What makes these cars so expensive?

Like some of you, I am considering buying a slightly used 996. One of the questions my wife asked was: Why are these cars so expensive? Not expecting this question, I was stumped. But I do believe there is a valid question here. If you take away the mark up created by supply and demand, which aspect of the car is the biggest cost driver for a Porsche? What comes to mind is perhaps the investment required to develop the car, the low production runs, lack of manufacturing automation (?) and the engine & drive train. The rest of the vehicle should be comparable (in cost) to other car makes (e.g., sheet metal forming, interior, assembly, other things outsourced to Bosch, Hella, Bilstein, BBS, Ronal, whatever). What does the collective think? Thanks. Jan

P-O-R-S-C-H-E P-R-O-F-I-T Quality components, engineering, and construction. R & D. Gotta keep all those high quality people happy, too. "Everyone knows the game, but you gotta pay to play..."

My advice is drive it and let your wife drive it. For me, that question was answered after having purchased one and driving it around for a day or so.

total package. You can get cars that are faster and more luxurious for less, but it's brand name and uniqueness. For the same reason you are asking questions here, as opposed to asking why vette is the most desirable sports car. BTW, you can get great deals on some used 996's

Even if your wife drives the car she still may never get it. My wife just does not get it, if I drove a Honda Accord she'd be thrilled. I believe the most expensive thing about Porsche's is the engineering... you just can't beat it.

I agree with every reply here. I have owned Audi, Lexus, VW, Benz, Toyota, and BMW, and I rent several cars on business monthly. NOTHING compares to my 996. Yes it rattles, and squeaks, puffs a bit of smoke on an occassional start-up, stereo sucks, blinker and cruise control stalks look and feel cheap, and on and on and on.... But I knew all about these things way before I signed on the dotted line. Own one and you'll understand. Enjoy.

First off I dont own a Porsche, yet... so take this with a grain of salt I do know that Porsche had the highest profit margins recently of any car manufacturer. I dont know what that means entirely, maybe their engineers are of such high caliber that it costs Porsche a lot to keep them on board. And with the 996 they did lower their cost of manufacturing by automating some processes that were previously done by hand. Porsche did not reflect that savings onto the customer, which left me feeling kind of jaded. Some interior glitches, squeaks and rattles, cheap sound system, RMS problems, dealorship personel issues in my mind should all be immediately solved for the price we are paying for these cars. There is no substitute, should be there is no EXCUSE. I may sound harsh but when I pay upwards of $80k for a car I want the best, period.

I have a related question. Currently own a Midnight Blue 964 Tiptronic, which I like but want a manual transmission. I don't believe in buying new cars as the Porsche depreciation curve is quite concave. So I am considering a manual dark blue '99 996 cabriolet in great condition with 8500 miles. I have negotiated $48k. Does this seem like a good price?

The miles being so low makes it sound excellent. You should ask: Does the owner have the original sticker? (Certainly it cost at least $80K new.) What options does it have? Which are important to you? Ultimately a great deal is no good if it's not the car for you. I love the color, interior, etc., of mine ... but you might not.

ferraris make porshes look cheap!

The theoretical economic perspective is that selling price (what we pay) and the actual cost to build the car are driven by two different sets of factors (I'm not an economist, so bear with me here). Cost to build the car is driven up by small manufacturing volumes (e.g., the cost of a tool to stamp sheet metal only gets spread across a few thousand p-cars instead of hundreds of thousands of Camrys), and high engineering and development costs (I assume that Porsche puts as much or more engineering time into developing a new engine, as compared to, say, Hyundai). Also, I assume that the mechanical parts are built to higher precisions and tolerances than your average car, which therefore costs much more. A lot of assumptions here which may not be quite right, but I think you get the general idea that it can be expensive to build these cars. Price is somewhat based on cost, in that Porsche wouldn't sell the cars if they couldn't at least cover the cost of the car (ok, any economist can jump in here). Beyond that, price is completely based on what the market will bear, and scarcity plays a role here. This is the whole supply/demand equation. Porsche could make many more cars, but then they'd have to lower the price to sell all of them, because they'd run out of people like us willing to pay the high price. End-of-year discounting is a perfect example of how they have to reduce the price to sell the last few. If they made fewer, there would be unsatisfied demand, etc. Another assumption here, but if Porsche is doing this right, they figure out the right number of cars to sell that will maximize their total profit (i.e., sell fewer cars at a higher profit, or sell more cars at a lower profit). Again, I'm not an economist, so if anyone can do a better job, jump in and I'll just go back to driving my car!

dakar34, the car in question does not have the original sticker. Title and paperwork are in order though. I did spend a few hours with it and since it has such low miles, it was hard to find a fault. Small scratches in the paintwork, spot on the rear bumper, vanity mirror flaps not holding up, radio not stock, slight wear on passenger seat, really small things that I can live with. Non-wear-related 'faults' are 17" 5-spoke twist cup alloys (I'd prefer 18"), no hardtop, plastic rear window. Panels are fine, engine clean, as is oil. I would say that the car fits. It's the same Midnight Blue metallic color as my 964, which I like, and is a convertible, which is also good, and is a 6 speed. Options are sport seats and not much else as I could tell. It was in really good condition. I just wanted to know if you all thought $48k was a fair price. ignacio, yes, i considered Ferraris briefly, but for the $$$ I am willing to put in, I would get something from my 964 era that I sort of want to upgrade. Also like the rear seats in 911 for the space.

