New vs Used
#1
03-18-2014, 08:26 AM
New vs Used
This is an interesting article. It could as easily be New Porsche vs used Jaguar or New Jaguar vs used Ferrari.
Source: http://dougdemuro.jalopnik.com/here-...w-p-1542398742
Originally Posted by Doug Demuro @ Jalopnik
Despite all the comments about fire risk and Italian craftsmanship, I still think it's a better idea to buy a used Ferrari than a new Porsche. Here's why.
Before I bought my car, I turned to you for feedback. You probably remember this, because you gave me feedback. Yes, you. All of you. Even if you're visiting this site for the first time from some faraway place that just got Internet, such as Idaho, and your automotive expertise is limited to logging vehicles, I probably heard from you. ("Buy a logging vehicle," you probably said. "Great for logging.")
I know I heard from you because I got 1,600 replies to my Jalopnik column, hundreds of tweets, dozens of e-mails, and numerous text messages, none of which suggested the Ferrari 360. Then I bought a Ferrari 360.
Of course, I was prepared for all those suggestions, largely because I had asked for them. What I wasn't prepared for was what came after suggestions. I'll call them the "Could'ves."
For those of you who have never experienced this phenomenon, allow me to explain the actions of a Could've. What happens is, you purchase a car. It doesn't have to be a Ferrari. It could be any car. It could be a Ford Taurus. It could be an Infiniti J30. (Remember that? With the bizarre melted shape? That they thought would be stylish? And only old people bought it?)
Anyway: you purchase a car. And then you tell your friends about the car. And inevitably, one of them, scorned by the fact that you didn't take his suggestion, lists all the cars you could've bought, the implication being that you messed up, and his choices would've been far superior.
Now, I admit, I'm all for a nice game of "Would you rather?" You know this if you follow me on Twitter, where I am constantly posting pictures of my Ferrari next to other cool cars with the caption "Would you rather?", and you are constantly telling me to move my Ferrari immediately or else it'll catch the other car on fire.
But the Could've thing is a little more annoying, because it suggests I've made a terrible blunder, while simultaneously noting that person speaking to me wouldn't have made such a silly mistake. So I've decided to devote today's column to addressing the Could've that I've heard most often: you could've bought a new Porsche 911. My response is: no, I couldn't. Because it's too expensive.
Before I explain myself, some numbers. A base-level 2014 Porsche 911 Carrera has 350 horsepower to the Ferrari's 400 horses, while the 911's torque number is 287 lb-ft to the Ferrari's 275. Zero-to-60 is about 4.4 seconds with the Ferrari, compared to 4.5 seconds in the Porsche. And a no-options 911 Carrera starts around $85,000 with destination, which is roughly what I paid for the Ferrari. So they're pretty similar on paper.
Only, the Porsche is way more expensive.
The reason for this is, of course, the famous foe of anyone who has ever purchased a new car: depreciation. But rather than just say "the 911 loses more value," I'm going to provide you with a few numbers that are surprisingly sobering.
The first number is the actual new price of a Porsche 911. While the car's starting figure is around $85,000, no one orders a "stripper" Porsche 911 — and that makes the average asking price for a new 2014 model closer to $100,000. To be fair, we'll call it $98,000.
The next number is the value of a one-year-old Porsche 911. A quick check on AutoTrader reveals that the average asking price for a 2013 model is somewhere in the $83,000 to $86,000 range. That means owning a 911 for a year costs between $12,000 and $15,000 in depreciation alone.
Moving on to 2012 models, prices drop to somewhere in the mid-$70,000 range. Of course, you can see where I'm going with this: a 2011 model, which is the old "997" bodystyle, brings the average asking price down to the mid-$60,000 range. In other words: you'll spend around $35,000 just to own a 911 for three years.
Now, let's pretend you instead bought my Ferrari. The average price of a 2004 model is somewhere around $90,000. Change the year to 2003, and you'll see almost no difference in price. A 2002 model is in the mid- to high-$80,000 range, while a well-optioned 2001 coupe is still around $83,000. In other words: over the same time period where you've lost $35,000 in depreciation to a new 911, you would lose $7,000 with a used Ferrari.
Of course, I already know what you're thinking, and that is: WHAT ABOUT MAINTENANCE? Actually, based on some of the comments on my last column, you might be thinking something more like EDIT
In that case, I must respond: calm down. Take a step back. Breathe. Compose yourself. Relax. This is the Internet, and that means you couldn't drive a log through my skull even if you wanted to, so neener neener neener!
