People in countries around the world are earning lucrative incomes buying and selling cars for profit - you could too! It doesn‘t 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!
It‘s 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 don't have to have a lot of mechanical knowledge to sell cars for cash, but you do need to know the value of cars. It's 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 you're 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 car's “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, it's worth spending a few bucks on some training. It could be worth thousands in additional profits!
It's 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. It's 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!
Don't 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, you'll 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. He's 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, you've 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 doesn't matter: it can work if the vehicle's 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 won't 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 it's probably worth it to apply for a dealer's 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! It's fun and exciting, and there is always room to expand your business. Just make sure you educate yourself well and remember that it's like any other business: the more positive energy and action you put in, the more positive results (and profits) you will receive!
Whether you are buying a car or selling one, you know how frustrating it can be. You need to find a buyer or a car quickly, but there are so many marketing options available. Which ones are the most effective? How can you be sure you are getting a good deal or selling your car for what it is truly worth?
Choosing the Right Car
For those who are buying cars, the first step in finding the right car is to decide the type of vehicle you want. You can spend hours scouring resources full of used cars for sale, but if you do not know what you want or need, you are going to struggle to find the right vehicle. First, make sure that you find a vehicle with enough space for your regular passengers. This does not just mean enough seats. Many of the vehicles with three rows of seats have very little legroom in the rear, so if you are transporting adults on a regular basis, your passengers will not fit, even though there is a seat for them.
Next, consider the amount of trunk or storage space you need. Will you be using the vehicle for vacations, or just for driving to and from work? Also, make sure you consider the gas mileage on the vehicle. With the ever increasing cost of gas, you need a vehicle that is as fuel efficient as possible.
Once you have an idea in mind as to the type of vehicle you want to buy, consider visiting an automotive dealership that has used cars for sale and test driving a few. This will give you a chance to check out the actual space inside the vehicle, get a feel for the engine, and see how comfortable the controls feel. Narrow down your search after visiting the dealership before you begin searching auto classifieds for a vehicle. However, be sure that you do not buy on this first visit. Car dealers can be pushy and make you feel like the deal they are offering is the best possible deal you will find, so you need to be tough to avoid this pressure. You will want to take time to search on your own for the truly best deal.
Sources for Used Cars
You can find the right car through a dealership, by shopping online, or through a private seller. The route you take depends on your preferences and the asking price of the vehicle. You can find cars for sale from private parties, in newspaper and magazine classifieds or by shopping online. Most people find that the Internet allows them to comparison shop and get a better price on the car they want to buy. Shopping online also helps buyers see a larger selection of autos, since they are limited to the inventory on hand when shopping at a dealership. Most dealerships also register with online classifieds, making the Internet the most convenient place to begin when buying a used car. There are many online automotive classifieds that are great tools to use when shopping for a used vehicle.
Financing Your Purchase
You can finance your purchase through a lender whether you purchase from a private party or a dealership. The best way to ensure that you get the car you really want is to get pre-approved for financing before you begin actively shopping. This will, of course, require that you have a car in mind so that you know the approximate amount of money that you need. Once you have chosen a vehicle and know the price, approach a lender and apply for a car loan. Once you are approved, you will be given a pre-approval notice that you can show a seller if you are ready to make a purchase. If other buyers who do not have pre-approval are interested in the vehicle, the seller will be more likely to choose you because you have the money ready to go.
How to Determine a Car's Value
Whether you are buying or selling cars, you need a way to determine the value of the vehicle. You can use many tools to help you set determine the value of a particular vehicle. One way to do this is to look in automotive classifieds to see what the asking price of similar vehicles is. Of course, you have no way of knowing based on classifieds alone whether or not the price a particular seller is asking is too high, but this can give you a general feel for the current market.
One tool you will want to use when determining the value of a vehicle is Kelley Blue Book. This guide, which is available online, allows you to see the average listing or selling price of a vehicle that is the same make, model, year, and condition as the vehicle you are either buying or selling. Keep in mind that Kelley Blue Book is a national guide, so the fair price in your location may be slightly lower or higher than the Blue Book value. The bottom line about the value of a car is that it is worth what the buyers in the market are willing to pay. If you are selling a car and have it priced just below Blue Book value, yet no one is willing to pay that, you have the car priced too high for your market.
How to Advertise a Used Car for Sale
Sellers have basically three options to use to advertise their cars. The first is to place a sign in the window and drive the car around town or park it in a visible location. The second option is to advertise in paper classifieds, such as automotive publications or the local newspaper. This can be an effective way to sell a vehicle, but it can also be quite pricey. The third option is the use online classifieds.
Sellers can benefit greatly from using the Internet to help them sell their cars. Just as shopping online provides the buyer with more cars to choose from, selling online provides a wider customer base. There are many free and low cost automotive classifieds websites that advertise used cars for sale. This makes the marketing simple, as the owners of the classifieds sites will promote their sites and draw in the buyers. All the buyer has to do is set the price, submit the information, and then sit back and wait for the vehicle to sell.
Finalizing the Sale
Whether you are a buyer or a seller, finalizing the sale of a used car is basically the same. Once the buyer and seller have agreed to a selling price, the buyer will present the money, usually in the form of a check, to the seller. The seller will then sign the title over to the buyer. At this point, the vehicle is considered sold, and the buyer can drive away in his new vehicle.
Both Michel John & Jay Gaulard are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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