Market conditions and 20 year old P-cars

Mark021 · 02:33 PM

any correlation with individual owners?

I'm going to come right out and say it so flame on..... I am here for a fire sale, or at least a market-adjusted one (same thing?).

The economy is in the tank and the only decent thing that I can perceive of the situation is the possibility of obtaining a car that last year I couldn't so rip me up, call me names for desecrating the sanctity of the Porchefile sanctuary (PP).

I'm beginning to see dealers knees buckling with the prices of targas and convertibles coming down noticeably, yet individuals still appear to be operating in a bubble that things haven't changed. I've heard the argument that there will always be a market for these cars alluding that the price will continue to rise, at minimum go flat.

But a lot of the same cars that were being offered for $25K and up are still on the market. They pop up in other maketing tools or go dormant for 6 months only to be resurrected at the same price they were being offered at before the bubble burst. And while I'm at it (ranting that is), what's with the "last chance to own a really great car before I put in on ebay!" thing all about? I've been watching the auctions there as well and I gotta tell you, nobody is selling their car (OK, the rare longnose flip) for more on ebay than they are getting offered on Pelican, so why do they act like it's a big favor to let someone on Pelican pay more for it than on any other venue?

Market price is what people are willing to "pay" for something, not what it's being "offered" for. What part of that don't people get? If you followed the closed auctions on ebay you would find the actual prices being offered for that $25K 1985 Coupe more in the $13K to 17K range before the auction expired or it was actully purchased. I'm not attempting to use that to establish market pricing, anyway the 3 cars that sell out of the 300 offered is a pretty small sample to base anything on.

I look back at the few cars that have been listed on here over the last year that sold within days of being offered and they seem to reflect a price for quality that seems more consistent with current market conditions, and they sold quickly. I'm so tired of seeing decent cars being listed for prices that may sell, but probably not in the current environment and I can't help but wonder... what's the point, just put the thing in the garage for a few years and see what happens, but give me a break, your 85 with 167K that "has new brake pads" and only leaks "a little" with regular maintenence (ie, changed the oil every summer) for $25K firm... I mean really guys!

grudk · 02-02-2009, 03:07 PM

In this 'challenged' economy, you should be able to find a deal. Prices seem 'sticky' with these cars, though, so the best deals are probably ahead of us. That said, I think that 'exceptional' and/or 'rare' cars will hold up better than a lot of other assets will (but still take a beating).

Of course, many sellers believe their car is 'exceptional' when indeed it is ordinary, or worse.
In my various car hunts, I've never bothered to contact the delusional sellers. Waste of time for all.

linklaw · 02-02-2009, 03:20 PM

I don't believe for a second that the SCs or Carrera 3.2s are recession proof. I posted before that I sold a nice 84 Targa with approximately 80K miles in June 1999 for $16.5K. I sold my 1987 Targa last spring with similar miles for $16K. I am seeing 84 to 89 coupes and targas for similar money now and many with asking prices of several thousand less dollars. So much for the idea that these cars are going to continue to appreciate in value or even stay flat. I got a rude wake up call the other day when I checked the auction sales prices of 2005 CarreraS coupes. The car that I paid $59K for a year ago, I would be lucky to get $45K for now. And I thought I got a good deal when I bought it. I think the bottom line is that used porsche values, in general, are declining and will probably continue to do so until the recession is over. As far as there always being a market for these cars, that statement is probably correct, however, the fact that there is a market does not translate into appreciation or even to them holding their current value. John

san augustine · 02-02-2009, 05:59 PM

I am total agreement with you. Two years ago I paid 17k for an 87 G50 Targa and have put quite a bit into since then. I could get maybe 13-14k for the car in this market, but since the car is now sorted out, I have no plans to sell. Though, I am thinking of picking up a well sorted SC coupe if I can get a deal.

ArcticOne · 02-02-2009, 06:20 PM

Agree that there will always be a market for these cars. But agree only in the literal interpretation in that there will always be someone who wants to buy. Price on the other hand does and will fluctuate for a number of reasons.

