moment.
However - please if readers prefer to listen to other "experts" - they are most welcome - as I said I was just sharing something - obviously for those interested - perhaps time will establish who is right and who is wrong - nothing else will really prove it right now - lets wait and see and then comment.
Regarding my rights to decide what and when to buy and sell - we mainly concentrate on our workshops which with 10 ramps are amongst the biggest in the Country and we only ever stock a very small number of carefully selected Porsche's for sale. Then we try and stock cars that we feel will hold their value better - so in the last year for example mainly 968's, 993's and 3.2 carrera's. In this way we feel we are looking after our customers better than if we casually bought and sold just to make a profit and didn't care less about the current or future values.
Furthermore if we bought too expensive and then sold at a loss we would have to put prices up accross the board to survive. Proper business management dictates that businesses react quickly to the market and in doing so protect both the business and the customers best interests.
But - like all things - these things are very much a matter of opinion and business culture. I do accept that we may not be typical in our approach but we do at least care for our customers.
Baz Hartech
hartech said:
Furthermore if we bought too expensive and then sold at a loss we would have to put prices up accross the board to survive. Proper business management dictates that businesses react quickly to the market and in doing so protect both the business and the customers best interests.
Baz Hartech
Baz Hartech
Surely, if you put prices up across the board to "survive" if you had previously sold at a loss, you would lose business because your customers would go elsewhere? Putting up prices because of a previous loss only works in a monopoly.
The last thing you should do to attract new business (or keep existing customers) is to raise prices for to cover a previous bad business decision. The previous loss incurred has to be swallowed. The only other way would be to introduce a new service that "adds value" for the customer that he can't get elsewhere.
Problem is many onwers are unrealistic, as said already...........I get offered cars from other dealers who are asking me similar money to many unsold cars on the Autotrader website............as far as glasses guide/cap goes, chuck it out of the window where Porsche is concerned..........also dont forget Specialist vehicles sell better in the south than the north.
Intersting debate this one. Am shocked (!) to find myself agreeing with KayC and Para for once in some respects.
My recent experience of LAUGHABLE bids from OPCs has simply meant that I too have said "bollox" and am keeping the car I have. When you go and get your car looked at as a trade in and they offer you £22k, and then the same day you ring up and ask them to find you a car with your spec and they tell you it will cost you £35k then you realise that they are having a laugh.
It's the cost to change which is stopping sales.
Vesuvius 996 said:
Intersting debate this one. Am shocked (!) to find myself agreeing with KayC and Para for once in some respects.
My recent experience of LAUGHABLE bids from OPCs has simply meant that I too have said "bollox" and am keeping the car I have. When you go and get your car looked at as a trade in and they offer you £22k, and then the same day you ring up and ask them to find you a car with your spec and they tell you it will cost you £35k then you realise that they are having a laugh.
It's the cost to change which is stopping sales.
It's a reflection of their inefficiency at running a business. They are either a) paying their sales staff too much money b) the owners a greedy c) providing expensive overheads such as luxurious premises.
It's a UK business problem of trying to make lots of money quickly rather than establish a long term business that provides a service at reasonable cost to the customer while also providing an reasonable income for the business.
Too much short term money grabbing in the UK. That's why I left.
As customers don't bring round little books when buying, it always amazes me that dealers rely on them when buying themselves.
If we turned up on the forecourt and said "Yeah Baz, but everyone knows extras aren't worth a toss and it may have low miles, but no one buys on mileage. You need to be realistic son, I'll give you half what you paid for it." I think you'd tell us to bog off.
Surely it is a game of knowing the market and knowing your customer base. Do you want to shift volumes at slim (no laughing at the back) margins or do you want to sell fully loaded, pampered examples at premium prices? There are customers for both.
About the only thing guide books are useful for is proving stock value to the bank manager.
If we turned up on the forecourt and said "Yeah Baz, but everyone knows extras aren't worth a toss and it may have low miles, but no one buys on mileage. You need to be realistic son, I'll give you half what you paid for it." I think you'd tell us to bog off.