What a good question FlashingBlade! And one that a Porsche owner will find so hard to answer truthfully. Because the answer really has to be that nothing justifies the price of a 996!! I know this may be an unpopular statement, but I do have some arguments to back it up with: - As mentioned in some of these posts, Porsche is the most profitable car manufacturer around. That has to mean the best margins around, i.e. the difference between how much the car costs to build and its retail price is greater at Porsche than at other car makers. That, in my view, makes the other makes better value for money. - It's also worth noting that the more you go up the 996 range, the more the models are profitable for Porsche. Before the GT2 was released, I read a Porsche exec comment that the 996 TT was their most profitable car. That tells me that Porsche understand the need for their customers to be reassured about the quality and performance of their cars by paying a high price for them. It's like choosing between two bottles of wine on cost basis alone. Even though both wines might taste the same, the more expensive one might be perceived to be better. - There are several high performance cars that are considered by experts such as motoring journos as being just as good (if not better) than a Porsche. BMW's M3 and M5 obviously springs to mind here. If they're just as good, they must have needed just as much R&D to be developped... Yet these cars are cheaper to buy. In the end of course, it's all a question of image. True the 911 has always been an exceptionnal sports car. But we're not just paying for the quality and the performance, we're also paying for the Porsche name. Not only is such an expense high, but it can't be justified through logic. If it could, we would all be driving M3s. But in reality, how many of us would give up their 911s for anything?

These cars are so expensive because we're all willing to pay this much. After owning two Porsches, I think their superiority to everything else on the road more than justifies the price. My car wasn't cheap, but it can take curves at supersonic speeds, pull away from most anything on the highway, look good, and still take me to the ski mountain or carry 2 people and golf bags Can't beat that!

Let me weigh in here with an experience-based opinion that may be unpopular. First of all, I am a Porsche guy, having owned four in the last 6 years - a 356, a 930, a 911, and now a 996. I also have owned an 00 M5 for the last 3.5 years. While it might not be fair to compare the 996 and the M5 along many dimensions, such as creature comfort and build solidness, as they are intended for two different purposes and audiences, I will say that having owned and driven both, I really think that my M5 will out accelerate and out brake my 996. The former is not too surprising, given the big torque and horsepower difference, but I was suprised by the 996 brakes, which I would describe as excellent but not fantastic. Handling, the 996 wins hands down. Weight and the low center of gravity are the 996's strong point here. The P'car is a ton of fun when pushed to it's easy to correct understeer, but when exiting under full power I never see the traction control light come on, because I think there is just not enough power. The TC light comes on a lot when powersliding the M5 out of a corner. A year ago I was thinking about trading the M5 in for a 996TT at the local BMW/Porsche dealer. The service manager took me aside and said I would be disappointed if I did. The deal fell thru for other reasons, but his words stuck with me. All that said, I really like my 996, and it is infinitely more useful than my 930. The 996 is the only sports car I would consider owning - I don't like the X4s, the MBs are too luxurious, I don't care for Japanese cars. And I can take all 3 of my daughters to school in the Porsche, which they dearly love. It is a great car. I do have a GT-3 on order for May/June. However, if it's performance does not make my M5 look like a sissy car, I most likely will pass on it when it gets here, and save $110k. So, flashingblade, given that a basic 00 M5 was about the same price as a well-equipped 00 996, you might to consider looking at a good used M3 or M5 if you are faced with the all-too-familiar value-for-money resistance from SWMBO. Lot's of performance, more comfort stuff, more space. Steve 99 996 64 356C 76 930 (fs) 00 M5 98 E320

Let's just say there's a reason that Porsche is the world's most profitable car company (the price does not correlate with the cost to produce). More than anything else, it costs alot because people will (and have) pay it...

FlashingBlade, This weekend, if the weather is nice, head on over to your local porsche dealer and have your wife test drive a 996.... When I got my car, my fiancee was very apatheic, would have even preferred that I got a more economical car. She saw it as simply a way to get from here to there. Then one day she needed to drive somewhere for work. I got a call that evening from her saying, wow, that car is fast. I thought she was kidding, but she went on to say how much she loved driving it, power, handling, bla bla. Now she wants to go Skip Barber, and then do some DE events with me. If she still doesn't get it, ask her why her Prada bags, Manolo shoes, name brand whatever clothes are so expensive when they cost so little to make. At least with a Porsche you can say that the engineering, R&D and precision crafting contribute to the cost...

I have to disagree. I just moved over to the 996 from an E46 M3 after owning it for a short while. Mind you my choice was always between an M3 and an 996. In my part of the U.S. I was able to find minimal time behind the wheel of the M3 prior to purchase. Don't get me wrong the M3 is an awesome car, and like many cars may be faster 0 - 60, but the Porsche is more about the whole package. After I had the M3 for a short while I went back and drove a 996 911 and there just wasn't any comparison. The Porsche is the whole deal with every element finely balanced towards nothing but driving pleasure. Sorry to sound sappy, but all the things I was thinking about improving on the M3 are near perfect on the Porsche. I love the gearbox, the seats, the sound of the engine and exhaust, the low center of gravity, and I could go on and on. I get more of that feeling of a fine fitting glove, than just riding in a car.

M5 braking is not better. It's much worse actually, especially over the long run such as tracking it. M5's are much more prone to needing brake work after equal periods of heavy use. It's slower around a track by a considerable margin. If you're using it for freeway driving, I'd definitely consider an M5 for its power and torque, but if you're ever planning on having any track driving or even very spirited twisty roads, the 996 wins hands down.

I was also charged with this same question - my answer is simply this: Porsche has a reputation of being one of the best sport cars of all times, not many sports cars in this class can be used for daily commuting. The style and handling is perfection, to turn on the ignition is worth the price of admission alone. Wives can complain all they want about the dollar, but they have to be truthful to them selves, this is one beautiful car and Dam, doesn't my husband look great in it...

Gnome is quite correct.

Look at the huge following of Porschephiles of all makes-it's got heritage to boot and damn street/track friendly and looks like a sportcar all in one box : ). Porsches are truly awesome machines!!!! Mike

Nowadays, its the expense of running them not buying them.