I actually thought that prices over the past year have either gone up or stayed flat. Looked at a nice 86 coupe last summer (80 000 mi, $ 16 000 and good condition). Seems like the listing prices on eBay and Pelican for a number of "similar sounding" cars is not much different, if not higher than that.

I too am waiting for the drop. But I figure the drop will only be in the 10 - 30 % range, which in the grande scheme of life is really not many $$ on a $ 20 000 car.

Figure that over the next few months there could be a bigger drop as the fall / winter employment reductions start hitting people full force. People don't bail on their toys until forced to and that doesn't happen immediately upon getting laid off - there is still an element of optimism that says there is another job. A few months later and that optimism changes to surviving and the toys start going out the window.

There are a number of reports out there stating which areas of the country are being hit the hardest - wonder if there is a correlation between that and the prices of used autos? For the person with the right amount of time there could be some bargains, but not necessarily close to home.

And finally, hopefully this drop will also reduce the ability or enthusiasm of the Resellers to scoop the low priced cars in hopes of a quick profit.

Sorry for the length of this - me bad, and me done now.

jb

GothingNC · 04:22 AM

I noticed the values of so-so cars with some issues and high mileage P-cars are coming down but the cost of maintenance, parts and labor remains steady and slowly increasing...

Will we start seeing more air-cooled 911's being parted out during the year that normally would have been saved since the cost of maintenance and parts are still increasing?

It wouldn't make sense for an owner to spend 8-10k for a proper engine rebuild if the 911 is only worth 12k or less after the job is completed..

Macroni · Macroni's Garage

Mark,
Screaming deals are in the 996 category. Here are three listed on pelican. The yellow looks deadly!

http://forums.pelicanparts.com/showthread.php?t=452890
http://forums.pelicanparts.com/showthread.php?t=449158
http://forums.pelicanparts.com/showthread.php?t=452828

Nice G50s or low mileage SC etc... are not going to hit the discount rack for awhile unless you find a desperate seller. Most private individuals w/ the "A" vehicles have cherished them and in most cases will hold vs. liquidate.

Your best bet to find what you are looking for is at the dealership. I would contact them with your requirements as they often take creampuffs in on trades. They do not pay much and are willing to move the merchandise. They would rather sell to you than a reseller or wholesaler. Slightly higher profit, future customer and all that.....

TheGanzman · 02-03-2009, 08:45 AM

Remember to factor in THIS too - many "Porsche Owners" are:

- MULTIPLE Porsche owners
- Fairly "well-heeled"
- Are themselves in relatively "recession-resistant" bubbles - doctors, lawyers, entertainers, etc.

I'm in the vintage guitar world myself - I authenticate $200K-$750K 1958-1960 Gibson Les Paul guitars. Is the market for those guitars "stagnant" now? You bet! Are there more of those guitars "for sale" now? Yep! But here's the thing - the guys selling these guitars now are virtually ALL multi-millionaires. My typical client for buying OR selling maybe went from making $10MM three years ago to making ~$6MM THIS year. So maybe he'll "thin the herd" alittle by putting 1-2 of his collection of Les Pauls up "for sale". If they sell, fine; if not, no big deal. I'm also seeing the REALLY choice "A-List" guitars are just plain NOT coming up for sale, and if the ARE, they're selling quickly and privately for maybe 10-20% off of what they would have sold for 2 years ago...

So what I'm seeing by analogy are the "daily drivers" available now; I think that's what you'll see in the Porsche world too. You'll see the choice cars for sale too - just not as MANY as before, and at prices that are the same or maybe 10-20% lower than last year. My own '88 Carrera Coupe with 42K miles will probably go back to TruSpeed Motorcars this very week "on consignment". Frankly, I won't accept less than 10% LESS than I paid for it (minus sales tax; that's a lick on ME) - it's costing me $250/year to insure, and frankly, I need the garage space! If it sells, fine; if not, I'm in no hurry. I'm not in dire need for the dough; meanwhile, I'll put it somewhere where somebody might see it that HAS to have it, and who DOES have the money...

