Your emails: Why do Porsches hold their resale value?

Okay, lets get to your email. The first one comes in from Alex L., he's in Toronto. He asks Why do Porsche 911s seem to have next to no depreciation? It almost begs the question he asked. Why anybody would by an M3 or M4 or a C63AMG. Better badge. Simpler performance and longer lifespan and lower overall cost is how he sees the 911 versus the other guys. First of all, these are fighting words, but I'm not gonna get in the middle of this, Alex. You're not drawing me into this. But I will look at the values of these cars and not try to rank which one is better than the other Let's use the numbers from ALG, one of the absolute bibles in terms of car depreciation. First, two year residuals, where you might see a common lease return. Mercedes S550, known as one of the kings of the money losers, has only 53% left after two years, followed by M4 Coupe, C63 Coupe. 911 Turbo, S, and base 911. Like with that S class, let's throw in a Honda CR-V as an industry benchmark on the other end. Now let's look at six year residuals. That S class is down to a quarter of its original sticker, not too much different for the M4. C63 gets better, you're into the 30s with 911s. And, of course, our benchmark CR-V is close to half. So there is a healthier residual on the 911's, but it's not night and day, it's not life changing money, although I agree with you, the impression around 911's is that they are like a goldmine, an investment from day one, even on a new one. First of all let's take a look at what's going on here. Porsche's really good about having a savvy pipeline, they know what cars to make, And they all sell. They have tight to nonexistent inventories on certain models. They just don't have a lot of float that they're trying to move with promotional pricing. That does wonders for you residuals. Then you got this idea that the classic 911's have been on a tear. That's a nice halo from modern 911's, though it's not really directly connected but halo is a big deal in the car business. This is a car you buy because you want. Not because you need it. Nobody needs a 911. As a result, you're more likely to pay whatever the going rate is. Look at the price of these cars. They start at 100 now. That's amazing if you think about it. Finally, the 911 truly can be said to be a car that occupies the class of 1. If you want a 911. There's really only a 9/11 in terms of the whole package. And that also makes it valuable upfront and valuable on the backside in terms of residuals.