There's a saying...that people justify their purchases with logic, but buy on emotion. How much that is worth is up to you to decide. The title of this thread used the word "expensive". But I view it from the pre-owned side... Why is this low mileage high performance car so reasonably priced ($50K for a 2 year old that blows the doors off everything else)?

Thanks for all your well formulated responses. It's obvious that this is a much better informed group of people then what you'll find on some other groups. I have been shopping for cars for a couple of months now and driven all the usual "sporty" suspects (TT, TT32, G35 C, S4, M3, S2000, etc). Though these are all very nice cars, NONE gave me the big grin that I was looking for. The 996 did. Search over. My wife did drive the Porsche (doing 35 in 5th :-| ), understands why it would appeal to me, but it's just not her cup of tea. She likes the M3, which admittedly has a better interior, roomier, and quite a performer as well. So her question emanated from her comparison of the M3 to the 996. Both the M3 and 996 are premium cars, both requiring innovative engineering, and demand higher prices. The M3 however shares components with the 3 series, offsetting some of the costs with a mass production car. My dad (an economist by training) says I got it all wrong. He considers Porsche a research firm that generates intellectual property (patents) and makes a few cars on the side to demonstrate the technology. He claims that their income on patents is higher than that from cars. I don't have anything to back this up, his information may be a bit out dated. Anyone have those facts handy? Anyway, thanks for the response. Jan

This statement is true, however, it's not enough to keep them going indefinitely if they don't sell profitable cars. There is also an intangible feeling with these cars. I've just bought my second one and they have a soul... it's hard to explain but once they get in your blood you're hooked. No other car has ever given me that feeling...

Why is a Patek Philipe watch 20,000+ (some models) and a 21 jewel automatic seiko watch is 250.00 when the seiko keeps time 99.9% as well as the Patek? Well I think you can answer that for yourself...

I've driven Porsches for 30+ years and also many Audis, BMWs, anything German. Nothing compares to a 911 but I'm preaching to the choir am I not? By the way, UBER, I traded a SMG M3 in on a MY2004 GT3 and WOW! If you've got a confirmed build date and love to drive, don't pass up the GT3- and you'll have a rare car indeed- they'll never get to the original 750 they intended to import to the USA. The GT3 is a true 911- no luxury cruiser

01-996: Your analogy to watches is mostly accurate, except the Seiko (or any Quartz watch) keeps far better time than the Patek mechanical movement...

I know this is an aging thread, but I thought I'd comment. I got some spirited driving behind the wheel of an 02 C2. I've been torn b/t an E46 M3 and a used C2 for a while, and have been reading all I can, and driving all I can. Your comments about riding in a car vs. a fine fitting glove are spot on. My perspective comes from a track junky, albeit of late with fewer track days with a growing family. I have a particular sensitivity to this issue, and picked up on it my second drive in a Porsche. Made my track modified E36 seem rather bland.

Just for the record, I have an 00 M5 and a 99 996. I like them both a great deal; different tools for different situations. Steve

I�m still pretty new to Porsche ownership but I think that there are several factors to be considered: Like other people I would suggest that your better half take a drive in one. We have a minivan and the C4S and my wife used the C4S for a whole day during the week. At the end of the day she took the Sienna out and could not believe how loose and ungainly it felt after only one day in the Porker. She has commented on it several time since then too. Build cost: While I have heard that Porsche is the most profitable car manufacturer providing a comparison between build costs of a 996 and an M3/M5 is not really fair since the majority of the components in an M3/M5 are the same as the rest of the line. Since a lot of 3 and 5 series cars are sold they can reduce the cost of manufacture substantially. Top class all around car: As someone on another thread said the Porsche is one of the few cars that you can storm around a track in the morning and then drive to a black-tie dinner in the evening without changing anything. Look in the latest copy of EVO magazine where they compared a 911 to a host of other machines � some bargain rockets like the Mit. Evo and some exotics. The 911 comes out top or near top in EVERY category and is still a luxury car that can carry your golf clubs or young children and does not need you to contort yourself to get it. Problems?: I have heard a lot of talk about the RMS issue but it almost always seems to be from the same few people so my guess is that it is a real problem but not as bad as some people would have you believe. On the other hand I only know two people that have owned M3s and both of them had to have the engines replaced while the cars still had very low miles. Passion and heritage: The M3 or M5 may be in the same performance league and offer creature comforts so if that is all you want then you should go no further. For me, the sight of a 911 has stirred my soul since I was around 8 years old and I still get the same feeling today. Every time I see the classic lines of a 911 coupe I get a little thrill � even more so now that the one that I see most often is mine! In fact that is one reason why I bought the coupe instead of the cab. � the coupe spoke to my heart and the cab. spoke to my head. The heart won! I have bought vehicles in the past (mostly motorcycles) that I convinced myself were good value for money. In every case I ended up keeping the vehicle a very short amount of time and then going and buying what really spoke to me. As the saying goes �You will only pass this way once. Do it right�. Barry

NOTHING compares to my 996. Yes it rattles, and squeaks, puffs a bit of smoke on an occassional start-up, stereo sucks, blinker and cruise control stalks look and feel cheap, and on and on and on I think a good point is being made here. What is it that really impresses you about a car. What do you value? Is it performance, prestige, appearance, quality, etc. Personally I wouldn't pay top dollar for a car that squeaks, rattles, puffs smoke on occassions, and has some cheap interior components and stereo.But that's me and I completely understand the point of view of an enthusiast who looks at other factors when buying a car and is willing to overlook some shortcomings. The happy car owner is one who truly understands what he wants from a car and finds the car that best meets his values. Based on the posts I have read here for the past several weeks, almost all of Porsche owners have made that assessment and found a car that they love, warts and all.

