Confessions of a car flipper...
Discussion
We've all heard the stories of the latest and greatest cars getting snapped up seemingly even before the order books go live, only for them to appear for sale online with huge mark ups on them. (For example £240k GT2RS are currently trading for £500k+)
With huge profits to be made for seemingly little work , i'm sure most of us, even though we may not like to admit it, have considered a flip ourselves.
However there still seems to be a bit of a taboo when discussing the subject, with there being little to no discussion online. As Pistonheads is the UK's biggest car forum, surely there are some flippers out there that can regale us with some some interesting stories of their car flipping experiences.
What did you flip? Did you plan on flipping the car or were the values too attractive to ignore? Did you have an expensive fail? etc...
I'd rather this not be a discussion on the ethics of car flipping, but more about the stories and experiences of people have have/do so...
With huge profits to be made for seemingly little work , i'm sure most of us, even though we may not like to admit it, have considered a flip ourselves.
However there still seems to be a bit of a taboo when discussing the subject, with there being little to no discussion online. As Pistonheads is the UK's biggest car forum, surely there are some flippers out there that can regale us with some some interesting stories of their car flipping experiences.
What did you flip? Did you plan on flipping the car or were the values too attractive to ignore? Did you have an expensive fail? etc...
I'd rather this not be a discussion on the ethics of car flipping, but more about the stories and experiences of people have have/do so...
I can see why people do this, if you could flip a Porsche and profit by the price of a house then it would be hard not to take the chance. What I don't get is why the manufacturers let this happen, surely if the market will take the whole supply at £500k per car then why not sell them for that price rather than let some shady trader take all that profit? The fact that the phenomenon exists surely implies their pricing is wrong and they could be making much more money.
A lady I worked with years ago insisted I take a Bluebird estate as well as the Mk2 Golf Driver I was actually interested in.
After a few days on the verge outside my Mum and Dad's house - stay classy! - I got a call from my Mum to say there was a banger racer on the doorstep.
I flipped that car for a tenner and I guess there's every chance he went on to literally flip it in the ring.
After a few days on the verge outside my Mum and Dad's house - stay classy! - I got a call from my Mum to say there was a banger racer on the doorstep.
I flipped that car for a tenner and I guess there's every chance he went on to literally flip it in the ring.
TurboHatchback said:
I can see why people do this, if you could flip a Porsche and profit by the price of a house then it would be hard not to take the chance. What I don't get is why the manufacturers let this happen, surely if the market will take the whole supply at £500k per car then why not sell them for that price rather than let some shady trader take all that profit? The fact that the phenomenon exists surely implies their pricing is wrong and they could be making much more money.
Agreed 100% with you there - I don't like it, but I think I'd struggle not to flip a car like a 911 GT3 for £200k profit.
TurboHatchback said:
I can see why people do this, if you could flip a Porsche and profit by the price of a house then it would be hard not to take the chance. What I don't get is why the manufacturers let this happen, surely if the market will take the whole supply at £500k per car then why not sell them for that price rather than let some shady trader take all that profit? The fact that the phenomenon exists surely implies their pricing is wrong and they could be making much more money.
Thing is, the whole 'flipping cars' exists purely because there are people with lots of money and no patience.Even if they sold a car for £500k, people would still pay more to buy it ASAP. The value is pretty irrelevant.
Having worked for a manufacturer whose cars are subject to flipping, we do try our best to get cars into the hands of those who want to drive them/keep them rather than flip them for a profit.
When dealing with the mega bucks limited stuff, the relationship is quite often held at the HQ level, with the dealers facilitating the servicing etc (and almost always getting their slice of the pie regardless of the source of the lead). In these cases it is a little easier and in some cases we are able to insert clauses into purchase agreements that give us first refusal to buy the car back, or even a minimum time before a secondary sale is permitted. Generally the punishment of being "off the list" is enough to deter unless they have a one-time desire to make a quick buck.
Dealers get the allocations and generally they can give them to who they wish, but sometimes we'll say "that allocation is for Mr X" - dealers will generally do what will make them the most money, which in most (but certainly not all) cases is also in the interests of the business.
