Back in 2011 I wrote a blog post about the Porsche 996 Turbo, how I thought it was undervalued at the time and also how I figured that it would never really be collectable. A lot has changed in the Porsche 911 marketplace since then and indeed that article has been updated twice now. It has attracted much interest, so in response to various direct contacts and comments on that blog post, I’ve been asked for my views in the current state of the Porsche 911 marketplace. This could get messy, so here goes.
The Porsche 911 marketplace in 2020. Just my opinion. Nothing to see here.
This phenomenon is nothing new. It’s a cyclical thing which is running it’s course. Let’s wind all the way back to the beginning of the whole thing for a top level overview.
In the mid 2000’s 911’s were under valued compared to similar vintage cars of similar performance – EG E Type Jaguar.
They were actually too cheap.
Then the marketplace seemed to wake up to the 911. Not too long ago, a 964 was kind of unloved, available easily for less than £15k. I can recall G Series Impact Bumper cars for under £10k.
A 964 RS was £35k for years and years and years.
I believe the whole thing began with the 2008 banking crisis, people looking at investment returns and deciding to enjoy their money and put it into a car.
Then everyone began to realise just how cheap they were. The 964 in particular, in my view.
Values began to rise to somewhere close to perhaps where they should rightly be. So they’d gone from being too cheap, to about right.
Then as interest rates continued to be critically low, the whole thing gathered momentum. The values of the limited numbers cars, the RS models, Anniversary cars etc went crazy, climbing month by month.
This particular phase reminded me of the supercar frenzy of the mid 1980’s when people were scrambling to put money down on Ferrari F40, 355, Jaguar XJ220. Back then, you could take a significant profit on a car like that simply by owning one for a few months.
In fact, having a place in the queue was worth money.
More than two decades later, the same thing was happening here. The 964 RS went from 35,000 to 75,000 seemingly overnight. Then 120,000, then 150,000.
Eventually I saw cars that I knew fine well had been driven hard by their early owners. Not hammered, but driven as the factory would have approved, cared for but covered in flies and brake dust, stone chipped and with a cracked windscreen. Now newly refurbished, detailed to death and for sale through auction at 200,000.
What caused it? That combination of low interest rates, a fast, large, tax free profit – in the UK capital gains doesn’t apply to used cars – and above all dealers and auction houses talking up the market.
And The Dealers. Sorry guys.
With one or two exceptions, this may sound harsh, but the dealers and auction houses contributed to it.
The dealers and auction houses talked it up. Who decided that that same 75,000 964RS should be 120,000, literally just a few months later? The dealers. Particularly those dealers who were playing with other people’s money.
They will simply defend this by saying that it was market forces. Of course, they are right. Nobody was forcing you to buy one. The market force in play was a combination of people watching the prices rise and being scared of being left behind. Plus people with money to invest yet will little affinity or interest in the marque joining in. And of course, long time owners of cars deciding that the time was right to sell that car they had owned for several decades.
The commission sale dealers who took cars on consignment could simply pick a figure out of the air and see what happened. No worries about stock turn, how long the car was in stock. It didn’t matter as it wasn’t their money and also, it made them look good to be that dealer who achieved XYZ price for that collectable car.
The good dealers – yes there are some very good Porsche dealers – made a profit for sure. Yet I could see a big difference between the prices they were suggesting and the prices being hypothetically thrown in the air by the ‘commission sale’ specialists.
Buyers were frantically queueing up to get on the gravy train before it pulled out of the station. Nobody wanted to miss out.
Then the final element. People and investment funds coming into the marketplace with no interest in driving the cars. Seeing them purely as an investment opportunity. There are even investment funds established that were solely concerned with acquiring a collection of the most desirable cars on the planet to be stored away in a vault like vintage wine. I’d be interested to hear how that is working out in 2020. It may well still be working. It may not.
The perfect storm.
So now, we are in this situation.
- Everyone who wanted to cash in their Porsche has done so.
- The values were until recently at the top, so that anyone buying with a view to future investment is not buying, as there is no potential left.
- There are far too many cars out there that are simply NOT collectable. They were built in their tens of thousands, one of many, many cars. Yet the dealers have polished the turd and are still saying the same mantra – get in now, you will be too late. Sorry, that one’s not playing any more.
Who is to blame / at fault / contributed? We all did. The dealers had a birthday. Securing the cars was the hardest part, selling them was easy. They made big profits. So did the auction houses with the rock n roll sales and spectacular streaming online of record prices.
And of course we did. The owners who cashed in when it simply became crazy to own it any more. I had a conversation with several owners I respect highly. They sold the cars simply because they judged the time to be right and they considered what they could do with that money elsewhere in their lives.
And finally the buyers who saw a chance to own a Porsche for free and sell it at a profit.
