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Discussion Starter · #1 ·
I know there has been a lot of discussion about the price of an Elise and how they are on the rise. I haven’t seen much posted recently so I thought I would share some of the graphs I had put together. The price increase is more than exponential if you look at the BAT prices of auctioned cars sold (R2 fit of the exponential trend line is not that great). This plot is available on their website but I hand copied every sale into a spreadsheet to include miles and other factors. The plot I posted does not consider anything other than price (SC tend to go for more, special editions, etc.). I would say the prices are approaching a hyperbolic curve. If history is a guide, hyperbolic price increases are never good. Also interesting is the increase in the number of auctioned Elises each year. 2021 has more BAT auctioned sales than any other year and this year is not over yet (people also may not have been using auctions to the same extent 5 years ago). Also included is the average sale price of all the BAT auctioned Elises by year. You can see in 2021 they popped. So, what’s going on here? It has been mentioned that it’s a result of Covid, and/or people are feeling flusher with cash, and/or the expansive monitory policy our government is now engaging, and/or the numbers of these vehicles are dwindling and can never be replenished. (The laws of thermodynamics suggest we all will eventually be driving Elises with rebuilt titles). The interesting thing to note is that the increases were gradual up to about 2020 and then roughly a 40% increase in 2021. That may be a bit high because some rare cars have been sold in 2021 so call it a 30% increase 2020 to 2021. That period does correlate with Covid, but Covid, dare I say, has been tamped down a considerable amount recently and prices continue to rise. The effects of monetary policy are hard to calculate, but printing money means more cash sloshing around in the economy. Couple that with dwindling numbers of Elises and you have more money chasing fewer cars which leads to price increases. Cars are terrible investments, but I think that pertains to daily driven cars and the Elise is more than that. It is rare – when was the last time I saw an Elise on the road – never. To me that means prices will track above the average inflation rate which we know is only going to go up, up, up. Keeping your money in the bank is a safe way to lose money. I’m not saying invest in a Lotus and you will make money when (if) you sell. I’m say there are worse places to put money and most of those places you can’t sit in and drive. So why have I been collecting all this data on the Elise? – because I just bought one. For me an acceptable outcome is to not lose a lot of money (none if possible) if I ever sell and enjoy the driving experience in the meantime. I think breaking even in 10 years on an Elise, in terms of the value of a dollar today versus 10 years from now, is highly likely. Just my thoughts on where this is all going, but I’m no financial guru.

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Would be interesting to graph other makes that are in demand and see if there's parallel increases.
 

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You’ve had a regime change in psychology for used cars. That regime could change back, it could persist. There isn’t really a good way of predicting that because we’re in a unique environment that is probably having a meaningful impact on what is happening in the used car market (end of analog, ICE, semi shortage and supply chain challenges, and emotions are all helping drive prices). Either way, historical data pre-switch is probably not going to be very useful.
 

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I work in modeling - not the underwear kind but the math kind - and you just can’t slap an exponential curve on data that has so many variables. If you insist on an exponential model, you must bin the data so it is all either apples or oranges, but you’ve got pears, avocados, and even some beef in there. You mentioned that, so I know you know it, but it’s worth reiterating. BaT itself is a crazy variable. For whatever physiological reasons (they sure aren’t economic ones), BaT gets a massive premium that only came into play relatively recently. This rising tide has surely lifted all ships, but it’s still weird.
Rather than fit with respect to date sold, plot against miles. As BaT has gained traffic, miles have gone down on listed cars, so this might be better. I’ve found good luck by fitting a 1/(ax^2+bx+c) curve since you know price will be inversely related to miles. You could also add in the exponential relationship to year listed as a multiplier. Excel can solve that set of variables easily.
 

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BaT itself is a crazy variable. For whatever physiological reasons (they sure aren’t economic ones), BaT gets a massive premium that only came into play relatively recently. This rising tide has surely lifted all ships, but it’s still weird.
Completely agree. People buy with their eyes. Auctions are an interesting exercise in human nature ("Bid big before it's gone!"). The punters pick the car and seller apart and the group dynamics are interesting. If there are enough bidders who really want the car, someone will pay a premium price. BAT also has a tendency of accepting the very low mile pretty unicorns sitting on the original tires that have turned to dust. But they photograph well and they are pretty. At the end of the day, a car will sell only for what someone is willing to pay for it. "Value" is a dynamic concept.
 

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Fitting curves is probably inappropriate for this dataset for anything other than describing what has already happened.

And for that I would probably use a mixed effects model and ALL of the data for all cars on BAT to try and borrow information for what has been happening in the used car market in general. Even then, you are making assumptions about the stability of the underlying data-generating process that may not be reasonable.
 

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If you compare say an Elan (60’s of course) to a 240Z of the same years. The Z will sell for more it seems, but they produced 130,000z;s and only 10,000 Elans
Or what, about 25,000 Elise to a 250,000 Honda S2000’s

I think its what the market can bear

Apples to apples, there have been more nice Elige in the past year than ever before.

