state of the porsche collector car market: up, down or sideways€¦ · built (no porsche supercars...
TRANSCRIPT
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State of the Porsche Collector Car Market: Up,
Down or Sideways Presented by Nathan Merz
Tech Tactics West-November 2016
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Presentation Summary • Who has been to my presentation before? • Introduction — Who is your presenter? • Basic Caveats • This Crazy Current Market! Updates from Summer 2016 to Current • Overview of the Models: What’s hot, what’s up and what’s down • Are We in a Bubble? • Prices • What do the Grades mean? • Factors affecting price • Where to find/ Where to list • Safe payment and titles • Q&A
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Who is Your Presenter? • Lifelong Porsche Fanatic with a passion for the
history, engineering and experience of the brand
• I have owned almost every model of Porsche built (No Porsche Supercars though…) from 356’s to 991’s with a particular affinity for Air-Cooled 911’s
• Just like many of you I always thought this would be a dream job, well here I am!
• I work with clients all over the World to help them both buy and sell Porsche’s of the finest quality
• I buy/sell ~120 Porsche’s per year and inspect hundreds of them, I see Porsche’s in my sleep…
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Basic Caveats
• The Porsche market is dynamic and fast moving, this presentation was out of date just after I completed it!
• I can’t possibly cover every nuance, market niche or model
• There is always an outlier or exception to every rule
• Please buy the Porsche that fits your intended purpose
• These are opinions grounded in my experience, not a guarantee!
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“Crazy” Current Market Hagerty—Collector Portfolio as of June 2016- Parade
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“Crazy” Current Market Hagerty—Collector Portfolio
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So… Overall Market??
Simple Answer The market has entered a plateau phase after 5 years of record growth.
Complex answer The Porsche market is still excellent; some models are still SCORCHING hot, some are warm, many are flat and a few are dropping (but not to previous levels!).
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Scorching, About Right, Cooling Off
• Scorching- True #1 & 2 Survivors, 964 manual coupes, 3.2 Carrera G50 Coupes, 3.2 M491, Mid-Year 1974-1977, 1976-1977 Carrera 3.0,, Euro only RS models (964RS,993RS, GT2), 996TT, 914 2.0 73-74,928 early and late
• About Right- 356 all models, SWB, Longhood LWB 69-73, 1974-1976 Carrera 2.7, 1978-1986 911, 930 1975-1977 &1989, 993 NA, 996 & 997 GT2 & GT3 especially RS, 991 GT3 RS,Cayman GT4, Any watercooled Porsche (986,987, 996,997), 991 GT3, 928, 944 Turbo
• Cooling Off- Early “S”, 73 Carrera RS, 1989 Speedster, 930 1978-1988,RS America, 993 C2S + C4S, 993TT, 991- Apart from 991 almost entirely due to over saturation on market.
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Current Great Values? • Any Mezger Motor Based Turbo’s: 996TT, 997TT • 911SC and 3.2 Carrera 915 cars • Air-cooled 911 Open Cars • 914 2.0 liter • 2006-2012 997 • 2006-2012 987 • Well Sorted 996/986 • Any previously hot model if it can be bought at a discount! • “Panicked” sellers….
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Are We in a Bubble? • Simple Answer- NO, a bubble “POPS”. The market is simply
correcting.
• The market seems to have peaked ~ Summer 2015
• In the past 6 months several models have flattened or shown slight decline
• Large number of speculators had entered the market
• A greater supply of inventory has recently come on the market vs. 12 months ago
• Growth rates were not sustainable on many models
• Driver quality and lower cars trading for strong money is predictive of a concern
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My Prediction • Incorrect Pricing will lead people to perceive larger drop then
actual. • Many Porsche’s were undervalued historically, current values
are closer to market correct • These cars are unique in that they have true global demand and
appeal across all ages • Overall Market will enter into a Plateau phase • True #1 Cars and VERY rare sub-models will still see strong
price growth • Delta between true top tier cars and lower tier cars
will widen • Continued strength of the dollar and weakness of the Euro will
weaken prices for models commonly sold into Europe. • Potential drop in values for sub-par cars and over saturated
segments
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What Does that Mean? • DON’T buy a Porsche as an investment, buy it because
you love it • If you buy wisely you will limit your exposure to wide
swings in values • In a cooling market you can take you time to make a better
purchase and find nicer cars!! • Stop obsessing about values and just enjoy the cars!
