Flip flops: Premiums are drying up in the collector-car market
In addition to benefiting from a trove of data, Hagerty Insider also relies heavily on the expertise of veteran market watchers, including Dave Kinney, appraiser and publisher of Hagerty Price Guide, who answers often-asked questions about collector-car values and buying and selling. Though Dave can’t put a value on an individual car on our site (that’s what people pay him to do in his appraisal business, after all), he can field questions about the appraisal process, how to go about buying and selling classics, and the industry as a whole. Have a question of your own for a future article? Ask in the comments section.
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Anonymous: My friend has bought two cars in the past two years and sold them for a profit after keeping them a few months. One Honda, one Toyota. He says I should “get in line and order a hot hatch to make money.” My wife is not in favor of this. What are your thoughts?
Dave Kinney: Ah, yes. “Instant collectibles.” “Can’t-lose deals.” “Worth more every day.” “Last one ever.” “They’ll never make them again.” “Final series.”
Can you really buy a new car and make money? Yes. Should you? Well, let’s talk about the realities of today, as opposed to 2022, or other years of a booming market.
The first car I remember well as an “instant collectible” was the 1976 Cadillac Eldorado convertible. I have a (very unrealistic) vision of two people at every country club across North America getting together and buying three 1976 Eldo droptops, one for each of them and the second one to split as an investment. It was to be the “last American convertible” (in reality, it was supposed to be the last “full-sized” droptop). When new, a few sold for well over the $11,409 list price (that’d be about $62K today, plus options, and even more for the Bicentennial Edition), and most of them were put away as a five- or 10-year investment. When that five- or 10-year timeframe was reached, the car-buying public had moved on, and there were in fact new American convertibles in the marketplace.
The 1976 Cadillac Eldorado then became a staple of the collector-car auction scene. In the 1980s, one punter commented, “It wasn’t a collector car auction if there wasn’t at least one 1976 Eldo on offer.” Most eventually achieved an auction price over list, and no-miles, one-owner cars still pop up today, typically selling for less than list, if adjusted for inflation. Needless to say, it wasn’t a great investment for most.
At about the same time as the Eldo gold rush, Chevrolet also made a series of ready-made collectible Corvettes. Some did well, but some languished.
Then there was the Ferrari Testarossa market of the 1980s. Everyone just had to have one of these great new cars from the venerated brand. This one I had some personal experience with: a friend of mine, unable to buy one anywhere near list price from a variety of dealers in his area, asked me to shop around in my location. I called a dealer principal whom I knew, hoping to get in on his allocation. When we discussed price, his response was that they had gone to “lobster pricing” on these hot-as-a-skillet rides. When I asked what lobster pricing was, his response was telling: “Like on the menu at a restaurant, Market Priced Daily.”
My friend, unwilling to pay double what was supposed to be the new price on a “fresh” Testarossa, went Ferrari-less for a few years. And when he finally bought his Testarossa, he paid well under the list price on a car that had fewer than 2000 miles. The market didn’t just fall, it collapsed. It seems that when the music stopped, there were lots more sellers than buyers.
So why the history lesson? Markets change. It’s their nature. Just because something is super special, last of its kind, or white-hot right now, does not mean it will stay hot forever, or even with the change of seasons.
All that takes us to today. In my roles as publisher of the Hagerty Price Guide and co-host of the Hagerty No Reserve podcast, I’m always looking at current and relevant sales. I attend live auctions and watch internet-based sales on sites such as Cars & Bids, Hagerty Marketplace, PCarmarket, MB Market and dozens more, including Bring a Trailer (BaT). And in watching all these spaces, it appears to me that the bloom appears to be coming off the “buy on Tuesday, sell on Saturday” rose, especially if you wish to make real money instead of just trading dollars.
Are there still cars that bring a premium over MSRP? Yes, and they currently include a myriad of Porsches, new Z06 Corvettes, and a few others.
Let’s be clear, however. The days of the “easy” $10K or $15K flip are coming to an end for now, and for many cars, those days appear to be already over.
Below is a list of cars with less than 100 miles that appeared on BaT within the past 30 days. Some sold, some failed to sell, but in each case, the result is less than enthusiastic. Please note that I have no way of knowing what each individual paid in the case of cars listed as used. Also, any add-ons, dealer fees, and taxes might also have come into play, all of which could significantly add to that MSRP figure. I’ve also left out BaT’s buyer premium which, as the name implies, only changes hands between the buyer and BaT.