Surely it is a game of knowing the market and knowing your customer base. Do you want to shift volumes at slim (no laughing at the back) margins or do you want to sell fully loaded, pampered examples at premium prices? There are customers for both.
About the only thing guide books are useful for is proving stock value to the bank manager.
Raven Flyer said:
As customers don't bring round little books when buying, it always amazes me that dealers rely on them when buying themselves.
If we turned up on the forecourt and said "Yeah Baz, but everyone knows extras aren't worth a toss and it may have low miles, but no one buys on mileage. You need to be realistic son, I'll give you half what you paid for it." I think you'd tell us to bog off.
Surely it is a game of knowing the market and knowing your customer base. Do you want to shift volumes at slim (no laughing at the back) margins or do you want to sell fully loaded, pampered examples at premium prices? There are customers for both.
About the only thing guide books are useful for is proving stock value to the bank manager.
If we turned up on the forecourt and said "Yeah Baz, but everyone knows extras aren't worth a toss and it may have low miles, but no one buys on mileage. You need to be realistic son, I'll give you half what you paid for it." I think you'd tell us to bog off.
Surely it is a game of knowing the market and knowing your customer base. Do you want to shift volumes at slim (no laughing at the back) margins or do you want to sell fully loaded, pampered examples at premium prices? There are customers for both.
About the only thing guide books are useful for is proving stock value to the bank manager.
Here is my recent experience with our Boxster.
New cost circa £44K
Purchased for £41.5K with 1800 miles on the clock when 3 months old from OPC (ex demo car)
For them to buy the car back today with 4K on the clock and 5 months old - £33K
For them to take the car as a trade in as per above against a new Boxster 3.4S - £33K
For them to take the car as a trade in as per above against an ex demo Boxster 3.4S - £34.5K
They did say that if it was advertised in the Sunday Times it would comfortably achieve £37K as a private sale. I can only guess how much they would put it on the fourcourt for.
New cost circa £44K
Purchased for £41.5K with 1800 miles on the clock when 3 months old from OPC (ex demo car)
For them to buy the car back today with 4K on the clock and 5 months old - £33K
For them to take the car as a trade in as per above against a new Boxster 3.4S - £33K
For them to take the car as a trade in as per above against an ex demo Boxster 3.4S - £34.5K
They did say that if it was advertised in the Sunday Times it would comfortably achieve £37K as a private sale. I can only guess how much they would put it on the fourcourt for.
All of this "uncertainty" (always in the dealer's favour) is giving me some serious doubts about going through with my purchase of a new C4S. Sounds as if Porsche are as bad as any other marque for residuals, but just refuse to give any discount or any decent discount to buyers of new or nearly new cars. Great. How much will my £80k C4s be worth in 3 years, I wonder, 40k? 50k?
Vesuvius 996 said:
POORCARDEALER said:
Its the overheads that do it.............my pal runa a 50 car site and he needs to earn £1K A DAY to stand still.................thats just to cover overheads and wages etc
I bet he has a big house and more money than he knows what to do with
That's right a huge house is a BIG overhead
I had always assumed that these prices evolved from statistical data obtained from various (including auction) sources and thus with more and more Porsches on the used market than ever before, the 'quality' of the data should increase and you might expect the guide prices to converge but your example appears to fly in the face of that theory!
Can you share some other differences for other models such as the base Boxster, 911 C2 & C4 so see if this is a simple anomoly or a Porsche-specific skew? Or alternatively, share the variances on the Boxster S for the 02 & 03 models etc. to see if they close-up?
As a student I worked for one summer as a showroom assistant (polishing, acting as 'balast' on test drives etc.) and the (Ford) salesmen knew their guide books very well and knew which book to get out when a customer brought in a particular model of car to trade....
Can you share some other differences for other models such as the base Boxster, 911 C2 & C4 so see if this is a simple anomoly or a Porsche-specific skew? Or alternatively, share the variances on the Boxster S for the 02 & 03 models etc. to see if they close-up?
As a student I worked for one summer as a showroom assistant (polishing, acting as 'balast' on test drives etc.) and the (Ford) salesmen knew their guide books very well and knew which book to get out when a customer brought in a particular model of car to trade....
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