The collectable cars will continue to be just that. Collectable. All of the other tens of thousands of cars out there for sale at stupid prices simply reflect a marketplace that hasn’t got real yet.
So Should You Be Buying a Collectable Porsche 911 in 2020?
Here’s my own, shoot from the hip, thoughts on each sector. There’s no evidence based factual analysis here, this is simply how I see things playing out, based on my former life in specialist car sales and watching the same thing in the 1980’s, more than 15 years of driving and writing about Porsche and as someone with no dog in the race.
Early cars and G Series Impact Bumper – By now, anything that is collectable is probably quite well known in the marketplace. You’re probably safe buying a well known car that is known to be ‘correct’. Beware of a car suddenly bursting onto the marketplace as being ‘undiscovered’ and use your common sense to make the checks. There are lots of specialists who can help with that. Use your gut feeling.
If you feel the desire to be involved in a restoration project, be aware that this is an open ended thing financially. People I know who have done it have enjoyed the process of discovery and have also warned that these projects can become money pits. I’m not saying don’t do it, if I found a car and was adequately funded, I would do it. Just be aware that the costs will spiral.
964/993 – I see those values intertwining. I feel that a scruffy 964 should actually be late teens, simply because there will be hidden expenses that you will not uncover and cannot know about, especially if a car has been stored unused for a long time. Then go upwards from there, values climbing depending upon history, colour, model – 2 wheel drive / 4 wheel drive – until you get to the upper reaches of cars that have been rarely driven and have won awards. Above that you then have the RS cars and the 964 Anniversary.
Same goes for the 993. As I said, I see 993 and 964 values mingling together, if only because for everyone who loves the six speed gearbox and better chassis of a 993, there’s someone else who loves the 964 shape and sees it as the last ‘true shape’ 911.
996 – These cars were super super cheap for quite some time with some real rats in the marketplace. Those cheap cars were real dogs, as by then they will have had many owners, the value of the car then also was a reflection of the owner’s appetite for maintenance. Run on a shoestring, many of these 996 models are money pits.
Right now however, normally aspirated 996’s are seeing a resurgence. I think that this is thanks to a combination of things. People are accepting that at under £20k, that’s what you will be driving, so get over it. Additionally, Porsche specialists are bringing out aftermarket programmes to improve them significantly. And also, the activities of, for example, Lee Sibley at Total 911 in showcasing what can be done with an early 3.4 996 has alerted people to the fact that they can actually be good cars.
996 GT3 and Turbo – GT3’s are a limited numbers Porsche, so all the usual rules apply. Unless you buy a complete horror story of a car you probably won’t lose money. However, I don’t believe you will make significant gains either. Turbos? I’ve written before about my views on the 996 turbo and I stand by that. A pretty bulletproof car, however built in plentiful numbers. Don’t buy an 110,000 mile black tiptronic with Java leather interior and expect it to become a collectors car. It’s not.
The collectable 996 turbos are the Turbo S and Turbo Cabriolet. Or a good, cared for six speed manual, X50 Pack car in something like speed yellow or guards red.
997 – The most widely produced of all the 911’s to date. So, come on. Please don’t tell me that your Atlas Grey 3.6 Tiptronic is a future collectable classic in your advert copy. It will probably be a car that you can buy, own and sell again without too much loss, even get your money back. Not collectable.
The collectable 997’s are obvious really. GT3 will never go wrong as long as you buy a car that hasn’t been a supercar experience car or had a fight with a barrier at Spa. That’s hard to determine, as by definition a GT3 should be driven on track. 4.0RS, the unicorn Porsche, don’t get me started, my heart beats faster at the thought of the sound.
Also, Sport Classic. A surprisingly good drive, a useable car and one that is maybe the ‘thinking mans’ collectable 997.
Turbos? Built in significant numbers. So for me, I would look for something that isn’t Tiptronic if a Gen 1. Think of a 3.6 Gen 1, 6 speed manual in Speed Yellow, Guards Red. Anything but black, grey, dark blue. Why did people have so little imagination when they ordered these?
There are others of course and I’m not going into the 991 and 911R thing…… Get over it.
Right now, there are still cars out there with prices that are a reflection of what the owner paid, not what the car is worth today. The whole momentum of ‘any’ older Porsche 911 being a future collectable car is a myth. By definition, a collectable car has to be a car of limited numbers, not one built as part of a production run of thousands. So stop trying to sell that Tiptronic 996 Cabriolet as an investment opportunity.
Those are my thoughts. Probably not the type of thing you will ever find in a Porsche magazine and indeed, I will probably be proved wrong on many of these points as time passes.
Feel free to shoot me down. But right now, in July 2020, that’s all I’ve got.