Revisiting the 88 Coupe with 113k miles for 36,900

Mngff · 02-11-2014, 05:25 AM

I have been searching for a Carrera 3.2 for a couple of months and have been actively monitoring these boards, eBay, Craigslist and various dealers to get a feel for what is available.

I came across this 1988 Carrera at GR Gallery which has been the topic of conversation on another thread. Asking price of 36,900

GR Auto Gallery

I have also been reviewing auctions on eBay to get a feel for a realstic price and noticed that the exact same car was sold on eBay in October 2013 for 22,500

eBay auction number 261312053316

1988 Porsche 911 Carrera Diamond Blue 113K Runs Excellent Clean Carfax | eBay

There are a lot of pics on both sites and it looks like the VINs exact matches.

It looks like the car has been cleaned up a little bit, a dent in the front right fender was fixed etc. Maybe some minor mechanical updates. Either way, does this account for the $14,400 extra? That is a 64% appreciation in 4 months. Maybe I am just in the wrong line of business.

Would appreciate everyone's thoughts.

COLB · COLB's Garage

I don't think there is much of a premium on a CE car other than the standard bump for being an attractive color, and being something other than guards red/black/white/silver. They were appearance only packages, and didn't offer a HP bump.

I think they are placing too much value on the CE having cachet with collectors.

That being said, the Ebay seller definitely left some money on the table when he sold it at $22,500. He took decent pictures, but didn't even bother to detail it prior, and that probably cost him money.

Not a lot of detail about mechanical history, and by the looks of the suspension, fittings, and lines, I would assume it is all original. They cleaned up the paintwork some -- repaired chips and scrapes -- I wonder if they resprayed any of it. The dealer put money and effort into making the car more saleable and attractive, but not $14k worth!

They say they fixed the rear main seal, but they didn't bother to clean up any of the oil -- which is pretty caked on and freshlooking on the left heat exchanger and junction between the engine and transmission. You would think if they were going to pull the engine they would take the time & effort to clean it up some. Just driving the car should burn the oil off the heat exchanger, and based on the oil in the Ebay pics, the new dealer didn't do that.

I think there is more leaking than a RMS. Mine looks similar, and it has a leak from the cam oil line, and probably the oil cooler and breather/thermostat/OPS trinity -- I am in the middle of a engine drop to fix those and do some cleaning. This car definitely has/had something leaking from the front (fan side) of the engine as well. Maybe the valve cover was leaking prior to it being replaced when they serviced it, but the oil on the cam chain covers makes me think it is higher up. At that money you definitely want to get a PPI to get a sense of what was done, and what is still wrong. This is not a car to take a risk on (it might have been at $22.9k though!)

It has had a R-134A conversion, but the A/C lines are original, so it was a minimal conversion, and I wouldn't plan on the A/C working without regular charges.

I think $25-28k would be a reasonable price for this car, it being a cosmetically clean coupe with books, tools, and decent originality. Given it is a dealer, add a 10-20% mark up, and I still think this is way over priced -- maybe $5-7k. Asking isn't getting, though. Dealers are pushing the envelope.

I expect it to sit for a while at that money -- much like the Targa at Boca. It has already been for sale at GR for at least two months.

Bet it would sell quickly at under $30k.

DCinVA · 02-11-2014, 11:09 AM

I seems to me that most sellers are being pretty optimistic in terms of pricing. Geez, at least they could clean up all that oil, and nastiness on the underside of the car.

On the other hand, is a beautiful color, and the miles would not scare me away.

I suggest you look at a bunch of cars, when the right one comes along you will know it. Don't force your hand.

Good luck

COLB · COLB's Garage

Compare the engine shots on the CE coupe to this Cassis Red car the same dealer apparently sold:

GR Auto Gallery del=&pr_id=&search=&page=1

A world of difference.

I forgot that the dealer "Jeff" poster on that original thread!

