Perhaps even 200K The bubble has to burst sometime. I remember when it was 20 and then 72 then back down to 40. This latest rise will get corrected, although I personally do not think it will ever go below 100 again. Remember this too: Money isn't worth what it once was.
I hope medalions goes in the millions. Like in new york.
If, they go up to $200.000. I am selling my medalion for sure. That is alot of money to live off.
I just sold my taxi. I got 140,000. That is good money.
It's a good trade only if the price declines. As I have stated previously, I think the price of a medallion will approach 175K by year end.
I believe that nobody should buy for a medalion at a higher price unless they can make more money with it. I was actually looking to buy, but everything I see (home prices falling & unemployment going up) tells me that medalions will generate LESS money as the economy continues to sink. I expect a dip in medallion prices before any increases (economy to go lower before coming back). Maybe you can hedge your bets buy selling anoption?
Joey- How did you sell? Did you know a buyer or advertise? Also, did you get a lawyer?
We don't know what the motives are for all the people who are posting here. Some may be honest and sincere in their opinions about medallion prices. But it is also possible that some are looking to push the price up so they can sell their medallions. Some could be looking to buy medallions and may be interested in talking the price down. Yet others may make their money on transactions and may have an interest in getting buyers to buy and sellers to sell.
Before deciding to buy or sell a medallion, please ask a lot of questions from different people in the industry whom you trust. Please do not form your opinion solely off of the postings on this site.
George Lutfallah
Chicago Dispatcher
I agree about not knowing people's motives (online or in person).
However, I am a finance guy and understand 2 basic things:
(1) a medalion is an asset, and an asset that enables it's owner to make a high return is worth more than an asset that produces lower returns (in a bad economy a medallion is more likely to produce lower returns); and
(2) regardless of the general rule above, the supply of medallions are artificially limited by the government (not the market), as a reesult you never know when a large amount of money may be put to use to buy medallions (if this were to happen, prices would increase despite the current returns provided by medallion ownership).
Anyway, my favorite thing about George's advice is to SHOP and COMPARE. I cannot agree more with this statement. You never know how good any transaction is until you see the alternatives (evaluate different opportunities and maybe don't do anything at all).
James,
Does a medallion produce lower returns in a bad economy? I always heard that in a bad economy people lose their jobs and look for work like taxi driving.
Because of the artificial limit of medallions like you said in point number 2, there is a surplus of drivers compared to the limited number of cabs. If you buy this argument, wouldn't that produce higher returns in a bad economy? This is just a theory. I don't know if it actually applies in the real world. Anybody know?
Thanks Trent- ood perspectives.
My 2 cents -warning it's probably worth less ;)
Generally speaking, in a bad economy it seems that people have less money to spend. Instead of taking the same number of cab rides as they did when the economy was good, they will more often look to spend marginally less on things such as cab rides (maybe they take a few more walks or bus rides, etc.).
I do like your point about more people looking to drive taxis during a bad economy. This may very well be true, and could be good news for medallion owners. In theory it would mean that medallion owners could charge a higher rent to taxi drivers as theer would be more of them. However, it seems that this would not cause any major changes since ultimately the medallion owners would face competition from other employers (e.g. someone could avoid risking the $600 and just work at MCDonald's or maybe they could buy a distribution route for less money and earn more.
Finally, it seems that a bad economy usually involves higher unemployment (IL now higher than the national avg.) and fewer pay increases, so I would expect that there will be fewer people with the money to buy a medallion. That said, I would be interested to learn how people get loans to buy medallions (can this still be done at good rates given the 'credit crisis')? Are there any recommended banks/lenders (the lower the interest rate the higher the price one could afford)?
buy a taxi medallion and you buy yourself a job
Someone knows. Wow. Buying a medallion is buying yourself a job. Jack you're on the ball!
If that is all it takes, just give me $140,000 and I'll give you 5 jobs ;)
150000 with rate will be 450000 think before buy job
I would like to see that too, but how much can be earned on an average 12 hour shift?
In order to justify another 3 times the current price (say 150K Vs. 450K) that medallion would need to generate 3 times more earnings in order to hold the same value. Given the current economy, I suspect it will be quite a few years before that happens...