2024 Acura Integra Type S
Much anticipated as a car to spice up Acura’s rather bland lineup and for its revival of one of the most beloved tuner badges of the 1990s and 2000s, the Integra was one of the most talked-about new cars this year. Despite limited availability and a lot of buzz, though, this one was a no-sale at $53,095, just a few hundred dollars over its MSRP and well under the total asking price of $63,321 with dealer add-ons.
2024 Ford Mustang Dark Horse Premium
The Mustang Dark Horse is another exciting all-new performance car that a lot of drivers want to get their hands on. This 34-mile car sold last month for $79,500—more than the $73,295 MSRP, but certainly not enough to retire on, and probably not a profitable flip at all when you factor in all the associated costs.
2023 Ram 1500 TRX Crew Cab Lunar Edition
A new, limited-edition 702-hp pickup sure sounds exciting, but this one sold last month for $100K, which doesn’t even match the $106,445 MSRP.
2023 Ford Bronco Raptor
Similar story to the Ram TRX, with a new and exciting performance truck failing to materialize a profit from a flip. The 23-mile Bronco Raptor sold for $96,000 against an MSRP of $92,505.
2023 Dodge Challenger SRT Hellcat Widebody Jailbreak Last Call
The final version of a specific car can get would-be flippers and collectors excited, and with this 18-mile Challenger Hellcat the word “Last” is right in its name. In the end, though, it sold for $97,752, barely over its $95,126 MSRP.
Is the market taking a breather? Is supply meeting demand? I think the best way to view it is that, after a few years of sellers making all the rules, the market is returning to a more normal time. I don’t know about you, but I’m counting this as a good thing.
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Normal market is good–for a change! Think it may go in the opposite direction for awhile, like new car sales.
The market was flipped when cars like the Shelby’s sat for years unloved and now demand great money. Now everyone is trying to guess what the next big car will be.
The trouble is only high end very limited super cars have much assurance of great value and most cost over a million to start with.
But the rest are generally cars today rotting in a driveway sone place unloved or even hated till the market demand changes.
The superbird and Daytona were hated forgotten cars till it change. Cobras were used up junk race cars till the market changed.
Even a 250 Ferrari GTO was rotting in a driveway in Cleveland till the market changes.
It is hard to predicted future here. Many cars like the early ZR1 and 928 never saw the bounce. But today the late 70’s trans Am in black and gold it 10th anniversary are both jumping fast on the charts.
In the 80’s an IROC may get crazy. Even today many V6 low mile Fiero’s are cresting $25k in the right options. A Shelby GLHS may suddenly jump up should Rad Wood embrace it.
The key to this only buy a car if you love the car not just in hopes to make money.
If you want to make m9bey it takes money to reduce the risks with cars proven to be of value like a GTO Judge Conv.
Look if you buy what you love you will still have a car you love.
The ones to make money on now are good low mile c5 Corvettes. They have been increasing around 30% per year. My buddy just sold one after 5 years and made $5k even with 90k miles on a coupe.
No that is not big money but it is a profit. Had it been a drop top or Z06 it would have been more.
You want investment property is where it is at.
I just bought a black 2002 C5 Corvette base with only one option: MN6 T-56 & 3.15 rear gears for $18K USD @ 39,500 miles. Prices have been climbing as I’ve searched.
Hopefully the dealer markups will die. But as long as fools decide to buy cars with them it will continue.
In 1977 I read an article in the Wall Street Journal saying that the upcoming Silver Anniversary Corvette would be worth $50,000 in five years. Having owned several Corvettes by that time, I thought, what the heck! I hustled down to my local Chevy shop and ordered one. After a year of waiting, it finally arrived. I was offered a very nice piece of riverfront property for it before it left the dealership. Oh no, I was going to get rich on this one….. Five years later I sold it for a profit that was about equal to passbook savings of the time. It had 17 miles on the odometer and plastic on the seats and steering wheel with window sticker still attached. The riverfront property today……worth about the value of two new Z06 Corvettes! That’s just how I roll.
BaT has done more damage to the used car market than anything else I can think of. That ridiculous pricing over there has also, unfortunately, carried over to a lot of the listing on Hagerty.
Add for mouse proofing your car