Someone who says he bought a car from them suggested they are pretty straight shooters, but that doesn't been they don't push the price envelope.

ficke · ficke's Garage

Quote:

Originally Posted by Mngff

It looks like the car has been cleaned up a little bit, a dent in the front right fender was fixed etc. Maybe some minor mechanical updates. Either way, does this account for the $14,400 extra? That is a 64% appreciation in 4 months. Maybe I am just in the wrong line of business.

Would appreciate everyone's thoughts.

That is what dealers do they, flip cars for a profit.
They see and buy cars on e-bay and crags list that every body else also saw. The difference is Dealers can look past the dirty windshield, small imperfections that can be fixed for minimal money and the poorly written ads, then they take care of these issues and write nice ads and have the car sitting next to three other cars for the consumer to chose from and then resell the car for a profit.
It works, many dealers are in business and make a living doing the work and taking the chances that the average consumer does not want to do.
64% increase in 4 months is not appreciation, it is dealer mark up.

COLB · COLB's Garage

Quote:

Originally Posted by ficke

That is what dealers do they, flip cars for a profit.
They see and buy cars on e-bay and crags list that every body else also saw. The difference is Dealers can look past the dirty windshield, small imperfections that can be fixed for minimal money and the poorly written ads, then they take care of these issues and write nice ads and have the car sitting next to three other cars for the consumer to chose from and then resell the car for a profit.
It works, many dealers are in business and make a living doing the work and taking the chances that the average consumer does not want to do.
64% increase in 4 months is not appreciation, it is dealer mark up.

64% is not a routine dealer markup. I think 20% is a more normal goal.

The big advantage dealers have is that can buy & sell without paying taxes, title, or registration fees. And their professional association (NADA) guards those perks jealously.

That is 4-8% depending on locality.

Then they also have lower marginal costs for detailing, paint facilities, mechanics, etc.

A dealer makes money on velocity -- not getting absolute top dollar for a car. Better to sell two cars for $3000 profit each per week than to sit on one for two weeks to earn $5000. However, on this car I think the dealer got such a low price they can afford to swing for the fences.

Plus sometimes dealers will hold onto cars like this that generate traffic for their website and their lot -- it is free advertising.

trader220 · 03:17 PM

Does it really matter what he paid for the car? I am not defending the price on this car, which I think is too rich, but what anyone, dealer or not, sells their good for has nothing to do with what they paid for them. People like to hemm and haww about not wanting to trade in their car for less than they owe on it... why? Does what someone owes on goods or what they paid for them have any impact on the current market value? Again, in this case I think the price is over the top, but thats just my opinion on the car, the market will have the last word.

Have you looked at pricing on an air cooled over the last 4 months? IMO its gotten silly. Again IMO the prices I am seeing now as compared to even 4 months ago are OTT.

Looking at the prices on GR's website they all look very optimistic if you asked me. $189k for that low miles 930, $16,9k for a 924, $15k for some sort of VW 959 kit cabrio?

Matt Monson · 02-11-2014, 04:29 PM

Trader220 nails it. What they paid on EBay has nothing to do with what the car is worth. It is just their purchase price. Their listing price is optimistic but my dad taught me in the used car market always start 20% below a dealer's asking price. Doesn't really apply to private party deals. But if you walked in and offered $29k on that car I think you could buy it for not much more than $30. Though even that is high market IMO.

ficke · ficke's Garage

Quote:

Originally Posted by COLB

64% is not a routine dealer markup. I think 20% is a more normal goal.

The big advantage dealers have is that can buy & sell without paying taxes, title, or registration fees. And their professional association (NADA) guards those perks jealously.

That is 4-8% depending on locality.

Then they also have lower marginal costs for detailing, paint facilities, mechanics, etc.

A dealer makes money on velocity -- not getting absolute top dollar for a car. Better to sell two cars for $3000 profit each per week than to sit on one for two weeks to earn $5000. However, on this car I think the dealer got such a low price they can afford to swing for the fences.

