People in countries around the world are earning lucrative incomes buying and selling cars for profit – you could too! It doesnt necessarily require a lot of investment, and you can create a nice second income in your spare time. Of course, you can also make a full-time business of it and earn a very good income – the choice is yours!
Its actually a very simple business. Your success depends on you knowing things such as which makes and models are the best to flip for good profits, where to find and buy them at bargain prices, how to negotiate with sellers and buyers, and how to advertise effectively. Learn as much as you can, take a methodical approach, and you can quite easily average a few hundred dollars profit on each lower-priced car you flip and a few thousand dollars on higher priced models.
What you need to know
You dont have to have a lot of mechanical knowledge to sell cars for cash, but you do need to know the value of cars. Its best to focus on vehicles that are in reasonable demand, and to make sure you get them at the right prices. As with investing in real estate, when you buy and sell cars your profit is actually made when you buy. In other words, the less you pay for the car the more you will make when you sell it.
How to get started
If youre interested in buying and selling cars for profit, start learning about your market. Look at classified ads, attend auto auctions, check online and even look on dealers lots. Note which makes and models appear to be popular, and get an idea of what prices are like on those ones. Compare prices between private sales, dealers and auctions, and make notes.
You want to learn what you can potentially sell a given model for, so you know how much to offer when you find one for sale. When considering what to offer on a vehicle, used car pricing guides (the blue book and the like) can be used as references, but keep in mind that some only show inflated retail prices. This is a great reference for you as a seller, but as a buyer you want to know the cars trade-in or wholesale value. Some of the used car pricing guides list trade-in prices as well as retail prices.
Once you get a good idea of your local market, you can start looking for deals. We also highly recommend that you find someone who is already doing this profitably. Take them out for lunch, find out what they do and how they got started, and pick their brain for tips and advice. Perhaps he or she will even mentor you on your first few deals.
Learn as much as you can on your own as well. There are a variety of books, courses and other materials available on buying and selling cars for profit take advantage of them. Considering that you can sell cars for cash part-time and still make thousands of dollars, not to mention a lucrative full-time income, its worth spending a few bucks on some training. It could be worth thousands in additional profits!
Its a good time to get into the business!
You can buy and sell cars profitably in any economic climate, but a fluctuating economy (such as the present one) can yield some definite opportunities for you.
For example, people whose financial situations are uncertain often decide to sell their vehicles to get spendable cash as quickly as possible. These motivated sellers provide you with a good range of vehicles to choose from, usually at discount asking prices.
Motivated sellers can usually be talked down even further. Its entirely possible to pick up a good vehicle for less than 50% of its resale value, and 65%-70% is common. You then resell the cars that you picked up at a substantial discount to new buyers for a lesser discount. The difference between the prices minus taxes and transfer fees is your profit!
Dont worry about being able to sell your purchases: there are always people looking for well-priced vehicles and as long as you choose the right models and get them at the right prices, youll find buyers.
Your seller can also be your buyer!
In some situations you can even buy and sell to the same person. Consider the following example: a fairly well-off seller has to sell his BMW (worth $55,000) to cover some debts caused by the fluctuating stock market. Hes only asking $50,000 because he needs a quick sale. You offer him $47,500 and he accepts.
Now this seller needs a vehicle, perhaps in the $20,000 range this time. You just happen to have access to a nice older-model BMW in that price range (which you can pick up for $15,000) and you offer it to him at $20,000. He accepts. Right there, youve made $5000 profit on the older BMW and picked up a newer BMW for $7,500 below resale value all in one deal. This example is hypothetical, but this kind of deal takes place all the time. The dollar amount doesnt matter: it can work if the vehicles worth $2000, $20,000 or $200,000.
One more thing…
Depending on where you live, if you sell more than a certain number of cars per year then you may need to apply for a dealer license. If you buy and sell cars for profit part-time then you probably wont need a license; most states and provinces allow you to sell 4 to 6 cars per year without one.
One way to sell more cars without a license is by recruiting friends or family. When you buy cars, have them register it in their names in return for a percentage of the profits. As an example, if your state or province allows 5 unlicensed sales per person per year you could buy and sell 5 cars yourself, 5 through a friend, and 5 through your spouse or partner.
However, if you plan on selling more than that its probably worth it to apply for a dealers license. The paperwork is usually straightforward, and being a licensed dealer also gives you access to more resources for buying and trading cars at wholesale prices: dealer networks, dealer-only auctions and more.
Go for it!
You can buy and sell cars for profit and make a lucrative income doing it! Its fun and exciting, and there is always room to expand your business. Just make sure you educate yourself well and remember that its like any other business: the more positive energy and action you put in, the more positive results (and profits) you will receive!