My last car was a Toyota MR2 Spyder. It was a great car, handled very well, communicated with the driver at all times and I could push the limits of it and know what it was going to do. Ultimately though it needed to be worked hard to get it to perform well and felt very 'tinny'. The C4S, by comparison, feels like a luxery car in every way AND has performance and handling limits that I still haven't quite had the ***** to explore yet (only 2 weeks). Each time I push a little harder it just goes a little faster! So far no rattles, squeeks, or any other sort of complaints and the car has 15,000 miles on it.

Houldsworth: I had an new M3 grenade as did a coworker. We got numbers 2 and 3 from a nearby dealer about 150 miles away when the first came out. Another guy at work was in the middle of a lemmon suit with BMW of North America last month over his new 745 and when he was on his way to a motion in that case the engine blew in his 745. The lemmon suit was over other problems with that car. BMW settled the suit that week and gave him a new 745, but apparently the new 745s are having a few engine replacements/issues. No car maker is immune to the problems when you build these things to perform as they do or push the envelope as they do technology wise. Twin Turbos emit a puff a smoke quiet often on start up and a flat 6 by deisgn may be more prone to doing this. May not mean anything is wrong though. Talk about expense, I just had $ 4,200 worth of warranty work done on my Twin Turbo trying to get a spoiler light to stay off. Funny thing was the spoiler worked fine, but the light kept coming on.

When my 99 hit about 60K, I had to replace the mufflers. I fully expected to be dealing with rusted bolts and exhaust pipes. I figured on top of that the tight spaces that they've crammed the mufflers and pipes into would make the job hell. But it was a piece of cake! All the materials they use and the way it has been thought through is amazing! From interior body trim work to engine removal, this car is a joy to work on. Get under these cars and do any type of maintenance and you pretty quickly start to justify some of the premium these cars demand.

They are expensive, but on the other hand I have never had this much fun with a car in my life, plus I've planned the car since the 6th grade so WTF.

I agree 100 percent. Porsches are so much fun I don't really care how much it costs at this point in my life. I work hard and sometimes when I get in my 911 at the end of the of ****ty day, I feel that the hard work and constant stress may be worth it.

Ok...Buy a Range Rover, I did...$76K sticker...It runs great, engineered wonderfully, but My steering column squeeks when I start it, just a simple lube thing, but on a $80K car? Mercedes, same types of issues, my business manager had a S500 AMG, it was in the shop 2 weeks out of the month. $130K sticker. Cars are made and designed by humans, they are not perfect. A Lexus has issues, just as a Honda, just as a Nissan. They are just not the same issues as a Porsche. My new (to me) '99 C4 Cab is going back Monday because, I think the steering wheel vibrates too much for my taste at around 80 mph...In a Honda, I wouldn't think twice. I expect more, so I have to deal with the little things more. That being said, Porsche's are the BEST sports cars made. They are reliable, driveable daily, and perform on a level of their own. I had a Boxster and I was always wondering why a 7 year old car was the benchmark of the 2 seater roadster class, and even to this day, no one makes a better roadster for the money. Z4's, S2000's, all are compared to the Boxster. Carrera's are the performance benchmark of all sports cars and have been since the 70's. No car with this much technology is perfect, no matter how much you pay for it. Try a Bentley or Maybach, I am sure those owners are saying, "at $250,000 I expect it to be the best, period.".

Sorry to spoil the party but maybe you guys should take a look at the thread about RMS failures started by Dough before deciding on the cost of ownership

Expensive? I don't know that the 996/986 is expensive. Look at the Enzo or most Ferraris, the Lamborghinis, the Vanquish....... I mean, there's a whole slew of cars out there that are multiple times more expensive than my C4S. Now, those cars beg to be asked, Why so expensive? I'll bet one or more of them squeek and groan, leak, and break down. I'm also willing to bet some of them break down more than my lowly 996 when I do t them what I do to my 996. Perfection? That's only for when you're dead. In the meantime, have a hell of a good time while you're alive. Somebody phhhleazzzzz give me a GT3 that someone doesn't like 'cuz it squeeks, groans, is too stiff, tramlines, or what-not. I'll suffer through it.

Expensive is a relative term. $110,000 for my car IS expensive for a car. But to Palting's point it's not expensive compared to other exotics. And don't even get me started on how often Ferrari's breakdown. My friends F-car has 9,000 miles on it and it's had about $10,000 worth of work. My C4S cab has 11,000 miles on it and it's just had an oil change.

Expensive? I don't know that the 996/986 is expensive. Look at the Enzo or most Ferraris, the Lamborghinis, the Vanquish....... Obviously it depends upon your frame of reference, but I don't think you can logically say that Porsches aren't expensive to maintain because Ferraris, etc are a lot more expensive. That would be like saying that $10K a year in real estate taxes isn't so bad because somebody else is paying $30K a year. I have four friends who own Porsches. Two of them own 993s and they do virtually 100% of their own maintenance. The other two own 996s and they take their cars to the Dealer for service. These guys have good jobs making over a $100K a year, but at least in their minds they can't afford to have their cars routinely maintained by the Porsche Dealer Service team. So I suppose if you make around $250K+ a year, maintaining a Porsche is no big deal. For those of us in the little over $100K territory, Porsche maintenance expenses can de daunting, especially if something major arrises.

It was a strectch to buy the car, and I have to swallow hard everytime I see the service bill. Then I think of what it could have been if it was a Ferrari, the anxiety and the hesitation of doing anything fun for fear of breaking the car, the knowledge of how much even routine maintenance costs. And then I drive the Porsche home from work, pack up and drive off for a weekend DE, and wonder at what a bargain a Porsche really is. The original statement was made to emphasize the relative nature of the question on this thread. It's a lot of money for a car, but the Porsche is also a lot of car for the money, IMHO. When statements like Porsche is the most profitable car company are made, don't forget that Porsche almost went under from losses in the not so distant past. They survived and are now profitable not by making their cars more expensive, but by developing an excellent little roadster that everyone loved and that just happened to be the cheapest of the Porsche line, the Boxster.

