Cut-Rate Karma: The 'New DeLorean'—At Half Price
As used car deals go, this is one to make you think twice. Used Fisker Karmas, which sold for $103,000 just a year ago as new models, are now being sold for roughly half price. In some cases, those trying to sell the luxury extended-range electric car on eBay cannot even get bids above $50,000.
Just ask Bill Michlin, a dealer with the Fields Auto Group in the Chicago suburb of Glencoe. He just wrapped up an eBay auction for a 2012 EcoChic version of the Karma with a top bid of $45,100. "I had 2,000 look at that car on eBay," he said. "We didn't sell it because it didn't meet the minimum reserve bid, but it will eventually."
Used Fiskers selling for 50 cents on the dollar is the latest example of how far the electric car company has fallen over the last four years. A company once touted as an example of how start-up automakers were changing the auto industry now owes the federal government $192 million and is no longer building new models.
The New DeLorean?
Thirty years after the DeLorean came to symbolize a futuristic car that failed to take off in huge numbers, the Fisker Karma is now viewed in a similar light. Approximately 2,500 Karmas were built in 2011 and 2012. But the Karma never became more than a niche luxury model. The electric car was rated by the EPA to get the equivalent of 52 mpg and was panned by Consumer Reports after the Karma model it was testing actually broke down.
Despite numerous problems, and the fact that used Karmas are sold without any warranty, some people still want this car. "Anybody who wanted this car before because it was knock-down gorgeous, but couldn't afford it, well now they can afford it," said Michlin. In fact, this weekend, Michlin sold a different Karma at his dealership for $59,700.
"The car is a pleasure to drive, it has horsepower beyond belief for an electric vehicle and it's so fun and so gorgeous. And now it's available," he said.
Equity Investors Selling Karmas
So who owned Karmas before they eventually wound up on eBay and in the back of dealerships where used cars are often held? In some cases, they were owned by early investors in Fisker: wealthy individuals who not only put millions of dollars to help get the company off the ground, but also bought some of the first Karma models.
Michlin says he bought used Karma models from early supporters of Fisker who no longer wanted the electric car because it symbolized a big bet that went bad. "It did cost them a hell of a lot of money," he said.
And when those people sold their Karmas for half of what they initially spent to buy it new just a year ago, were they upset? "I think they are upset initially when they find out what the market is," said Michlin. "They know why it is and where it is, but they didn't realize it would be so low for the car."
Limited Used Karma Market?
It's unclear how much longer the used Fisker market will offer so many cars. Like the DeLorean, the Fisker will always have a unique appeal. From a style perspective, the Karma is a hit. The issue is the technology and whether these cars will hold up over time.
Then there's the question of whether Fisker Automotive will survive. After laying off a sizable portion of its staff in April, the company will need a major capital infusion if it's going to survive. How does it feel seeing used Karmas selling for half of what they sold for a year ago?
We reached out to the crisis management firm that now represents Fisker Automotive to see if the automaker or its executives had a comment, but so far we've had no official response.
Meanwhile, Michlin is looking out for that next used Karma he can turn around and sell. "It is the most drop-dead gorgeous car that there is and people want that car because of the looks you get with it," he said. "There is no other car like it."
—By CNBC's Phil LeBeau; Follow him on Twitter: @Lebeaucarnews