Artificial Price Manipulation? Dealers in on it?

[verde2002]

I am wondering how much hand dealers have in manipulating the values of cars. For example the E30 M3 was available for around $20K all day long just a few short years ago, at some point dealers starting asking double that for no apparent reason and owners seeing that automatically raised their prices. At first most thought the dealers were crazy but at some point the market caught up with what they started. I feel the same thing is happening with our coupes. Dealers are asking astronomical prices, at least they seem that way now but soon owners will catch on and raise their prices considerably where a $75k coupe will be a normal sight to see and not the exception. Am I way off in my thinking?

 

[HB Chris]

Dealers can ask astronomical prices but there has to be willing buyers at those prices or they sit in inventory for a very long time. Every year there are fewer nice coupes left, maybe only 20% of the original 30,000 produced, who knows? Eventually supply and demand meets a happy medium and I think that is what we are seeing. As we are also seeing with early 911 prices, some want to jump on the band wagon and hope to make a profit in a couple years while others realize that if they don't act now they will be forever priced out of the market. Our coupes are iconic vehicles that many have lusted over since our youth and we are also seeing Porsche owners purchasing coupes as an alternative in addition to their 911 collections. And while the overall collector car market may be experiencing a bit of a bubble we certainly aren't seeing that with 911 or coupes values. Rising coupe prices may limit the number of prospective buyers but it is also helping to increase the value of the 2002 and 2002 Tii as a lower cost entry point into vintage BMW ownership, same with the e3. They are all great BMWs after all.

 

[OCCoupe]

Chris makes an excellent point. I think there also has been a little help from dealers pushing the prices up; but I think that it is mostly enthusiast driven. The m3 and m5 for example are iconic 80's cars. People my age remember these as their dream cars. The same group is now experiencing equity in their homes and they want to reward themselves as well as be in the cool crowd. There are more people today capable of affording a $100,000.00 car than there were 10+ years ago. which means there is more demand/competition. I look at it as a collector's pyramid based on what they can afford. Today's pyramid is a lot wider and each segment has grown. Plus many have made their money so easily that they don't understand the necessity to be fiscally conservative and or they don't understand the bursting bubble concept and feel that their money is safe in commodities. Something else to consider is that up until the last two weeks the stock market has been over inflated and many smart investors have moved their money to tangible assets and cash until the market makes the long overdue adjustments like we are seeing today. This could indicate an adjustment in the value of these iconic cars.

Old Pyramid

New Pyramid

 

[MyFemurHurts]

Dealers can ask astronomical prices but there has to be willing buyers at those prices or they sit in inventory for a very long time.

I'm the General Manager of a car dealership. This is spot on. Doesn't matter what we ask; what matters is what it sells for. Dealers don't like tying up money from their operating accounts in slow turning inventory. The slower it turns, the riskier it is, even with appreciating cars.

 

[verde2002]

I'm the General Manager of a car dealership. This is spot on. Doesn't matter what we ask; what matters is what it sells for. Dealers don't like tying up money from their operating accounts in slow turning inventory. The slower it turns, the riskier it is, even with appreciating cars.

I understand the need to move inventory but there are a few particular dealers that have had stock of particular cars for over a year with no reductions in price. I remember a few E30 M3's with asking prices of over $60k last year that were sitting for ages. A rare car at a dealership may be worth more unsold based on the traffic it brings both to their website and physical dealership.

 

[jmackro]

A rare car at a dealership may be worth more unsold based on the traffic it brings both to their website and physical dealership.

Parking a conversation piece in a showroom to drive traffic is very different from "manipulating the values of cars", which was the phrase you used in your initial post.

While a dealer will certainly spend money on promotion, promotion alone can't determine the selling price of his merchandise. As HB Chris pointed out, you need a willing buyer to set a price.

 

[MyFemurHurts]

I understand the need to move inventory but there are a few particular dealers that have had stock of particular cars for over a year with no reductions in price. I remember a few E30 M3's with asking prices of over $60k last year that were sitting for ages. A rare car at a dealership may be worth more unsold based on the traffic it brings both to their website and physical dealership.

Well using a car as a promotion is very different than sitting on it and hoping for a sucker.

 

[digixjairo]

I'm experiencing that on the buying end. I feel like if I don't buy one, I will be priced out. Owners jump on the bandwagon too. I've been hit up by owners wanting dealer prices. The bubble usually bursts.

 

[JFENG]

The only real price manipulation I've seen is big classic car dealers buying from each other at auction to push up record high prices. These purchases are intended to drive up prices for cars that one or both dealers already have in stock. The cost to them are the fees on one transaction, but the benefit is higher prices on multiple vehicles they will sell. If buyers don't up their willingness to pay after seeing a record auction price, then the dealers lose out on the auction commissions.

 

[craterface]

No manipulation here

http://enthusiastauto.com/qsearch/?...lLevel_1268B0D=1&selLevel_1268B1D=18&1574_0=1

I bought a 56K mile e30 M3 about 5 years ago for 24k. It had not been driven much, and I bought it from the first owner who was 94 years old! It needed some sorting, which I did. I had it for about 2 years and sold it to enthusiast auto for 27,500. They immediately listed it for 37k and sold it fast. 37k seemed like all the money at the time. Now they would sell it for 60 plus. They have a following, and they actually check over their cars before they sell and fix stuff that needs fixing.