It does leave us open to dealers coming to agreements with customers for buybacks which allow the dealers to sell the car as a used vehicle 6 months after delivery for over list - this doesn't really affect my place though as our premiums aren't so great to make it worth the dealers' while (generally speaking).
Overall there's a fine balance to strike and I do think there's a degree to which this is good for customers. Look at Ferrari/Porsche, if you get into their world, one of the consequences of them restricting the supply is that it keeps demand high which leads to stronger residual values. Rightly or wrongly it's a big part of the purchase decision for supercars for many, so from our point of view it makes life significantly easier.
The risk for the flippers I guess would be a change in the product plan, or a wider economic shift against them. If you're buying primarily to enjoy you will be prepared to take a bath to an extent, but if you're buying needing to get out with your head above water and all of a sudden the demand shifts you could end up with egg on your face.
When dealing with the mega bucks limited stuff, the relationship is quite often held at the HQ level, with the dealers facilitating the servicing etc (and almost always getting their slice of the pie regardless of the source of the lead). In these cases it is a little easier and in some cases we are able to insert clauses into purchase agreements that give us first refusal to buy the car back, or even a minimum time before a secondary sale is permitted. Generally the punishment of being "off the list" is enough to deter unless they have a one-time desire to make a quick buck.
Dealers get the allocations and generally they can give them to who they wish, but sometimes we'll say "that allocation is for Mr X" - dealers will generally do what will make them the most money, which in most (but certainly not all) cases is also in the interests of the business.
It does leave us open to dealers coming to agreements with customers for buybacks which allow the dealers to sell the car as a used vehicle 6 months after delivery for over list - this doesn't really affect my place though as our premiums aren't so great to make it worth the dealers' while (generally speaking).
Overall there's a fine balance to strike and I do think there's a degree to which this is good for customers. Look at Ferrari/Porsche, if you get into their world, one of the consequences of them restricting the supply is that it keeps demand high which leads to stronger residual values. Rightly or wrongly it's a big part of the purchase decision for supercars for many, so from our point of view it makes life significantly easier.
The risk for the flippers I guess would be a change in the product plan, or a wider economic shift against them. If you're buying primarily to enjoy you will be prepared to take a bath to an extent, but if you're buying needing to get out with your head above water and all of a sudden the demand shifts you could end up with egg on your face.
As a long-term Impreza Turbo owner in the 90's, I thought I'd have a change and order an Alfa 156. It turned up a few months later, had loads of charm but felt so gutless that I sold it a fortnight later. Three years later I heard that it had indeed lived up to the Alfa reputation of the time: several major warranty claims, followed by a new gearbox shortly after the warranty ran out. Whereas the Imprezas all took an absolute hiding and never let me down at all.
Personally i think it's as much to do with those who due to this activity are unable to afford the car they'd truly desire & would therefore drive as intended.
Example being a 991.2 GT3 at i think around £128k list. This is a car i'd treasure & could almost stretch to afford, however i couldn't get anywhere close at £250k & could never stomach the thought of knowing someone has pocketed a cool £120k, purely for having a place in the queue.
The second aspect & i believe this is more a Porsche trait, is that i'd need to have bought several less desirable models to stand any chance of getting a GT3. I don't want a Boxter, Cayman, Panamera or Macan & certainly couldn't afford to spunk away over £100k in depreciation just to be 'considered' for the GT3.
This second aspect is perhaps less to do with flipping, but as the market is so strong it will no doubt have a significant impact.
Ironically, my next car & lifelong dream will hopefully will be the 992 Turbo S (timing was all wrong for the 991.2 Turbo S i ordered in 2016) & i'm assuming this would sit at the top of the 992 range (until a GT2RS arrives), even then however it would have no chance in even holding its value, as for reasons i'm not sure i'll fully ever understand, the GT cars albeit cheaper are the only ones that go overs.
Example being a 991.2 GT3 at i think around £128k list. This is a car i'd treasure & could almost stretch to afford, however i couldn't get anywhere close at £250k & could never stomach the thought of knowing someone has pocketed a cool £120k, purely for having a place in the queue.