They survived and are now profitable not by making their cars more expensive, but by developing an excellent little roadster that everyone loved and that just happened to be the cheapest of the Porsche line, the Boxster. There's no question that Porsche sells more Boxsters than any other model, but I believe that the 911 is their most profitable model by far. I don't believe that Boxsters are selling anywhere near as well as they did initially, because Boxster owners have come to find that maintaining them is very expensive. Hence, used car lots have been flooded with Boxsters and I've seen '99 Boxsters advertised in the upper $20s.

I personally believe that if you buy a Porsche 911, or any car for that matter, you need to make sure you can afford the maintenance. If you buy the car and can't afford to replace the tires then you are spending out of your league. This would be true for any car, but the more exotic the car the more the ancillary expenses are going to be. Porsche's, like any high performance vehicle, do require a certain level of maintenance that a Toyota does not..

Any stats to support that contention? Or is it just a general feeling? I must see 10-20 Boxsters on the road for every 996. Do you know the profit margin for either vehicle, and the number of each vehicle sold over the last several years? I'm genuinely curious to know the numbers.

Hahaha, some people amaze me. Why do people who have never had a Porsche, probably never driven a Porsche, and openly said they don't want to buy one or cannot afford one at this time keep on and on about why they don't want to buy one or how bad they are. It is interesting that some people just throw statements out as gospel("there's no question that") even if they have no absolutely no information or real data to back it up. According to Christophorus magazine Porsche sold 66,803 vehicles last year world wide broken down as follows: Cayenne 20,603 (8 months sales figures due to release date) 911 models 27,789 Boxters 18,411 As far as profit margin, I doubt you know what the profit margin is if you don't even know the sales numbers which are readily available to the public. The internet is such a great outlet for a personality disorder. Our new friend with the gratutious predicton that all 996 engines are doomed to grenade even felt compelled to send me a PM that simply contained the word "Hello." That's logical. Sounds like someone forgot to take their medication.

Having had a broad array of performance/luxury cars which I've driven a lot of miles, I find Porsches to be more expensive to maintain than Lexus, about equal to MB and less expensive than BMW, once they all come off warranty. For the first years, Porsche upkeep is negligible as the high routine oil change cost is not significant in comparison to depreciation and operating costs of all expensive cars. Corvette was by far the least expensive. I have kept my cars a long time, and in my experience, the lower depreciation has offset the higher operating costs. Not sure if that will be true for my 02ttX50, but it seems to be true for my 99 Boxster. My 99 LX470 has depreciated a far greater dollar amount and per centage than the Porsche. AS

It is interesting that some people just throw statements out as gospel("there's no question that") even if they have no absolutely no information or real data to back it up. According to Christophorus magazine porsche sold 66,803 vehicles last year world wide broken down as follows: Cayenne 20,603 (8 months sales figures due to release date) 911 models 27,789 Boxters 18,411 Take my post in context. My post was in response to a poster who gave credit to the Boxster as the savior of Porsche. Sure, everyone knows that Boxster sales have fallen substantially, but they were a hot seller for Porsche when they were first introduced. As far as the 911 being Porsche's most profitable model, I read that statement in Business Week. If you chose to not believe that statement, no problem. The fact that Porsche is offering a $10K discount on the 40th Anniversary 911 provides some evidence that they have a lot of margin to play with. By the way I also read in the same Business Week article that Porsche was the most profitable automobile manufacturer in the world, and that BMW was in second place.

With regard to profit margin, according to Forbes: On the 911 Turbo, the company makes an average gross margin of 45%, according to Merrill Lynch. On the lower-end Boxster S convertible, Porsche pulls in a still-rich 23%. It doesn't cost THAT much more to build a Turbo than a Boxster, and the profits are substantial on both. Why are these cars so expensive? Because that's what people will pay.

You know...as a relative newcomer to Rennlist and the world of Porsches I am amazed at how many posts that start out seeking information or just plain old fun turn into finger-pointing, he-said/she-said, I'm right/your wrong things. What's up with that As the saying goes...Why can't we all just get along? I guess the answer has to do with Porsche owners probably bring over represented by type-A personalities. Anyway, who cares? Cut the quarreling and, as my Mother was often heard to say, if you can't say anything nice then don't say anything at all

Yep, supply and demand. TT Coupes have basically been sold out or nearly impossible to get since late March. In March, a buddy of mine tried to buy a new TT Coupe and our dealer could only find 5 in the country that were either not sold, had a deposit on or specially ordered. Out of those 5, the dealer could only get1 of those 5 by trading a TT cabriolet allocation, but the color scheme was horrible in that TT coupe. I bet Porsche makes an absolute killing on options. Option prices can be crazy (for example a little footwell light like $ 600 and X50 $ 15k/17k or so) and I would venture to say that a lot of the TTs sold are very highly optioned. My TT cost over $ 140 and I don't have X50. I would think Porsche has to be careful with pricing the Boxter S as there is some pretty steep competition with the TT, BMWs and what not. The Turbo might not be so price sensitive. Some people just got have a Turbo and they will pay absolute crazy prices for custom ordered/spec'd Turbos. You add X50, full carbon everything, navigation, Aero, sport seats and etc. and you are bumping into $ 150 to $ 160k range or $ 40k in options quickly. I may be wrong, but I would think that alot of people would opt for a 996 cabriolet before specing out a Boxter S with enough options to take it into 996 price range so the profit margin could be skewed by level of options if that 45 % number deals with Turbo as delivered as opposed to base price profit margins. Just an observation and I may be wrong, but I agree that Porsche has more flexibility in pricing the 996s and especially the Turbos because people in that market may not be as price sensitive or the 996 does not have the nose to nose competition that the Boxter has in its price range.