But of course, maintenance is a severe concern. After all: we're talking about a used vehicle put together by the Italians. These are the same people who rolled over that cruise ship like a stunt driver in a James Bond movie. The same people who sent scientists to jail for not predicting an earthquake. The same people who keep trying that girl for murder, no matter how many times she tells Katie Couric she didn't do it.
And maintenance is what Porsche people always bring up when they insist I Could've bought a 911. "Sure, the Porsche will lose more value," they say. "But at least it won't blow up!" And then they chuckle a few times, while simultaneously wondering whether they'll ever be able to take delivery of their 991 GT3.
And yet… the Ferrari's maintenance isn't so bad.
If you go on the 360 forums – and I don't, because they probably hate me ever since I strapped a TV to the roof of mine – you'll find that most owners say they spend an average of $1,000 to $3,000 every year on maintenance. Every four or five years, you have to do a belt service that costs about $4,000. And that's it.
In other words: if you own the 360 for three years, and your ownership period falls between major services, you're probably not looking at more than $3,000 to $6,000 in maintenance. And some of that figure includes wear items like tires and brakes – items you'd also have to pay for in the Porsche. Add that to depreciation, and you're looking at $10,000 to $13,000 to own a Ferrari for three years – or roughly a third of what it would cost to drive the Porsche. Compared to the Porsche, that's a lot of money left over for fire extinguishers.
Now, I'll grant you that the Ferrari is more likely than the Porsche to suffer a serious problem. It's more likely to strand you, an accident will have a larger effect on its value, and it's more likely to give you cause for concern when you park it at Target. But to me, that's all part of the charm of Ferrari ownership. And if you don't like it, you can always get a second car. May I suggest a Nissan Cube?
Before I bought my car, I turned to you for feedback. You probably remember this, because you gave me feedback. Yes, you. All of you. Even if you're visiting this site for the first time from some faraway place that just got Internet, such as Idaho, and your automotive expertise is limited to logging vehicles, I probably heard from you. ("Buy a logging vehicle," you probably said. "Great for logging.")
I know I heard from you because I got 1,600 replies to my Jalopnik column, hundreds of tweets, dozens of e-mails, and numerous text messages, none of which suggested the Ferrari 360. Then I bought a Ferrari 360.
Of course, I was prepared for all those suggestions, largely because I had asked for them. What I wasn't prepared for was what came after suggestions. I'll call them the "Could'ves."
For those of you who have never experienced this phenomenon, allow me to explain the actions of a Could've. What happens is, you purchase a car. It doesn't have to be a Ferrari. It could be any car. It could be a Ford Taurus. It could be an Infiniti J30. (Remember that? With the bizarre melted shape? That they thought would be stylish? And only old people bought it?)
Anyway: you purchase a car. And then you tell your friends about the car. And inevitably, one of them, scorned by the fact that you didn't take his suggestion, lists all the cars you could've bought, the implication being that you messed up, and his choices would've been far superior.
Now, I admit, I'm all for a nice game of "Would you rather?" You know this if you follow me on Twitter, where I am constantly posting pictures of my Ferrari next to other cool cars with the caption "Would you rather?", and you are constantly telling me to move my Ferrari immediately or else it'll catch the other car on fire.
But the Could've thing is a little more annoying, because it suggests I've made a terrible blunder, while simultaneously noting that person speaking to me wouldn't have made such a silly mistake. So I've decided to devote today's column to addressing the Could've that I've heard most often: you could've bought a new Porsche 911. My response is: no, I couldn't. Because it's too expensive.
Before I explain myself, some numbers. A base-level 2014 Porsche 911 Carrera has 350 horsepower to the Ferrari's 400 horses, while the 911's torque number is 287 lb-ft to the Ferrari's 275. Zero-to-60 is about 4.4 seconds with the Ferrari, compared to 4.5 seconds in the Porsche. And a no-options 911 Carrera starts around $85,000 with destination, which is roughly what I paid for the Ferrari. So they're pretty similar on paper.
Only, the Porsche is way more expensive.
The reason for this is, of course, the famous foe of anyone who has ever purchased a new car: depreciation. But rather than just say "the 911 loses more value," I'm going to provide you with a few numbers that are surprisingly sobering.
The first number is the actual new price of a Porsche 911. While the car's starting figure is around $85,000, no one orders a "stripper" Porsche 911 — and that makes the average asking price for a new 2014 model closer to $100,000. To be fair, we'll call it $98,000.
The next number is the value of a one-year-old Porsche 911. A quick check on AutoTrader reveals that the average asking price for a 2013 model is somewhere in the $83,000 to $86,000 range. That means owning a 911 for a year costs between $12,000 and $15,000 in depreciation alone.