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Prices • The first key of setting a price, is knowing
what you have • Take the time to learn enough about the model to know its
relative place in Porsche history, the general pro’s and con’s of the model and its relative desirability
• Understand how to grade a car, where does this specific car fit in relation to others?
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Grade 1 Cars: The “Unicorn” Defined by Hagerty as— • Condition #1 vehicles are the best in the world.
The visual image is of the best car, in the right colors, driving onto the lawn at the finest concours
• Perfectly clean, the car has been groomed down to the tire treads
• Painted and chromed surfaces are mirror-like. Dust and dirt are banned, and materials used are correct and superbly fitted
• The one word description for #1 cars is "concours”
True #1 Cars don’t exist in the wild, they are created through hundreds of hours of work
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Grade 2 Cars Grade 2 as defined by Hagerty— • #2 cars could win a local or regional show. They can be former #1 cars
that have been driven or have aged • Seasoned observers will have to look closely for flaws, but will be able
to find some not seen by the general public • The paint, chrome, glass and interior will all appear as excellent • No excessive smoke will be seen on startup, no unusual noises will
emanate from the engine compartment • The vehicle will drive as a new car of its era would • The one word description for #2 cars is "excellent”
True Grade 2 cars are generally less than 5% of a given population
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Grade 3 Car Defined by Hagerty as— • #3 cars could possess some, but not all of the issues of a #4 car,
but they will be balanced by other factors such as a fresh paint job or a new, correct interior
• #3 cars drive and run well, but might have some incorrect parts • These cars are not used for daily transportation but are ready for a
long tour without excuses, and the casual passerby will not find any visual flaws
• "Good" is the one word description of a #3 car
The vast majority of the PCA member cars fall into this category
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Condition 4 Cars Defined by Hagerty as— • #4 cars are daily drivers, with flaws visible to the naked eye • The chrome might have pitting or scratches, the windshield might be
chipped. Paintwork is imperfect, and perhaps the fender has a minor dent.The interior could have split seams or a cracked dash
• No major parts are missing, but the wheels could differ from the originals, or the interior might not be stock
• A #4 car can also be a deteriorated restoration • "Fair" is the one word that describes a #4 car
The vast majority of the Porsche’s offered for sale in the marketplace are Grade 4 Cars
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Other Factors in Grading • The standards fall gently over time in the #2-4 grades as
cars age. A #2 991 looks different than a #2 1969 911S • A + or – can be given to any grade for a car that falls
in the middle • Cars below 4 are evaluated on the costs to bring up to a
higher grade however all cars have a natural floor they don’t go below
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Original vs. Restored • A truly original car will outperform a restored car ONLY if it
is truly #2 or higher grade example • “Survivor”, “Barn Find” or “Patina” are over used, a car is
only a “Survivor” if it survived WELL! • Restored cars generally still are #2-3 cars, the expense
and difficulty of a #1 restoration makes them very rare
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How to Set or Know a Fair Price • It’s not an exact science • Research comparable models for sale across all platforms • Subtle differences make large value differences even
among the same model • Take the time to study the market long term to learn the
subtle nuances, when in doubt consult an expert (or two!) • Too high is just as bad as too low!
