What is the number of days to consider an 911 “aged” ? What is considered a good ROWC in car industry? I doubt return on working capital is lower than what they can profit off of this $100K asset waiting to sell it.
Roughly a birthday on a current model year, over 180 days on a prior model year (eg a 2020 in 2021, not just because 2021s are on the ground), but it can vary.
It’s highly unlikely the dealer has laid out the invoice cost of this or any car, it’s most likely floorplanned (they are paying just interest/fee on the total cost after 30-90 days, depending on their floorplan arrangement). So the carrying cost isn’t 100k, it’s 3 or very low 4 figures.
For dealer, probably. That said, overall cost of having inventory “not turning” has to be baked somewhere. Hence asked, what would be the acceptable ROWC in the industry. Porsche probably has a very very healthy gross profit though.
If their allocations are “turn and earn”, absolutely. I don’t think that’s the case with Porsche.
1 Like
We are getting really off topic. You can analyze cost structures for a zillion hours and it won’t mean shit. There is no rhyme or reason to when a GM or GSM goes below “cost” one day or turns down some gross profit the next.
2 Likes
You are doing math only on one side of the teeter-totter
First $1095 acq fee already eats 1/4 of the tax savings.
Then the big part is that atrocious Porsche MF which equates to 5.28% APR… This deal involves ~$15k in interest if my math is right.
You can get 1.99% nowadays on a new car without much hassle if not much lower (PenFed has it for 1.39% up to 100k). Even at 1.99% and 60mo which makes monthly almost identical to this deal, the interest paid is only about ~$6k.
However this only compares the interest of two ways of owning, the residual is probably still the biggest impact factor for the cost of ownership. Again as discussed multiple times before, with that MF and the track records of 911 depreciation, probably financing is the cheaper way to do it.