Moving on to 2012 models, prices drop to somewhere in the mid-$70,000 range. Of course, you can see where I'm going with this: a 2011 model, which is the old "997" bodystyle, brings the average asking price down to the mid-$60,000 range. In other words: you'll spend around $35,000 just to own a 911 for three years.
Now, let's pretend you instead bought my Ferrari. The average price of a 2004 model is somewhere around $90,000. Change the year to 2003, and you'll see almost no difference in price. A 2002 model is in the mid- to high-$80,000 range, while a well-optioned 2001 coupe is still around $83,000. In other words: over the same time period where you've lost $35,000 in depreciation to a new 911, you would lose $7,000 with a used Ferrari.
Of course, I already know what you're thinking, and that is: WHAT ABOUT MAINTENANCE? Actually, based on some of the comments on my last column, you might be thinking something more like EDIT
In that case, I must respond: calm down. Take a step back. Breathe. Compose yourself. Relax. This is the Internet, and that means you couldn't drive a log through my skull even if you wanted to, so neener neener neener!
But of course, maintenance is a severe concern. After all: we're talking about a used vehicle put together by the Italians. These are the same people who rolled over that cruise ship like a stunt driver in a James Bond movie. The same people who sent scientists to jail for not predicting an earthquake. The same people who keep trying that girl for murder, no matter how many times she tells Katie Couric she didn't do it.
And maintenance is what Porsche people always bring up when they insist I Could've bought a 911. "Sure, the Porsche will lose more value," they say. "But at least it won't blow up!" And then they chuckle a few times, while simultaneously wondering whether they'll ever be able to take delivery of their 991 GT3.
And yet… the Ferrari's maintenance isn't so bad.
If you go on the 360 forums – and I don't, because they probably hate me ever since I strapped a TV to the roof of mine – you'll find that most owners say they spend an average of $1,000 to $3,000 every year on maintenance. Every four or five years, you have to do a belt service that costs about $4,000. And that's it.
In other words: if you own the 360 for three years, and your ownership period falls between major services, you're probably not looking at more than $3,000 to $6,000 in maintenance. And some of that figure includes wear items like tires and brakes – items you'd also have to pay for in the Porsche. Add that to depreciation, and you're looking at $10,000 to $13,000 to own a Ferrari for three years – or roughly a third of what it would cost to drive the Porsche. Compared to the Porsche, that's a lot of money left over for fire extinguishers.
Now, I'll grant you that the Ferrari is more likely than the Porsche to suffer a serious problem. It's more likely to strand you, an accident will have a larger effect on its value, and it's more likely to give you cause for concern when you park it at Target. But to me, that's all part of the charm of Ferrari ownership. And if you don't like it, you can always get a second car. May I suggest a Nissan Cube?
Last edited by Cambo; 03-18-2014 at 06:41 PM. Reason: edited to show quoted article and source
#2
03-18-2014, 08:38 AM
Veteran Member
So many variables with the ownership of cars. The initial cost is just the beginning.
But people buying Porsche's, Ferrari's, Jags, Aston Martin, etc...they aren't necessarily looking at cost as their main factor. Usually there is some brand loyalty involved regardless of cost, or "could've's".
But people buying Porsche's, Ferrari's, Jags, Aston Martin, etc...they aren't necessarily looking at cost as their main factor. Usually there is some brand loyalty involved regardless of cost, or "could've's".
..
#5
03-18-2014, 09:58 AM
Veteran Member
I like the logic and tried applying it to buying a 575 before I bought the XKR. I still would LOVE to have the 575 and its value if taken care of would actually rise in a ten year period of ownership. What stopped me was the insurance of driving it daily and as OCD as I am with my XKR, I would be a nervous mess with the Ferrari.
#6
03-18-2014, 10:09 AM
My cousin bought a 360 new and never wanted to drive it so that it wouldn't lose its value. I often wondered why in hell anyone would buy such a beautiful piece of machinery, art really, and not enjoy driving it. In any event, he sold it last year, in the throat of the recession, at a huge loss. It only had 11,000 kms on it. I'd hate to think what ownership cost if broken down by km. driven.
#7
03-18-2014, 10:19 AM
Veteran Member
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#9
03-18-2014, 10:57 AM
Having looked extensively at 911s (and Caymans) prior to buying my XKR-S, I'd take a bit of issue with the author's assessment of P-car depreciation. While you can absolutely find a bunch of 911s that devalue quickly, they're not really the cars that most of us are looking for... we want the 4, the 4S, the Turbo. And these cars (on average) hold proportionally more of their value.
