As a new generation of collectors signed up to purchase classic and used cars, Bring a Trailer, an online marketplace for automobiles, said it anticipates ending the year with a record $1.35 billion in sales.
Bring a Trailer’s co-founder and president, Randy Nonnenberg, told CNBC that sales for the year are up 63% from $829 million in 2021.
During the Covid pandemic, the San Francisco company’s website attracted a flood of young car traders and made it simple for collectors to buy and sell vehicles online. These young car traders sold everything from seven-figure Ferraris to $60,000 Corvettes and $15,000 Saabs.
The question now is whether the car-collecting frenzy brought on by the pandemic will endure if there is a recession. According to Nonnenberg, there is no indication that business at the company is slowing down.
“The big challenge we have is handling all the demand,” he said.
The traditional collector car buying and selling industry has been disrupted by Bring a Trailer, which Hearst Autos acquired in 2020. However, traditional classic car auction companies like Mecum, RM Sotheby’s, and Gooding & Co. also had successful years in 2022. With the acquisition of Broad Arrow and the launch of Hagerty Marketplace, an online marketplace for sales, Hagerty, the classic car insurance company, also entered the auction market.
The demand for and price of used cars have begun to be impacted by increasing interest rates, recessionary fears, and rising car inventories. According to Nonnenberg, some auto prices have decreased, and the average sale price has decreased slightly in the second half of 2022.
However, he claimed that Bring a Trailer’s business strategy, which is based on inexpensive, simple, and effective car buying and selling, could benefit in a downturn. The buyer fee is 5% of the final sale price with a cap of $5,000, and sellers pay a flat fee of $99. That is significantly less expensive than many dealers or standard auctions.
“There will continue to be horse trading,” Nonnenberg said. “If people have had their car for three or four years, and they want something else, or their financial situation changes suddenly and they have six cars and they want to sell two, that’s still good for our business model.”
This year’s growth for Bring a Trailer was fueled by higher sales volume and vehicle values. Each week, up to 700 cars were sold for an average value of $54,495—an increase from $47,500 in 2021.
Due to the company attracting wealthier buyers and sellers, this year saw 145 cars sell for more than $500,000—a 172% increase from 2021. The most expensive vehicle it has ever sold was a 2017 Ferrari LaFerrari Aperta that sold for $5.36 million in May.
Bring a Trailer wants to grow its collector and auto enthusiast community in addition to increasing sales volume. There are about 413,000 registered bidders and over 900,000 registered users.
According to Nonnenberg, the company also intends to host more live events and is collaborating with local market partners to extend services to buyers and sellers.
Nonnenberg stated that the main objective for 2023 is to use improved technology to cut down on wait times for listing cars. According to Nonnenberg, the current average wait time between submitting a car for listing and it becoming live on the website is 26 days. “We would like that to come down to 10 days, that’s the noble goal,” Nonnenberg said.
(Adapted from CNBC.com)