I still dont get the rarity of a marque, vs price. If you take some daft American “muscle car” they can be crazy monies for all I can tell is no reason. Vs something fun for near nothing.

In a way, I am glad prices haven’t gone crazy. Then again, maybe with mass produced Geely Lotus the old school will quadruple $.
 

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Discussion Starter · #9 ·
I work in modeling - not the underwear kind but the math kind - and you just can’t slap an exponential curve on data that has so many variables. If you insist on an exponential model, you must bin the data so it is all either apples or oranges, but you’ve got pears, avocados, and even some beef in there. You mentioned that, so I know you know it, but it’s worth reiterating. BaT itself is a crazy variable. For whatever physiological reasons (they sure aren’t economic ones), BaT gets a massive premium that only came into play relatively recently. This rising tide has surely lifted all ships, but it’s still weird.
Rather than fit with respect to date sold, plot against miles. As BaT has gained traffic, miles have gone down on listed cars, so this might be better. I’ve found good luck by fitting a 1/(ax^2+bx+c) curve since you know price will be inversely related to miles. You could also add in the exponential relationship to year listed as a multiplier. Excel can solve that set of variables easily.
I completely agree with all that has been said. Especially around BAT pricing. Auction dynamics are very different than when someone puts a fixed price on their car. A frenzy effect can happen that drives prices high and my guess is that this tends to happen when the bidding population is high. In other words, high demand. So yes BaT data may be somewhat exaggerated.
As far as the curve fit, I just wanted to show exponential is a poor fit, with the caveat I paid no attention to the attributes of each car. With that said miles has a pretty good inverse correlation with price. @ Cyow5, I will give your fit equation a try. In the end the price is what someone is willing to pay. The stock market closes every day at a certain price. This means roughly the same number of people who think the market is over priced for that day is equal to the number of people who think it is under priced for that day.
 

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I work in modeling - not the underwear kind but the math kind - and you just can’t slap an exponential curve on data that has so many variables. If you insist on an exponential model, you must bin the data so it is all either apples or oranges, but you’ve got pears, avocados, and even some beef in there. You mentioned that, so I know you know it, but it’s worth reiterating. BaT itself is a crazy variable. For whatever physiological reasons (they sure aren’t economic ones), BaT gets a massive premium that only came into play relatively recently. This rising tide has surely lifted all ships, but it’s still weird.
Rather than fit with respect to date sold, plot against miles. As BaT has gained traffic, miles have gone down on listed cars, so this might be better. I’ve found good luck by fitting a 1/(ax^2+bx+c) curve since you know price will be inversely related to miles. You could also add in the exponential relationship to year listed as a multiplier. Excel can solve that set of variables easily.
Agree. I think adding a dummy variable for year 2021 sales to reflect the chip shortage impacting new car production will show most of the gain in price is due to overall car shortage. You don't even need to model it, you can see it visually looking at the scatter plot.

This phenomenon (dramatically higher price in 2021) is not unique to the Elise. 718 and 996 Porsche as well as Alfa 4C exhibit the same increase. And the aforementioned cars (718, 996 and 4C) were not hot sellers previously, further demonstrating that the chip shortage is the likely driver.
 

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A frenzy effect can happen that drives prices high and my guess is that this tends to happen when the bidding population is high.
Never go to an auction high.
 

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One thing I have noticed since the pricing has gone higher is the way the bidding progresses. In the past bids would stay relatively low until last day and then progress upward to the final hour and then get interesting. The last ten or fifteen minutes would be very exciting. Now you get bidders with no intention of purchasing the car "helping" the seller out with a bid of 50-70% of the final price. Then it sits stagnant till the last hour before getting exciting. Anyone else notice this? I've been watching BaT for the last three years and it's what I have noticed.
 
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One thing I have noticed since the pricing has gone higher is the way the bidding progresses. In the past bids would stay relatively low until last day and then progress upward to the final hour and then get interesting. The last ten or fifteen minutes would be very exciting. Now you get bidders with no intention of purchasing the car "helping" the seller out with a bid of 50-70% of the final price. Then it sits stagnant till the last hour before getting exciting. Anyone else notice this? I've been watching BaT for the last three years and it's what I have noticed.
Sure, this is how eBay has always worked. What really makes BAT fun to watch, and different from a site like eBay, is when someone ups the bid in the last two minutes, the two minute warning is reset. Minimizes sniping. It's a REAL game of chicken and drives the price up higher more efficiently than a fixed end time, like eBay, where the item goes to whoever is using the fastest sniping app.
 

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Sure, this is how eBay has always worked. What really makes BAT fun to watch, and different from a site like eBay, is when someone ups the bid in the last two minutes, the two minute warning is reset. Minimizes sniping. It's a REAL game of chicken and drives the price up higher more efficiently than a fixed end time, like eBay, where the item goes to whoever is using the fastest sniping app.
It's that early on big bid change is what I've noticed from earlier BaT pre covid bidding. I don't watch ebay bidding just BaT.
 

