Vintage cars are 'a compelling market' amid recessionary environment: Bring a Trailer CEO

Bring a Trailer CEO Randy Nonnenberg joins Yahoo Finance Live to discuss the state of car collecting and the vintage car market, trends that his company is seeing, and the company's overall performance.

Video transcript

- Well, inflation doesn't seem to be worrying car collectors. Bring a Trailer, a classic car collector marketplace, has already surpassed $1 billion in sales this year. Well, joining us now to is Bring a Trailer CEO Randy Nonnenberg and our senior autos reporter Pras Subramanian joining the fun as well. Good to see you, Randy.

So this is actually coming off the back of two bumper years already. What do you attribute this year's growth to?

RANDY NONNENBERG: This year, we've just seen people continue to be very interested in the space. And frankly, our audience has expanded into people that might never have thought about buying a collectible vehicle or a sort of hobby vehicle. And we've really expanded the audience and given people more confidence to buy online.

PRAS SUBRAMANIAN: Hey, Randy, Pras here. So I kind of feel like there's two markets going on. We have the high-end Pebble Beach market that's sort of blowing away our cumulative scale sales every year. And then we have the kind of smaller niche stuff that you guys also operate in, the enthusiast modern classics.

What do you think is happening in that second market? Is that second market as strong as that premier kind of high end classic car market?

RANDY NONNENBERG: Yeah, when we invented Bring a Trailer, a lot of people thought it would be for old fashioned type cars. But it quickly became apparent that the model of transparency and reliability online and being able to sell a car at a very, you know, efficient fee and reliable way was interesting for modern cars, like the ones you see on your screen right now. Modern BMWs, Porsches, this sort of thing.

People are using Bring a Trailer to buy their daily driver vehicle. And particularly in the last six months or a year, with limited availability at new car dealerships and some dynamics in play like that, a lot of people look to our platform to go buy their car that they were going to drive every single day. And so that has really expanded our marketplace.

PRAS SUBRAMANIAN: You know, [? Rochelle ?] mentioned you guys crossed that billion dollar sale volume mark already in 2022, blowing away what you guys did last year in 2021. Now, we're kind of seeing the economy get a little bit kind of, you know, weaker here. The stock market is a bit kind of, you know, uncertain at this point.

Are you guys seeing any kind of hesitancy on your buyers on your site right now for these types of modern classics?

RANDY NONNENBERG: We haven't seen a slowdown in terms of submissions for cars to be sold. It's actually up substantially over last year. The interesting part of being a marketplace is whether it's an upmarket or a down market, people are going to look for, again, that sort of most efficient and reliable way to unload something. If they have a special car that they paid for a year ago or a year and a half ago and now things tighten up-- and they say, oh, maybe I'm going to unload-- I really think that we're kind of poised to be the place where they will do that.

So obviously, everybody loves the boom years when everybody's, you know, spending like crazy and buying rapidly. But as people decide to look for places to sell, it's actually an interesting position we're in as I think we'll see quite a bit of demand for the site's services, even if there is, yeah, a plateau or a slowdown.

- And so Randy, obviously, a lot of people think their car is worth a fortune. How do you manage expectations in this sort of environment, whether it's from what sellers can expect to get, or even the fees that sellers and buyers can expect to pay?

RANDY NONNENBERG: Yeah, well, we really just lean on that transparency. And that's what's really different. The internet was a scary place for people for a long time to try to sell a car. Who was going to buy it or who was going to show up at your house or how was that going to work?

And our sort of community dynamic that we built for listing vehicles online really changed that. You know, brand new cars are sort of a commodity. But the older ones, like you're seeing here-- and even special interest things from 5 and 10 years ago-- you really like to have a community and sort of a cast of experts that can discuss it. And so that has really given people that confidence that they needed.

And so I think we'll see that being a really attractive model going forward. And like I said, whether it's whether it's, you know, boom years or not, it's a compelling marketplace. And we see increased demand that's not letting up, even in this environment.

PRAS SUBRAMANIAN: You know, Randy, one of the areas eras you guys are focused on is '90s recently. This era is sort of seeing a little uptick. What's behind that, do you think? Is it just sort of like a nostalgia for Gen X and things like that?

RANDY NONNENBERG: Yeah, I mean, when I was a kid, you know, classic cars were from the '50s and '60s and had tailfins and chrome. These days, cars from the '80s and '90s you know, are 25 and 30 years old, just like they were back in the day. But that's sort of the era of when people like me were in high school or were kids and the kind of stuff we were looking at.

Those have come into their own and it's actually the highest volume of submissions and listings we have on Bring a Trailer are from the '90s and 2000s-- 2000, 2010. And people-- most people never guess that in are sort of surprised when I mentioned that a collectible and special interest car marketplace focuses on those sort of eras.

But that's by far the highest dollar volume. A lot of the record results that we're seeing are in that sort of area. And it's different than people would have predicted.

- And Randy, we were looking at some images there of the 1962 Jaguar XKE Series [? One ?] Roadster that was on your site. If I had an extra $200,000 to spare, I would have tried to bid on it. Is there a unicorn car out there that you would like to get your hands on? And what sort of price range are you talking?

RANDY NONNENBERG: Good question. I mean, our site serves all sorts of price ranges. Yeah, that one may have been $200,000, but I tend to tell my friends, you know, I tend to dream about $20,000 or $25,000 at a time. You know, there's a lot of different opportunities out there.

My favorite car is that we're still just now seeing trickle onto the website are kind of the racing cars of my youth. Again, it's this '80s and '90s type cars, the ones that had the sponsor liveries. They had some, you know, famous folks like, you know, Tom Cruise and Paul Newman driving them, that sort of stuff. That stuff gets me really fired up.

But we have, you know, 130 employees, and all of them have their different dreams and favorite sectors. And that's part of what makes the Bring a Trailer community super interesting is the variety and the different types of cars. So it's really all over the map.

PRAS SUBRAMANIAN: Hey, Randy, you guys are approaching the 100,000 auction listing mark, I believe, coming up soon. What does that mean for you and the team and what you guys have built there at Bring a Trailer?

RANDY NONNENBERG: Well, it's going to be a celebration. I mean, first of all, you may have been there in the early days. But when we turned on Bring a Trailer auctions in 2014, we did three cars. And we did three cars a week for the first little while.

And so talking 3 plus 3 plus 3, and then now, you're talking 100,000-- I mean, it's just a crazy journey that we've been on. Obviously, there's been a lot of operationalizing the business to be able to do that. Like I said, with such a staff, we are still a human-centered product.

So when you list a car on Bring a Trailer, you get a person to walk you through that and you get to talk to them through the process. So it's not just an automated website. So to get to 100,000 and still offer that human level of service is really challenging.

So we are celebrating. I think we're about to cross 88,000 or 89,000 listings this week. And so we're a couple of months out from that big milestone. And at least we'll throw a good party. But we'll hopefully be able to engage the whole Bring a Trailer community as well.

- Well, congratulations on that upcoming landmark. Bring a Trailer's Randy Nonnenberg and our very own Pras Subramanian. Thank you both.