For every "horror story" we hear about on TV or read in the paper about someone losing his/her job, there's 150 stories we DON'T hear about people STILL making decent $; most of that demographic have always been pretty discrete about their incomes, and are now even MORE so; just my 25 cents...

Mark021 · 02-03-2009, 10:20 AM

all very valid and insightful points,

thanks everyone for the feedback, it seems to be validated by who and where some of the notable cars are starting to pop us, auto mfg areas.

I appreciate that it's very hit or miss, the great daily driver with $10K worth of work recently done that needs to go for financial reasons or as one poster stated, a person who is financially insulated that just isn't going to spend a lot of time over a couple K one way or the other and needs to make room.

Patience I guess....

Mark021 · 02-03-2009, 10:55 AM

One question for Ganz,

I don't want to sound confrontational here but I'm curious.

How much is a typical consignement fee and do they store it on site? It would seem that this could easily eat into the profit that it may just be easier to let it go for a little less.

Just curious and appreciate the earlier feedback.

Mark

TheGanzman · 02-03-2009, 12:48 PM

Quote:

Originally Posted by Mark021

One question for Ganz,

I don't want to sound confrontational here but I'm curious.

How much is a typical consignement fee and do they store it on site? It would seem that this could easily eat into the profit that it may just be easier to let it go for a little less.

Just curious and appreciate the earlier feedback.

Mark

I have no idea what their "typical consignment fee" is. In MY case, I've "bartered" some work with the owner, so MY "consignment fee" has been waived. And yes, it will be onsite in their showroom; I'll probably take it there next week...

gsjohnson · 07:34 PM

I'm a guy who makes well into the six figure bracket and my business has been severely impacted economically. My salary has remained the same, but I am still nervous. I have my daily driver, a Supercharged 04 Mustang GT (with a payment) on the market and I just picked up an 02 Ford SVT Focus (30 mpg) for $6500 cash to replace it. I sold my 2001 996 and my Ferrari, and banked some significant dough and there was quite a bit of insurance savings that went along with this as well. I just bought a 72 911T and still banked the remainder in reserve. I bought the 911T low and plan on keeping it for years to come. I have not been personally impacted financially from the recession yet, but I am protecting myself. I can't believe that I am the only one being very careful and thus it is these types that are also impacting the prices.

TheGanzman · 02-03-2009, 02:49 PM

Quote:

Originally Posted by gsjohnson

I'm a guy who makes well into the six figure bracket and my business has been severely impacted economically. My salary has remained the same, but I am still nervous. I have my daily driver, a Supercharged 04 Mustang GT (with a payment) on the market and I just picked up an 02 Ford SVT Focus (30 mpg) for $6500 cash to replace it. I sold my 2001 996 and my Ferrari, and banked some significant dough and there was quite a bit of insurance savings that went along with this as well. I just bought a 72 911T and still banked the remainder in reserve. I bought the 911T low and plan on keeping it for years to come. I have not been personally impacted financially from the recession, but I am protecting myself. I can't believe that I am the only one being very careful and thus it is these types that are also impacting the prices.

But I'm gonna guess that you didn't "dump" the 996 and the Ferrari...

gsjohnson · 03:15 PM

I made 5K on the F-car and took a bath on the 996. In all fairness, my F-car was a vintage (1965) car whereas the 996 of course was not. I sold both cars within the last 60 days. Two down, one to go...
I've got 40K in my 04 Mustang GT with the blower (425 HP) and I'll be lucky to get 15K for it.

RacerX1166 · 02-03-2009, 07:22 PM

Ganz is right on the money here.

The individual owners of the cars for sale, in most cases, don't need the money to survive.

In contrast, the dealers selling these cars do. Therefore, they'll lower their prices to move the inventory. If they break even, at least they get rid of the monthly carrying cost.