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Many good thoughts on the data and modeling here. But nobody has touched on what I think is the most important market change, not coincidentally the one that made me decide I was going to buy an Elise at any price.

Unless we see an order of magnitude revolution in battery technology, odds are good that nobody will ever mass produce and market a 2000 pound sports car again. Ever. ICEs are on their way out, and rightfully so. But EVs are intrinsically heavier. The new Tesla roadster, which looks amazing, is expected to be >4000 pounds. Lotus likely won't get an EV under 3000 pounds.

So for those of us that like light, nimble cars, it's now or never. Supply will only get more constrained. It's possible that demand will also wane and price pressure will reduce... but to me that's like betting against Tom Brady: possible to be right, but in general not a wise bet.

So, yeah -- short term effects like COVID, chip shortages, monetary policy, mass existential crises. But there is a long term macro trend that I think means the market for small, light sports cars will out-perform the market for heavier GTs that can be more easily substituted with the latest and greatest EV in years to come.
 

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I would also add to your model, although I'm not sure how it would be worded, but "aging out of an owner". I think some of the unicorns that have shown up on BAT are some that the owner bought intending to never sell, or treat as an investment and thus maybe a cause for low mileage.
BUT unlike some of the others mentioned, the Eliges are a BITCH to get in and out of!! I have to think there are more than a few out there that are weighing the difficulty of use with an age approaching mid 60's to 70 years versus the cars going for more than purchased for, or at least the same.
If one has reached the age that each trip requires considerable thought about whether ingress and egress is a concern, then now is a great time to sell. THAT coupled with the "new" group of interested buyers is contributing to the BAT "perfect storm"..

I know in the back of my mind is when it will hurt way too much to get in and out.. already hurts a bit and I'm only 58.
 
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I'm 63 and try to stay in shape, so getting in/out is easier than it is for owners who are heavier or taller than me.(I'm currently at 5'10' and around 160 lbs.). I love driving my Elise, so this helps keep me motivated.

As for pricing, I sold my Elan back in 2005 with the intent of putting those funds into a slightly used Elise. I bought my car in 2007 with 2k miles on it, as I wanted one before a chunk of them were wrecked, abused, or modded. The market for the Elan will eventually shrink, as will the number of folks that know how to work on the things I can't handle. I figured that by the time I can't crawl out of my Elise, there will be plenty of folks a generation younger than me who consider the Elise an aspirational car - something they lusted after in their youth, but couldn't afford at the time.
 
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I'm 63 and try to stay in shape, so getting in/out is easier than it is for owners who are heavier or taller than me.(I'm currently at 5'10' and around 160 lbs.). I love driving my Elise, so this helps keep me motivated.

As for pricing, I sold my Elan back in 2005 with the intent of putting those funds into a slightly used Elise. I bought my car in 2007 with 2k miles on it, as I wanted one before a chunk of them were wrecked, abused, or modded. The market for the Elan will eventually shrink, as will the number of folks that know how to work on the things I can't handle. I figured that by the time I can't crawl out of my Elise, there will be plenty of folks a generation younger than me who consider the Elise an aspirational car - something they lusted after in their youth, but couldn't afford at the time.
Late 30s, 5'8", 170. Would be hard to get in and out of much taller or heavier. I'm one of those newer buyers on that graph. Partly for the same reason I got the TRX... these vehicles will never be available again a few years from now. Unfortunately for me, a lot of people came out of 2020 when doubt froze buying, and then had a good year anyway, and a better 2021, business-wise, and started 'overpaying' for vehicles. Agree the BAT phenomenon played a part for lots of people, and DriveTribe and others publicizing BAT auctions really drove traffic there, and the more traffic there is, the higher an auction will go.

That said, even if you buy high hoping not to have to sell low later, it isn't necessarily a dumb decision if you enjoy while you have. Echo the comments above, my wife was like "you did what when I was out of town visiting the inlaws?"
 

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Late 30s, 5'8", 170. Would be hard to get in and out of much taller or heavier. I'm one of those newer buyers on that graph. Partly for the same reason I got the TRX... these vehicles will never be available again a few years from now. Unfortunately for me, a lot of people came out of 2020 when doubt froze buying, and then had a good year anyway, and a better 2021, business-wise, and started 'overpaying' for vehicles. Agree the BAT phenomenon played a part for lots of people, and DriveTribe and others publicizing BAT auctions really drove traffic there, and the more traffic there is, the higher an auction will go.

That said, even if you buy high hoping not to have to sell low later, it isn't necessarily a dumb decision if you enjoy while you have. Echo the comments above, my wife was like "you did what when I was out of town visiting the inlaws?"
I 100% agree with the Elise but I don't get the TRX. There are already trucks coming to market in EV form that destroy that thing on power and speed, right? Won't trucks only get faster from here? Is it just about the sound?
 
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