The second aspect & i believe this is more a Porsche trait, is that i'd need to have bought several less desirable models to stand any chance of getting a GT3. I don't want a Boxter, Cayman, Panamera or Macan & certainly couldn't afford to spunk away over £100k in depreciation just to be 'considered' for the GT3.
This second aspect is perhaps less to do with flipping, but as the market is so strong it will no doubt have a significant impact.
Ironically, my next car & lifelong dream will hopefully will be the 992 Turbo S (timing was all wrong for the 991.2 Turbo S i ordered in 2016) & i'm assuming this would sit at the top of the 992 range (until a GT2RS arrives), even then however it would have no chance in even holding its value, as for reasons i'm not sure i'll fully ever understand, the GT cars albeit cheaper are the only ones that go overs.
neverraced said:
As a long-term Impreza Turbo owner in the 90's, I thought I'd have a change and order an Alfa 156. It turned up a few months later, had loads of charm but felt so gutless that I sold it a fortnight later. Three years later I heard that it had indeed lived up to the Alfa reputation of the time: several major warranty claims, followed by a new gearbox shortly after the warranty ran out. Whereas the Imprezas all took an absolute hiding and never let me down at all.
Unless you sold the Alfa for more than you paid for it, I don't know what any of this has to do with anything, really.daddy cool said:
Doesn't bother me. Theres more people in the world worthy of my sympathy before I give it to someone that can afford a £240k car who has been prevented from buying it because someone else has already bought it for £240k and sold it on for more...
Likewise. Without submitting to a silly finance commitment, I'm too poor to buy any of the cars being flipped for properly massive sums so I don't let it bother me.
ETA: Actually, having done the sums, even with a silly finance commitment I still couldn't afford the likes of a 911.2 GT3 so I care even less!
Edited by MrBarry123 on Tuesday 20th February 15:03
When the Porsche Boxster was launched I ordered one for Mrs BC. There was a long delay which from memory was due to problems making the engines so I bought Mrs BC a TVR instead. The problem was that I forgot to cancel the Porsche and a few months later it arrived. At the time there was a long wait list so I sold it to a dealer for £2250 (a fair amount then) + the cost of the car. Mrs BC and I went off for a long weekend in Edinburgh at the end of which the profit was spent, we had either eaten it, drunk it or were wearing it.
Subsequently I have flipped 2 x M3’s and an M5. It’s down to ordering very early even before the car is announced.
Subsequently I have flipped 2 x M3’s and an M5. It’s down to ordering very early even before the car is announced.
I think the right idea is what I believe was the old Ferrari maxim: Make one less than there's a market for.
I can't blame people for turning a quick profit if they have the opportunity, I've managed it myself a couple of times (largely by accident, and at the bottom end of the market!), but I find the logic of artificially restricting supply to be a bit odd.
If 1000 people will buy your new car, make 999 of them, not 100.
Or if you're not sure and don't want to commit, at least have the option to keep making them as long as there's demand.
I can't blame people for turning a quick profit if they have the opportunity, I've managed it myself a couple of times (largely by accident, and at the bottom end of the market!), but I find the logic of artificially restricting supply to be a bit odd.
If 1000 people will buy your new car, make 999 of them, not 100.
Or if you're not sure and don't want to commit, at least have the option to keep making them as long as there's demand.
TurboHatchback said:
I can see why people do this, if you could flip a Porsche and profit by the price of a house then it would be hard not to take the chance. What I don't get is why the manufacturers let this happen, surely if the market will take the whole supply at £500k per car then why not sell them for that price rather than let some shady trader take all that profit? The fact that the phenomenon exists surely implies their pricing is wrong and they could be making much more money.
That wouldn't work. Made a £250k car £500k and people would flip it for £750k...I know a person who had a limited edition halo car and sold it for a tidy profit, enough profit to purchase a very nice car without touching the original sum. They weren't a flipper in the true sense though. They had the halo car for about a year and did a few trackdays and sprints in it so it was used properly in their ownership, got shot before the mileage being put on it would start to be a problem for the value.
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