That's why you see the difference in the two markets.

gsjohnson · 02-03-2009, 07:42 PM

Was my daily driver and now has 34,000 miles

Mark021 · 02-03-2009, 08:23 PM

Dump is a relative term, there are people whose time is more important than attempting to recoup their total cost is all. They probably don't spend much time on these sites but I think they are aware of them as they have an interest.

My position is simply that the market is definately slipping and for every ten of the well-off guys who are obsessive about these cars I'm hoping there's one that just enjoys the process because he can afford to dabble and doesn't micromanage it like the true obsessed.

I'm going to be opinionated here and make a prediction that most of the 20 year old cars that people paid in excess of $28K for (nice drivers with ~100K or less, not concours) and are anticipating trading at even or flat (and they haven't spent $15K documented on upgrades) are going to be in for a rude awakening. The target market for these things is shifting and demand is not going to keep up with supply and the actual value of the 3.2 cars are very fragile, there's way too many of them to be truly special and parts and maintenence will probably outpace demand and uniqueness given the demographic is soon going to start eating oatmeal for dinner and compare ailments all day long.

The truth is the market is pricing most of these cars at about 60% to 70% of what the emotionally attached owners are able to accept right now and probably 80% of the cars are not moving anywhere near the asking. Just like the stock market there will be a time when people holding onto these things waiting for the rebound will get tired of waiting and then they will start to move at the adjusted rate as the funds will be better utilized somewhere else.

And there will always be owners who just don't care to spend too much time on it.

http://forums.pelicanparts.com/showthread.php?t=448449&highlight=coupe

http://forums.pelicanparts.com/showthread.php?t=442615&highlight=coupe

http://forums.pelicanparts.com/showthread.php?t=435092&highlight=coupe

Macroni · Macroni's Garage

Mrak,
They were all motivated sellers. They are currently the exception. Maybe that will change as the oatmeal gets eaten......... There currently is a 1970 S w/ 93,000 miles listed on the EarlyS registry for $125,000. I guess the seller didn't get the memo.

Sunroof · 02-04-2009, 07:00 AM

Your talkin "20-year old" cars so thats back to 89 or to the earliest Carrera (1984), unless your tossing the SC (1978-1983) in the mix. This market has had fluctuations with these models even before this economic mess. I am sure if you searched well enough you might find a great deal, but you'll have to search hard for a longhood model thats well sorted. I do not believe many longhood owners who use these vehicles more for weekend use then daily drivers like the aforementioned models, are going to part with their cars that easily. A lot of money goes into restoration and upkeep of these models and are thought of more as investment pieces. I know the last thing I would depart with if disaster ever struck was my 1973.5T. You'll have to "pry my cold dead fingers from the wheel" if that we ever to happen. Longhood owners are a strange breed who honor the marque, stand a different way and look at their cars as time capsules, to be honored, protected and valued!!!!! We are nuts!!!!!!!!!!!!

With that if you want to join in on owning a piece of Porsche history that will continue to appreciate as far as I am concerned, you can have my restored 1973.5T for nothing less than 30K! Ah heck, make that 40K.

Regards
Bob

Mark021 · 02-04-2009, 07:07 AM

Apples and Oranges Mac,

FYI, I do mean to be a little confrontational only in that it forces out more concrete debate.

Please don't take offense. And Gazman, my appreciation is you purchased a nearly immaculate gorgeous blue (one of my favorites) 88 (also one of my desires as it has the rear shoulder harness for small children).

Gazman's near perfect low milage car is basically a show car form what I can tell and of course will be worth more. The late 60's and early 70's cars for that kind money are not even cars really, they are collectors items and their value is truly based on an intangible I'll never have the luxury to appreciate, like diamonds (a rock) and not to knock Ganzman's world as I find it fascinating, but the collector's guitars, does it really have so much to do with how much better they play or is it really about bragging rights and the expectation (apparently a very valid one) that they may appreciate at a much better rate than many other investments.