Real end users buy their stuff. Their prices seem crazy, but that is where the market is.

Scott

 

[Gazz]

Check out a place in East Sussex called Munich Legends. http://www.munichlegends.co.uk/ I have a feeling that these people regularly test the market for support and resistance levels. They nearly always have some very desirable BMWs for sale, eg the ( sold ) M1 with 3125 miles and a CSL at £125,000.
The market can be manipulated, all you need are willing participants.

 

[HB Chris]

And dealers who have cars on consignment, these may sit a bit longer if owner refuses to lower his price.

 

[NewSixCoupe]

http://enthusiastauto.com/qsearch/?...lLevel_1268B0D=1&selLevel_1268B1D=18&1574_0=1

I bought a 56K mile e30 M3 about 5 years ago for 24k. It had not been driven much, and I bought it from the first owner who was 94 years old! It needed some sorting, which I did. I had it for about 2 years and sold it to enthusiast auto for 27,500. They immediately listed it for 37k and sold it fast. 37k seemed like all the money at the time. Now they would sell it for 60 plus. They have a following, and they actually check over their cars before they sell and fix stuff that needs fixing.

Real end users buy their stuff. Their prices seem crazy, but that is where the market is.

Scott

I've looked at two cars from EAG in the last month or so and I can truly say that they are the only dealer I'm currently aware of that I would buy a car from without a personal inspection. The photo packages Eric sent were remarkable, including a separate folder of just flaws, albeit tiny ones. They get a lot of flak for their pricing, but their cars are screened carefully, so you can pay more in the short term and know that you have a car that's well above average, or spend a lot less and then put that same money back into it over time. Just depends on whether you want a presentable driver or something really special.

 

[Administrator]

And dealers who have cars on consignment, these may sit a bit longer if owner refuses to lower his price.

I think this happens a lot more than we think. Small dealers have some space and want a car that attracts attention, along with the chance to make some good money. The owner gets free storage.

 

[twistinglane]

I believe EAG has a rather unique buy back policy. Probably an important consideration that has substantial monetary value to their buyers. I'd be hesitant to compare their prices with more traditional sales.

 

[rsporsche]

people in the e30 m3 SIG, are dazed by some of the asking prices that EAG quotes, but i think the work they do ... and how they stand behind what they sell does make a difference. sure, when they get something that's even better than they expected ... they hike their price and push the envelope. nothing new there ... that is done in all kinds of businesses.

 

[m_thompson]

It's not just cars. I volunteer for a computer museum in RI restoring 60s and 70s minicomputers. The market price for a DEC PDP-8 10 years ago was a few hundred dollars. There is one on eBay now with a minimum bid of $25,000. Some people are now paying crazy money for vintage computer equipment.

It takes two to inflate the prices, someone who has something that is considered desirable and asks a high price, and someone who has the funds and is willing to pay the high price.

The vintage car, computer, and likely other collectable item prices will inflate as baby-boomers are retiring and looking for an interesting hobby.

 

[Aussiecsi]

It's not just cars. I volunteer for a computer museum in RI restoring 60s and 70s minicomputers. The market price for a DEC PDP-8 10 years ago was a few hundred dollars. There is one on eBay now with a minimum bid of $25,000. Some people are now paying crazy money for vintage computer equipment.

It takes two to inflate the prices, someone who has something that is considered desirable and asks a high price, and someone who has the funds and is willing to pay the high price.

The vintage car, computer, and likely other collectable item prices will inflate as baby-boomers are retiring and looking for an interesting hobby.

I've moved with the times and bought an Abacus ..not very portable but nice colours . I still own a Crackberry which is purely out of defiance because of friends who say I should get "with it ".At least I can send encrypted messages to El Chapo !

 

[m5bb]

http://enthusiastauto.com/qsearch/?...lLevel_1268B0D=1&selLevel_1268B1D=18&1574_0=1

I bought a 56K mile e30 M3 about 5 years ago for 24k. It had not been driven much, and I bought it from the first owner who was 94 years old! It needed some sorting, which I did. I had it for about 2 years and sold it to enthusiast auto for 27,500. They immediately listed it for 37k and sold it fast. 37k seemed like all the money at the time. Now they would sell it for 60 plus. They have a following, and they actually check over their cars before they sell and fix stuff that needs fixing.

Real end users buy their stuff. Their prices seem crazy, but that is where the market is.

Scott

Scott makes a good point.
I always felt like the Enthusiast Group was a rip off but have a few friends who have bought and sold to them and they always seem to have the best cars and do the necessary repairs to make them right. Just a little hard to take at times. The saying is "buy all the car you can afford" and this is the place to get a car that is done.
Gary

 

[Randy]

I call them price pushers! Canepa is at 225 for his CSL the Bonhams car projected at that or more. Guys with money get advise where to put there money. Canapa sat next to Ron Pratt as Ron spend millions on a collection that he resold last year and was a wash a far as i can tell.
As now every e9 owner thinks it a 50k car as a new buyer I am priced out of original cars and am looking at full restos that are few more bucks for a better value. The cost of any resto work make an original at 50k that still has elephant skins a poor choice. I see a stalling because of this.
My 2 cents