Making an economic argument in favor of a Ferrari feels to me like more of a rationalization; the true decision is driven by the (very real) exclusivity and reputation of the marque. You buy the Ferrari because, first and foremost, it's a Ferrari.
Rich
Making an economic argument in favor of a Ferrari feels to me like more of a rationalization; the true decision is driven by the (very real) exclusivity and reputation of the marque. You buy the Ferrari because, first and foremost, it's a Ferrari.
Rich
#10
03-18-2014, 01:57 PM
Veteran Member
I have to agree with what Rich says. The 911 is certainly the more reliable car and definitely can be used as a daily driver. A Ferrari never holds up to three hours full throttle on the Autobahn, then boiling for an hour in a traffic jam to then again redline to redline for another hour and that on a daily basis.
Furthermore you are comparing the depreciation of a new car that goes through the first three year, undoubtly, highest depreciation years, to a ten year old car which is at the end of its depreciation.
The Porsche is built in tens of thousands and the Ferrari just mere thousands.
For the same money I'd rather drive a reliable 911 with the latest gadgets versus a car with a ten year old stereo which may need a shock/strut/break disk replaced.
Of course it depends what you bought the car for. A daily driver or just for the C&C meets ....
At the end you are comparing the three costliest years of a car to the annual cost of ownership of a car that already had a decade of depreciation experienced.
Kinda like .... oranges and apples ... you know.
Now if you compare the fun, soul and heart, I am with, but coming up with a scenario where the Ferrari makes more sense than the 911 .... maybe a Volvo would be best suited.
Furthermore you are comparing the depreciation of a new car that goes through the first three year, undoubtly, highest depreciation years, to a ten year old car which is at the end of its depreciation.
The Porsche is built in tens of thousands and the Ferrari just mere thousands.
For the same money I'd rather drive a reliable 911 with the latest gadgets versus a car with a ten year old stereo which may need a shock/strut/break disk replaced.
Of course it depends what you bought the car for. A daily driver or just for the C&C meets ....
At the end you are comparing the three costliest years of a car to the annual cost of ownership of a car that already had a decade of depreciation experienced.
Kinda like .... oranges and apples ... you know.
Now if you compare the fun, soul and heart, I am with, but coming up with a scenario where the Ferrari makes more sense than the 911 .... maybe a Volvo would be best suited.
#12
03-18-2014, 02:42 PM
You can drive the Porsche for 150K miles with no major repairs. Your Ferrari won't last that long (I suspect) and it will certainly be pretty worthless by then. So your new depreciation v 10yr old depreciation theory is pretty thin. Where it breaks down is how mileage affects the value. As miles climb on a Ferrari, the values drop like a stone. Not so much with the Porsche. Someone will buy it strip it, make it a track toy etc for the next 25+ years. This comes from a Lotus guy that doesn't even like Porsches BTW.
#13
03-18-2014, 02:56 PM
Veteran Member
Here's my take, if it's worth anything.
I bought a 2009 XKR Portfolio Edition Convertible 10 months ago (May 2013) for approximately $46,500 with 13,500 miles. I could sell the car today and NOT lose any money at all, if any; a very small amount. I am sure I could list it for the $46,000 (now with 15,000 miles) on it and probably get it, maybe $1,500 to $2000 less for $44,500.
So far, my cost for maintaining the XKR is $125.00 for the oil change, filter and total inspection by the Jaguar dealer after 10 months of ownership.
Other than the maintenence, I did spend $1565.00 for the new wheels and $180.00 for the hydrocoating of the engine cover in the Silver Carbon Fiber pattern which most of you have seen.
So the XKR was been a great deal so far for me. I have the original OEM wheels that can always be put back on the car and I have the ability to sell the new Braelin BR02 wheels. The XKR has been very low cost to me over 10 months.
In August 2013, I bought a 2014 Porsche Cayman 981......MSRP was $73,500 and I ended up paying $66,600 for the 981. I have not put any money into it for any maintenence as of yet. Trade value is at $65,000 to $66,000 depending on options. I have aproximately 1550 miles on the 981.
I was considering the 2013 Ferrari 458 Spider Convertible that had a offer price of $320,000 to $322,000 (base model) $340,000 with options....but being so far away from a Ferrari dealership (Scottsdale, AZ 500 miles away) I passed on that notion of buying it. You can find used 2013 Ferrari 458 Spider's on eBay ranging from $275,000 to $320,000 with ultra low miles.
