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.
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.
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.
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.