Buying and selling used cars can be an extremely profitable endeavor if you go about it in the correct manner. If you want to try and make money this way you should be aware that the government does regulate this type of activity. So what do you need to know about buying and selling used cars for a profit?
Starting off obviously you will need some cash to purchase the vehicle. Finding the vehicle to buy for resale may take some time and effort. The ideal car is one that is a bargain but has the potential to make you a profit in the future. You need to consider if you are purchasing a car that somebody else would want to buy. You want to approach this business with a clear unbiased mind and forget about your personal preference. Searching for the car can be done by looking in classifieds magazines, researching online or just visiting second hand car dealers.
Some cars are more suitable for this type of venture. Small runarounds and work vans may be good types of vehicles to look for. Check listings to see how much they sell for. Maybe even compile your own small database to see the price dynamics of the models you specialize in. It’s important to consider what type of repairs the vehicle might need. When you have found the car you want don’t be afraid to haggle with the seller. What have you got to lose? Remain polite and don’t be aggressive and you could get a substantial discount.
The vehicle in question may not be drivable so you might need to get it towed to the required location. The cost of transportation should be incorporated into your budget. However, you don’t want to buy a complete wreck unless it is a valuable classic car and you are a restoration expert. Buying cars with minor problems can be a good idea. Fix it, clean it up and sell for a profit.
When you have found the vehicle you need to do a comprehensive assessment of the condition of the car. Read online car reviews before you buy to identify the weak spots of the particular vehicle. What’s missing? What’s damaged? Does it go? The majority of cars that don’t run are quite easy to fix. The battery may be dead or you might need to check the spark plugs. A shop manual will come in extremely handy when trying assessing and fixing your car. Getting the car running again will be a process of elimination and you should not replace anything on the car until it is running again. When the car is drivable you need to make it look as attractive as possible for resale.
This is a vital part when trying to flip the car for profit. You should vacuum the inside, polish the paintwork, give it a good car wash and steam-clean the engine and undercarriage. If the seats have been damaged then you can hide this by purchasing cheap seat covers. By making the car look as new as possible you will greatly increase your chances of selling the car. You can replace inexpensive parts of the car to maximize the resale price. Always set a budget and stick to it. Now the car is ready to be advertised.
Place the car outside your house and attach a “For Sale” sign. You can advertise online by placing a free used car ad, in local publications or put up a notice on advertising boards. Try not to be too greedy. Try and undercut people who are selling a similar vehicle.
Buying and selling a used car for profit is not easy. You need to find a suitable vehicle, put some effort into bringing the car into good shape and then advertise through the right avenues. Possessing some business acumen is a requirement but if you take every step in a professional cool-headed manner you can turn a profit relatively quickly.
Squirrelers, this is an interesting guest post. It’s an intriguing way to make money, but not for the faint of heart. You are essentially becoming a used car dealer (but on a smaller scale).
Don’t know if I’d have the stomach for it. I don’t like any business that requires you to purchase expensive inventory. And if you want to scale your business you need a lot of capital up front with a fair amount of risk. Of course there are a lot of used car dealers that do very well….
I have to agree with the above…it’s risky, and there is a great deal of opportunity cost for holding on to a vehicle while you wait to sell it. Not to mention the risk on the buying side as well. Still, an interesting article, and I’m sure a method that many out there have used effectively before.
When I lived on the other side of town there was a house that ALWAYS had a car in front for sale. I bet there were no fewer than 7 different cars in any given month, and with probably 5,000 cars per day passing buy, this particular person had to make a mint buying/fixing/reselling them.
Not for me, but for the right person, I can see where it makes sense.
Ya its correct that we can earn some profits..but this kind of things need much more efforts to sell one car..If you like to be a big dealer or selling more and earn more ..then you need to invest some amount to get into this kind of business.
Good points and I am agree with you every business has need to more money. If you are a car dealer then you must have to verities of vehicles to sell then you can only maximize your profit.
I do it to make extra money on the side and because I like the thrill of the flip. I usually only move 1 car at the most each month.
You just have to be smart and patient. And make sure you’re not buying a car to flip from someone who is flipping it as you don’t want their sloppy seconds.
If you click on my name, I actually posted a video on YouTube showing how to easily tell the difference from a real owner looking to get rid of their car and a flipper. It’s a real simple trick. Watch it 🙂
Another good rule to follow is to make sure that the car you buy to flip is something you would feel comfortable letting your wife, mother or daughter drive. (unless of course you want your wife dead :P)
Oh I forgot one other thing. When it comes to pricing your car you want to flip…
Don’t list it for what you want or just a couple bucks more than what you want for it.
Make sure you list it for $400-600 more than you want to get for it because you know people are gonna chew you down. So this way you let them do it, they feel good about the purchase and you get your number anyway.
It works like a charm 🙂
Good Luck!
i started my business with 1000 dollars in my pocket buying my first car once my first car was bought and sold I rolled over a bit of that into my next car and didn’t start seeing a profit until my third car so basically its just the start up cost like any other business tho this start up cost is fairly low I also have a advantage being im a mechanic and have ben for 18 years working on various types of makes and models you can do it. there is a very good profit to be made.