I have no regrets owning the used XKR and buying the 2014 Porsche Cayman 981 new. My thoughts on owning and buying the Porsche new was that because of the Porsche brand and the new re-design of the 2014MY, and the good price which I paid, the car would not suffer a depreciation ratio like that of other premium sports cars.
So far, so good. Both the XKR and 981 are considered low driven mile per year cars for insurance purposes and expect no more than 4000 miles on each car. Both the XKR and 981 remain in showroom condition and I believe that is very important aspect to retention of market values.
So, in my case, the Ferrari would not have worked out. I am quite pleased being able to own both the XKR and the Porsche 981 for a fraction of the cost if buying the Ferrari 458 Spider. I also could NOT justify spending $320,000 for an automobile, whether it is a Ferrari or not.
I bought a 2009 XKR Portfolio Edition Convertible 10 months ago (May 2013) for approximately $46,500 with 13,500 miles. I could sell the car today and NOT lose any money at all, if any; a very small amount. I am sure I could list it for the $46,000 (now with 15,000 miles) on it and probably get it, maybe $1,500 to $2000 less for $44,500.
So far, my cost for maintaining the XKR is $125.00 for the oil change, filter and total inspection by the Jaguar dealer after 10 months of ownership.
Other than the maintenence, I did spend $1565.00 for the new wheels and $180.00 for the hydrocoating of the engine cover in the Silver Carbon Fiber pattern which most of you have seen.
So the XKR was been a great deal so far for me. I have the original OEM wheels that can always be put back on the car and I have the ability to sell the new Braelin BR02 wheels. The XKR has been very low cost to me over 10 months.
In August 2013, I bought a 2014 Porsche Cayman 981......MSRP was $73,500 and I ended up paying $66,600 for the 981. I have not put any money into it for any maintenence as of yet. Trade value is at $65,000 to $66,000 depending on options. I have aproximately 1550 miles on the 981.
I was considering the 2013 Ferrari 458 Spider Convertible that had a offer price of $320,000 to $322,000 (base model) $340,000 with options....but being so far away from a Ferrari dealership (Scottsdale, AZ 500 miles away) I passed on that notion of buying it. You can find used 2013 Ferrari 458 Spider's on eBay ranging from $275,000 to $320,000 with ultra low miles.
I have no regrets owning the used XKR and buying the 2014 Porsche Cayman 981 new. My thoughts on owning and buying the Porsche new was that because of the Porsche brand and the new re-design of the 2014MY, and the good price which I paid, the car would not suffer a depreciation ratio like that of other premium sports cars.
So far, so good. Both the XKR and 981 are considered low driven mile per year cars for insurance purposes and expect no more than 4000 miles on each car. Both the XKR and 981 remain in showroom condition and I believe that is very important aspect to retention of market values.
So, in my case, the Ferrari would not have worked out. I am quite pleased being able to own both the XKR and the Porsche 981 for a fraction of the cost if buying the Ferrari 458 Spider. I also could NOT justify spending $320,000 for an automobile, whether it is a Ferrari or not.
#14
03-18-2014, 03:14 PM
Nothing new added here to the well known pros and cons of buying new vs used. That applies perfectly for buying a new vs 3 or 4 year old used Camry, Jaguar, Porsche, but definitely not a new Porsche vs much older Ferrari. Not even close. Love all Ferraris, but buying an old one wouldn't likely ever even be a consideration for someone buying a new Porsche with warranty unless he was looking for a garage queen that would see little use.
The depreciation and maintenance costs of a Ferrari is low only when you don't drive it. Neither of those would be a primary concern for the person passing up a used 360 to buy or lease a new Ferrari to enjoy the latest and care-free motoring with factory warranty.
The depreciation and maintenance costs of a Ferrari is low only when you don't drive it. Neither of those would be a primary concern for the person passing up a used 360 to buy or lease a new Ferrari to enjoy the latest and care-free motoring with factory warranty.
#15
03-18-2014, 03:28 PM
Veteran Member
Two of my best financial buys were the 2 Lamborghinis that I owned. I had them for may years, I drove the heck out of them and sold both for just about exactly what I paid for them. That even included crashing one at Laguna Seca.
The only other vehicle that approached that deal was a motor home that I actually sold for more than what I paid for it. The rest of my many cars; typical large depreciation.
So, sometimes the cheapest alternative is to buy a used exotic.
The only other vehicle that approached that deal was a motor home that I actually sold for more than what I paid for it. The rest of my many cars; typical large depreciation.
So, sometimes the cheapest alternative is to buy a used exotic.