Plus sometimes dealers will hold onto cars like this that generate traffic for their website and their lot -- it is free advertising.

Matt and trader220 covered it well.
My only extra would be to say that dealers do not mark up by percent but to market price. For instance if a dealer brought a car for $10,000 and it will retail for $30,000 the will list it for $30,000. regardless of purchase price they will list for retail market price. Now it they brought for $28,000 and retail is $30,000 guess what, list will be $30,000.
What the dealer paid for a car has no bearing on listing/sale price, just the dealers profit margin. The "end users" or retail market, dictates listing price for the dealer.

COLB · COLB's Garage

Quote:

Does it really matter what he paid for the car? I am not defending the price on this car, which I think is too rich, but what anyone, dealer or not, sells their good for has nothing to do with what they paid for them

I'm not questioning that a dealer is going to price a car at what he thinks he can sell it -- and the market determines that, not what he paid for it.

My point is that a dealer doesn't necessarily view things the way a private owner does. A private owner wants top dollar for his car, and can continue to drive it while it is for sale, so he is often willing to sit on a car for months unless he is under duress, or gets the price he wants. That is why you routinely see consignment dealers have cars forever -- the owners won't budge because they tend to look at the sale as a one time transaction, not as the velocity of money.

A dealer generally has a fixed budget for inventory, and then has to generate revenue from turnover. He knows how much inventory he can afford, and how much revenue he has to generate to pay his bills. Of course he is not going to sell a car for 20% more than he paid if he can get 40% in the market. But maximizing revenue on his inventory is a function of both margin per car and number of cars sold. A dealer that sells 30 cars per year for top dollar, clearing a 30% margin per sale, will make less money than a dealer that sells 60 per year at 20% margin (if the cars are of equal value.)

So what explains why a dealer would overprice a car like the GR CE Coupe? One possible explanation is that a dealer might over price a desirable car in a hot market car if he has enough margin on the car that he can afford to hold it for a while, and still make money if he fails to find a gullible punter, and has to sell it at a more realistic market price.

Part of it is a probability calculation. He may be unlikely to sell it at $37k, but if he does, he makes a lot of money. But a dealer may only gamble like that if he has already hedged his bet by getting the car cheaper than normal. He can afford the low probability of a high return because he has enough profit margin locked into the car to meet his revenue target if he can't sell it near asking for a long time.

So, if a dealer was in the car for $26k, he would be much more interested in turning it over quickly for $30k because he is not just interested in the margin, but in the opportunity cost of keeping inventory money on the lot in cars that are not selling.

However, if he is in it for $22.5, he might gamble for a while longer to maximize his revenue because he knows he can sell it cheaper without affecting his revenue stream. Selling it in 8 weeks for 60% margin nets him more revenue per day than selling it in three weeks for 20% margin.

However, after 9-10 weeks on the lot, the return on investment starts to level out -- had he sold it for less, sooner, he could have pocketed the profit, acquired a different car with the returned principle, and be looking at another 20% sale.

And again, if the car is generating a lot of website and lot traffic (and they definitely measure hits different ads generate) then they might hold onto a car longer than they would otherwise because it brings traffic to the business.

Sure a dealer will try to sell a car for the most he can get, but maximizing revenue is not the same thing as selling every car for top dollar.

ficke · ficke's Garage

Colb, You are making good points and I agree with most of them. what I take issue with is your blanket statements.
"A private owner wants top dollar for his car, and can continue to drive it while it is for sale, so he is often willing to sit on a car for months unless he is under duress, or gets the price he wants. That is why you routinely see consignment dealers have cars forever -- the owners won't budge because they tend to look at the sale as a one time transaction, not as the velocity of money."
Private owners have many more different reason to sell than dealers and have many more factors influencing the sell. Dealers sell for profit. That is a dealers only motivation.
I have met private sellers that are as you described, but I have met as many that sell because they need the space, brought another car, want to pay off debt, etc. all reason that make them sell and knowingly not try for top dollar, even take a loss.
I do not buy from private owners who want top dollar, if I did that I would just buy from a dealer.