A Porsche isnt for everyone. Its as simple as that. You get in other cars and drive. In a Porsche, it feels like the car attaches to you. Becomes part of you and reacts with you. For people who are sensitive to that feeling, a Porsche is a bargain IMO. What else offers that? Nothing! Some people are dead to their surroundings. For them, a Geo is good enough i guess. I honestly wonder. When a friend got excited about a Hyundai purchase, what could they possibly be excited about? Does their pulse increase the same in that car as mine in a Porsche? I know mine doesnt!

I'm in the Premium Products sector and you want to build products that people aspire to own. Porsche like other premium sector companies builds products that people don't necessarily need but want or desire. The emotion or pride of ownership is something many people (like us) are willing to pay for because we appreciate what it means to us as individuals. Porsche stirs the soul, or at least that's what their advertising wants you to feel. These are things that as Mastercard says "are priceless" The greatest thing about the Porsche is that it delights most of it's customers and we are willing to accept little quirks. To that guy that said if he spends 80k on a car it should be perfect, I say forget it, nothing is perfect, especially a car and believe me I have owned so many I lost count. But the last 2 have been Porsche.

dekard, I don't understand how you could say..... "And with the 996 they did lower their cost of manufacturing by automating some processes that were previously done by hand. Porsche did not reflect that savings onto the customer, which left me feeling kind of jaded." ......when 911s haven't gone up in price in twenty years. In the 80's 911s started in the 60k range which is where they still are today. Minivans back then were 12k and are now as high as 36k, but you think Porsche should have lowered the price on 911s?

01 C4 Cab NYC, The thing I�d ask my wife, if I was married, is what is the resale value of those prada bags? I could take my C4S back five years later and get a new Boxster or Cayenne from the dealership. I'm planning for our future by buying a Porsche. lol

Sounds like me. I was explaining to my wife that compared to my previous car which only had two seats and zero luggage capacity the 911 is a 'family car'!

I am the new owner of a '99 996 and faced that question too. At the time of my recent purchase I was the proud owner of a 01 BMW 325xi which i was perfectly content with. The question came for me to trade my 325xi for the 996 and as you can see I chose em both. Why? Cause the 325xi does things that the 996 doesn't like allow me to go grocery shopping or just go out with the family (wife and a 3 and 5 y/o) in comfort which the 996 doesn't necessarily do too well. So I think I purchased my 996 cause it was the ultimate car that I've always wanted and did most of the things I needed it to and wanted it to....and does them VERY VERY well and to a standard that I can say I don't see in Japanese and 9/10 American vehicles.

jan take your wife to see a ferrari! after that the porsche will seem like a bargain!! even the 996 tt

Imagine if Porsche sold the 996 for the price of a Boxster 2.7��. Yah, no more preferential treatment and no more standing out in the crowd either. I would prefer it if they kept the prices right where they�re at. I wouldn�t want to see the neighborhood teenagers driving the same car that I have. . . . BTW: I�m the same person that also doesn�t mind the gasoline inflation: �Keeps more cars off the road� = �More room for me!��.. -Eli

A lot of interesting discussion in this thread. All expensive cars are subject to the law of diminishing returns. Does twice as much cash outlay by a car twice as fast? In every quantifiable measurement of a car (performance figures, economy, interior size etc.) it can be seen that paying more does not result in a proportional improvement. But I think the many happy Porsche owners know that the value of these cars is much more of a qualitative judgement. Right now I own a Subaru WRX, which I've modded up and quite enjoy. This car does have some pretty impressive performance. Heck, acceleration is not far off an early '80s turbo. But I am a believer in Porsche and when the time is right, I will find one too. Can I present a convincing logical argument why a 2+2 sports car is worth the money to my wife? No. Do I know that it is (to me)? Yes. If you question the sense/value of these cars at all, then the best advice to get something else. If you want one of these cars, you just know it! Thanks! Allan

Why? WHY!?!? Good God man, if you can't answer that buy something else. BTW the answer needs to be no more complicated than "They're cool..." In other words, what you like is what you like. It needs no other justification.

Everyone has a theory and most people have some validity to their points. My friend inside the auto industry shared that: 1. Porsche's profit needs to be so high because they have such low sales volume and they use the profits to support all of their R&D. Porsche, and indeed most auto companies are already planning on the next generation vehicle at the time of the release of the current generation. An engine program alone can cost upwards of a couple hundred million dollars! 2. Cayenne S models cost Porsche around $25K in parts & labor. The rest is dedicated to future R&D, marketing, warranty support, and shareholder profits.

Trojan Man, Did you really need to slap that Dubya sticker in your sig?!

pete perhaps the bush sticker explains in part why trojan man has provided us with the best discussion of this topic to date.

No surprise that the question comes from Kerry's homeland, eh And since you asked, the answer is yes I feel the need to support MY President who has helped make our country the safest it has been in many years and who has instituted economic policies that have helped ease our country out of a recession that started in the Clinton era (remember the dot com bust at the tail end of Clinton's term)? I know that I should already be warned for going off topic so before I really get in trouble I'll stop and say that if you want to continue this subject, let's do it in the 'Off Topic' area. No hard feelings.

