🚖 Going, Going, Gone?: Taxi Medallion Auction Highlights Tale Of Two Markets
Preliminary auction reports indicate 7 NYC taxi medallions were sold for ~$175k, with Marblegate itself potentially purchasing a few. Recent cash transactions tell a different story though
Today’s much anticipated NYC taxi medallion auction perhaps raises more questions, than it answers about the current state of medallion valuations.
Based on our discussions with several parties who had direct knowledge of the auction results, we believe that seven, down from the originally marketed ten NYC taxi medallions, were sold for ~$175,000. Interestingly, Marblegate, itself, may have purchased a few, with the rest going to private individuals / parties (who may have also gotten financing).
Remember, the auction appears to be for medallions that are going through a foreclosure process (i.e., the owner of the medallion has defaulted on his/her/their medallion debt). Marblegate maybe “credit bidding” their own collateral. In other words, Marblegate is the current lender on the foreclosed medallion. Since they already negotiated a City loan guarantee in the MRP+ of $170k, they likely wouldn’t sell the medallion for less than the guarantee they already have.
Again, all our own speculation and guesses, analyzing from the outside-in.
What Is A NYC Taxi Medallion Actually Worth Right Now?
So, does that mean NYC taxi medallions are now worth $175,000 or would that be a misleading statement? After weeks of discussions with multiple, trustworthy industry participants, it appears there is a tale of two markets.
💵 All Cash: Buying a taxi medallion with 100% cash
🏦 Financed: Buying a taxi medallion with a downpayment (10% to 30%) and getting financing (often seller) for the remaining purchase price
In the “cash” market, trustable sources tell us transactions, depending on the type of medallion (i.e. unrestricted, restricted WAV, alt fuel, etc.), range from around $110,000 to $130,000. In the “financed” market valuations range from $150,000 to $180,000 on the high end.
In other words, and as we spoke about before, we have a classic inefficient private market that (1) needs more institutional capital (i.e., lenders) and (2) needs the regulator (TLC) to provide more confidence that the taxi medallion market will be sufficiently protected (i.e., limit on the issuance of *new* TLC Plates).
We believe taxi medallion valuations still face a medium to long road to recovery, but at the very least there seems to be a light a the end of proverbial tunnel. Below, we share a video, recapping our thoughts on the auction and providing more context.
Video Summary
***DISCLAIMER*** We know many people want to know what happened at today’s auction. The results above are based on a high level understanding of what took place. If new information comes to light, we will keep our readers up to date. NONE of what we write or say should be taken as investment or financial advice.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace on YouTube ▶️
Seeing as Marblegate needed relatively higher medallion prices ($175k and above) in order to justify their lofty firm valuation, I would say today’s auction was a sham, especially if they bought their own (???) medallions to prop up the bids. I have much more confidence in the cash market prices as those are the spot prices, so $110k to $130k (depending on type) is it for me. Yes, I could see financing bumping the price a little higher but not by 35-60% higher at the $175k valuation. Imagine trying to buy a house for $500k cash or $750k if you finance. Makes no sense.
Give me a break , the author is patronizing, we know what your doing