Matt Monson · 02-12-2014, 07:54 AM

I agree with Ficke. Private sellers are also influenced by the cost of money over time. I sold a car last year to a dealer for $1000 less than I could have gotten private party if I sold it myself. I wanted the car off my credit while I bought my new house and I wanted the equity in the car to buy an atv for my new property. Those needs were worth a $1000 to me. Not all private sales are created equally.

Though on the flip side many private sales are emotional. Look at our friend up in Wyoming. He has 100 cars and is attached to all of them.

COLB · COLB's Garage

Quote:

Originally Posted by Matt Monson

I agree with Ficke. Private sellers are also influenced by the cost of money over time. I sold a car last year to a dealer for $1000 less than I could have gotten private party if I sold it myself. I wanted the car off my credit while I bought my new house and I wanted the equity in the car to buy an atv for my new property. Those needs were worth a $1000 to me. Not all private sales are created equally.

Though on the flip side many private sales are emotional. Look at our friend up in Wyoming. He has 100 cars and is attached to all of them.

Great points, and I totally agree -- I didn't mean to generalize about all private sellers -- just a subset that are focused on not leaving money on the table. Private seller preferences vary more widely than dealers. Some are in love with their cars and over value them, some sell cheap because they need the money, some sell at a discount because of the time value of money -- as you describe.

I've sold a fair number of cars, and usually price them competitively -- primarily because I value my time more than the extra couple of hundred I might make by driving a harder bargain, forcing me to show the car a dozen times, and deal with tirekickers & dreamers. But these were cheaper cars (and a boat & a motorcycle): $3-10k. I've also traded some in where the tax advantage and ease made it worth my while to do so.

When I sold my Boxster, though, I had a much higher reserve price (it was an expensive car -- mid-hi $20s) -- and was willing to hold the car for a long time before selling it.

Eventually, I dropped my asking price $2k because the warranty was due to expire, and the loss in value/depreciation would have made holding the car a losing proposition.

Of course, the markets for newer Boxsters and air-cooled cars are very different. If the Boxster had been appreciating (like 911s) rather than depreciating, and since I didn't need the money for anything else -- I probably would have kept it far longer, and held out for more money.

PushingMyLuck · 02-13-2014, 09:04 AM

Quote:

Originally Posted by COLB

Compare the engine shots on the CE coupe to this Cassis Red car the same dealer apparently sold:

GR Auto Gallery del=&pr_id=&search=&page=1

A world of difference.

I forgot that the dealer "Jeff" poster on that original thread!

Someone who says he bought a car from them suggested they are pretty straight shooters, but that doesn't been they don't push the price envelope.

I compared the 2 engine bays and see almost zero difference.
The only thing different I can see is the fan is cleaner in the cassis car.
What else are you seeing?

Silver $36k

Cassis $34k

PushingMyLuck · 02-13-2014, 09:06 AM

I agree with the $25k-$28k estimate.

They bought very low and are selling very high.
You need to just decide what a car is worth to you, and offer that price.

COLB · COLB's Garage

Quote:

I compared the 2 engine bays and see almost zero difference.
The only thing different I can see is the fan is cleaner in the cassis car.
What else are you seeing?

When I mentioned the engine shots, you instinctively looked at the wrong side.

Part of the reason you have alienated everyone on this board is that you just don't seem to understand these cars, but you act like an expert and Internet tough guy, and challenge those who have WAY more experience than you.

There is no shame in being a newbie -- if you have some humility, and are actually trying learn something from people who know what they are talking about. And I don't include myself in that group of knowledgable posters.

These are the shots I am talking about. And the differences should be obvious:

Cassis Car:

Diamond Blue CE car:

What do these pictures say to you?