Right on!!!! "I always said that I would not stand at attention if Clinton ever passed though my duty station when I was a service member (1993-2001)"....... -Eli

......when 911s haven't gone up in price in twenty years. In the 80's 911s started in the 60k range which is where they still are today. Minivans back then were 12k and are now as high as 36k, but you think Porsche should have lowered the price on 911s? Sorry, but perhaps these quotes could use some historical reflective clarification. Porsche prices have significantly escalated at certain times when market conditions changed, Oil Crisis erupted, Currency hedges were ineffective, Cash on Hand declined, Debt Load (vs none) reconsidered, etc: After buying and owning Porsches and other makes for over 42 years here some of the comparisons (Note these are actual prices paid): 1963 VW Beetle $1250 1962 Porsche Super 90 $4200 (US Models-Euro Delivery) 1969 Corvette $4500 1970 911T Coupe $8200 1974 Datsun 260Z $3500 1972 Porsche 911T Targa $12,400 1975 Porsche 911S Silver Anniversary Coupe $12500 1978 marked the biggest era where Porsche prices climbed considerably. Dr. Ernst Furhrmann was sure that the 911 was at the end of its useful life and the future direction lay in V8 based touring machines like the 928. Note that none of the cars prior had any of the outrageously priced options of todays 911. In 1975 for example, no radio, no power windows, no Cruise, AC optional. The last pure driver's car of the era sold in any volume was the 1972 911S. After an tumultous era of internal wrangling, removal of family members from executive leadership, and other "bloodletting", American Peter Schutz formerly of Cummins took over the reins. They decided to see if the 911's life could be extended, not primarily by performance enhancements (although the 2.7 had problems) but by ADDING LUXURY FEATURES like AC, Power Windows, Cruise, Cosmetic Special Editions, etc. The 911SC gave new life to the 911 (and introduced the GOLD CHAIN crowd to the marque-a business strategy later employed by Harley Davidson!) at a significant price increase. 1978-1983 911SC ($19500-$24000) and it just continued on: 1988 911 Coupe $44,500 (not $60K yet) Porsche was entering a new crisis period only amplified by the cool reception of the 964 series. 1997 911 Coupe $58,500 Porsche's own financial reports and business reports indicate that sales of the Boxster are down over 44 percent, and the 911 down 26 percent with the overall good news clearly attributable to the ....CAYENNE! Looking at Porsches manufacturing, engineering, and other services companies, it should not take any Sloan School graduate or business MBA from Walliby State U. to conclude that the Boxster is a significant cash drain at these levels and the 911 barely at the breakeven point at best. With the volatility of the SUV market, we can only hope that they're burning the midnight oil to keep the hope of offering any relative "pure driving passion" 911 based car like the GT3 available in the future...at any price. Perry 59 Convertible D Replica 96 911 C2 Cabrio (+ Other Assorted Appliances)

Perry, I really enjoy reading your discussion. You make some great points. Some of the relative values are interesting to look at, such as the '72 911T being three and a half times more expensive than the '74 Datsun 260 Z. Certainly Porsche prices have escalated considerably, but so have those of many cars. But yes, the late '70's to mid '80's saw a significant change in the level of "luxury" equipment and it has continued to increase today. Many of us purists long for the simple pure driving cars but alas, us purists only make up a small portion of the total Porsche market. ALL cars are significantly more extensively equipped than in past times and in fairness to Porsche, I wonder if they really have any choice in that regard. I remember when AC was a luxurious option (our family cars never had it). Now, you can't really buy a car without it. Although the Boxter and 911 sales numbers are down, it is partially to be expected as the new models are arriving over the next year and a bit. MBA references aside, I question whether Porsche is actually losing money on these two cars. The Cayenne is certainly the key here. As long as Porsche keeps its overall production capacity up, I think all models are making money. The 996 and Boxter are mature platforms, so the development cost is mostly in the past. The main cost issues would perhaps be somewhat increased supplier costs due to the smaller individual quantities of unique parts. Thanks! Allan

Looking at Porsches manufacturing, engineering, and other services companies, it should not take any Sloan School graduate or business MBA from Walliby State U. to conclude that the Boxster is a significant cash drain at these levels and the 911 barely at the breakeven point at best. Perry: I enjoyed reading your Porsche price history. The car business is a really tough one in which to make a buck, but I've read that Porsche is the most profitable car manufacturer and BMW is second. So if Porsche leads the pack in profits with all of their problems, I can't imagine how bad it is for the other companies. By the way I just read that GM's and Ford's June sales were down significantly when compared to June of last year. It looks like more rebates are around the corner.

perry's historical post is superb! in comparative terms to the vw beettle and nissan z car, today's 911 porsche is UNDERvalued. vw beetles are now about $22-25k. 996's are seldom $85-100k cars--especially if you avoid the silly geegaws in the option catalogue. options are a different story--they are priced absurdly--fortunately they are optional.

Porsche's profitability or wide swings up and down in response to market and world conditions are a characteristic of the automobile business whether it be in manufacturing, wholesale, or retail sector. Some like Mercedes-Benz (and to a lesser extent BMW) have had a large worldwide base and varied product line to rely on with sales volume swings that occur. Remember that Porsche has attempted, almost exclusively in the last decade, to broaden it's base to mitigate manufacturing sales swings. To attempt to understand profitability, you have to look at each business unit separately and their contribution to the overall bottom line. In addition, Porsche historically has tried to avoid or minimize any long term debt load using cash on hand from short term liquid instruments to expand any area. Porsche's R&D arm, including testing at Weissach is used by many other manufacturers, including Companies like Harley Davidson, as well as some direct competitors. They created a business services unit in the same period after they tried to learn and apply manufacturing aspects like "Just in Time" from Toyota and then offered similar services to other manufacturers. They have relatively quietly expanded their retail arm by establishing company owned Porsche Centers as almost a reversal back to the Distributor setup of the 1950's and 60's in several, primarily European, countries. When the large sales growth spurts fueled by the 914 and 944 eras declined they were amazed how fast their cash on hand and no long term debt position eroded all resulting in rethinking the business strategy of what was largely a family dynasty. The 911 is an expensive car to manufacture and if you have never had the opportunity, you should visit the Werks at Stuttgart. The body shape, dashboard layout, and other things we all insist that make a Porsche "different and uniquely desirable" present significant constraints in design, materials purchase, and manufacture. As a humorus aside, we were on a PCA Sponsored Treffen to Germany in 1981. A young couple from Houston (when seemingly everyone in Texas had oil money) who were traveling with PCA family members got imbued with the Porsche Passion and had funds wired so they could buy their own new 911 during the trip. As we were walking on the factory floor in the Body Works area, the young man excitely exclaimed how industrious German Craftsman, unlike "Detroit Beerguts & Machines", were carefully welding and filling the body shells moving slowly on hand pushed carts. Since it reminded me of the "Elves in the Black Forest" notion of German Productivity of 20 years earlier, I burst his bubble when I pointed out to him that none of the workers on that section of the factory were speaking German. In fact, the only German was the production supervisor wearing a smock...all the others were so-called "Guest Workers", mainly from Turkey and other Middle Eastern Companies. A relatively early (for Porsche) attempt to control manufacturing costs and also because the booming German economy was then starting to look down on so-called "Dirty Hands"work. Even in Porsche..., it's sometimes useful to perpetuate the myth... Perry 42 Years of Porsche Ownership & 1 only purchased new 1986 MB 190E-16 that I will never part with (plus many other fondly and not so great departed Automotive Appliances)