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The Problem with Value Guides • The market is moving faster than the indexes can adjust • Most sales happen without public disclosure • The guides can only hit the averages, they don’t
accommodate for the outliers due to low sample size • Best for average cars • Useful: Hagerty.com, Excellence, NADA Classics
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Factors Affecting Price: Mileage • In general the lower the mileage the higher the value • Late model 1999+ mileage discrepancy is rare • Older models: mileage discrepancy is common—
mechanical odometer failure, 5-digit odometers, 85 mph speedo (79-82)
• Documentation is key • Cars condition should be reflective of mileage • 1973 and older mileage is almost irrelevant as it relates to
market value • Condition trumps mileage
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Factors Affecting Price: Rarity • As a general rule lower production sub-models
command a premium • True mechanically or visibly distinct sub-models
bring higher premiums than simply aesthetic or marketing packages
• Some models were rare due to low desirability initially and often they are now “rare” but not necessarily desirable
• Outliers: Special Wishes, racing history, celebrity ownership, prototypes, etc..
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Factors Affecting Price: History • 1 owner cars always bring a premium • Low ownership is 2nd best • Unbroken chain of Documentation • States of Ownership: West Coast + Dry States
are preferred • Clean title/Clean Carfax (only after 1980) • Salvage title is always a significant hit to value
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Factors Affecting Price: Options • Color is a huge variable. Color preferences have
changed over time • The Color and options can make as much as a 1-2x
difference in price on certain models • In general the more highly and unusually optioned a car the
more desirable. Performance options generally have a higher return on value
• Prior to PDK era Tiptronic and Sportomatic brings lower values
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Factors Affecting Price: Condition • What grade is the vehicle? • Condition of the Body, paint and interior? • Mechanical Condition: PPI • What items need to be remedied to bring the car up to a
given grade? These are not a $ for $ deduct on value • Presence of accessories: Tool kits, air pumps, window
sticker, books, spare keys, etc.
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Factors Affecting Price: Originality • The more original the more valuable and the
easiest to sell • Modifications that are easily reversible with original parts
saved is 2nd best • Improve your sales price and decrease market time by
returning to original if possible • Non-reversible modifications drastically lower values and
desirability (as it relates to a sale, its YOUR car make it the way YOU want it!)
• The lower the grade the lower the difference originality makes
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Factors Affecting Price: Paint • Cars with original paint are always more valuable
unless condition is degraded beyond a tolerable level • The higher the number of painted panels the bigger the
value deduction, always attempt to learn “Why” • A total repaint is judged on the merits of its quality • Most sellers claim original paint however they have no way
of verifying. “Looks Original”
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The Paint Meter • Air-cooled cars were painted by hand, as such the readings
have greater variability • Water-cooled cars were painted robotically, have a much tighter
range of acceptable values • The key is consistency across all surfaces. Air-cooled cars
should read between 3.5–6.5 mils on every panel. Water-cooled between 4–5.5 mils
• If given a high reading look for evidence: tape lines in jams, rough edges on backs of panel, overspray, color match, incorrect texture, etc.
• Factory QC, Port damage, lot damage • Paint meter does not negate need for thorough body inspection
but certainly helps!
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Value vs. Price • Value is what you get in exchange for the price you pay.
Value doesn’t mean less expensive • The more expensive car might be the better “Value” • In general buy the best car you can afford, but be careful
you are getting what you pay for • The best value is the car the best suite your needs, desires
and intended usage. • When in doubt enlist the help of a trusted advisor
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Where to Find a Used Porsche / Where to Sell a Used Porsche • PCA: Network amongst your local club members, the best
cars are usually found this way • “Reputable” Dealers: We didn’t get the bad
reputation for nothing! • Don’t assume a private party is necessarily more
honest (honesty vs. ignorance) • Auction- Proceed with caution…. • Know Your Audience
• Online venues: PCA.org, Autotrader.com, Craigslist, Pelican Parts, Early S Registry, 356 Registry, 6-speed online, Rennlist.com, BringaTrailer.com, eBay
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Payment: Buying or Selling • Everyone is concerned about Fraud • Cash over $10,000 is a no-no • The concern about Cashier’s checks • Wire Transfer • In Person Transfer • Title: Make sure they have it, its in their name and
there is no lienholder • When in doubt visit your local DMV with the buyer or seller • Lien: How to payoff an outstanding loan