So when I bought my first car in high school, a new 944 and the sticker price was $36,500 (I still have the sticker), you're telling me that for another $8,000 I could have got a 911? Ha! I think that $44,500 is less than the price of a 944 turbo was at the time. If the base price of 911s was in $44,500 then I guess that all of the 911s available came with significant options as every 911 at the dealerships I visited (three or four) before I bought my car was in the $60 k range. I'm not a fool, I would have bought a 911 instead of a 944 if the prices were as close as you think they were. But even in your world, and accepting your number of $44,500, my point still stands that for Dekard to expect Porsche to drop prices on the 911 when many other cars have doubled and trippled in price and 911s, according to Perry's numbers, only went up by 33% is still ridiculous.

The amount of thrill

The 1989 C4 stickered around $ 65,000, but the 1988 seemingly stickered around $ 47,000 for a pretty basic car. By 1991, the Turbo was $ 99,500 which meant low $ 100,000 out the door with just a few options.

Posted by Fishman: "...So when I bought my first car in high school, a new 944 and the sticker price was $36,500 (I still have the sticker), you're telling me that for another $8,000 I could have got a 911? Ha! I think that $44,500 is less than the price of a 944 turbo was at the time. ..." Yes, Fishman, as I clearly indicated, those were the prices PAID, not MSRP. Having grown up in the auto business (but not in that business during those purchase periods), rarely does anyone pay MSRP (in fact, there wasn't even a MSRP Maroney Sticker when I originally started selling cars!). On that particular vehicle, purchased in Iowa, I got about $6500 off the MSRP at the time. Sorry you paid so much for a 944 while still in High School. Perhaps education and business experience in later years resulted in more reasonable purchase prices. I bought one well-equipped 944 new in 1984 at a reasonable discount for under $30K (Not a Turbo). A few months earlier at the factory in Germany, they offered me a US Spec 1983 928 that was used for in-house technician training (not driven, but components taken apart and reassembled, etc) for $33K. Lucky for me, a guy stationed at Ramstein took it first! They also offered me a 959 in 1985 without even mention of a final price but it was way out of my league! Perry

When did I say that I paid sticker for the 944? It's a shame that your education, or lack thereof, and business experience, or lack thereof, did not result in greater reading comprehension. You appear unable to follow a 100 word response. I wrote that the sticker price was $36,500 but did not say that I paid that amount. I don't know how I can be any clearer. Or perhaps there is no problem with your reading comprehension and that was an attempt to discredit my opinions by casting me as 'one of those idiots that pays sticker price.' However this impotent attempt is doomed to failure as it is not based in fact. Secondly, in response to: And So essentially you agree with me. You paid $44,500 for a 911 but that wasn't the sticker price. There is no historical clarification in disagreeing with my generalization that 911s were about $60,000, which is not that different from their current price by telling us that you got a good deal on a 911 and only paid $44,500. Perhaps you could get a 2004 911 for a similar price, since you are so smart and worked in the industry. But the point is that the sticker price has not changed much for 911s over the last twenty years, especially compared to almost all other vehicles that have doubled and trippled in price. And nothing you have said has discredited that point, right or wrong?

I don't know anyone that has paid the base price for a new base model 996. They're always in the mid-70s (at least) as far as I can see.

Base sticker prices have not changed much at all in the last 15 years when you think about it. Porsche has always stuck it to you on options. Does anyone know if stuff like A/C was an option in the 3.2s. I am just wondering if the significant price increase from the 911 3.2 to the 964s was the result of more standard equipment like A/C, cruise control, stereo and other options that were prevelant in the US market. If so, the mid to upper $ 40s base price of the 3.2 might not be that realistic. prices did seem to level after the 964. if I remeber correctly, the 993 was actually introduced at a slight price drop to help spur sales on in the bad economy or upscale car market present in the mid 90s. Porsche has done well keeping its prices it a certain niche. If they went much higher, they would be in the more exotic market where they may fare less better. When you think about it, the 911s/996s are leaps and bounds better than other options present in the $ 60 to $ 80k range. To have done this and to have been able to keep offering advancements in performance with each model is a good thing. I think you get a lot of bang for your buck with the 996 which becomes readily apparent after owning one and driving one for a short period of time. BTW, the most espensive car prior to the CGT and other than the 959 was the 1993 964 Turbo S lightweight with the air inlets. This things costed $ 10,000 pounds more than the 996 GT2 when new. So the 996 GT2 is not only less costly, it offers superior performance.

Posted by Fishman: "...that was an attempt to discredit my opinions by casting me as 'one of those idiots..." I'm sure the unemotional and incisive logic of your reply will dispel any such perception... Perry