Flipping cars can be a great way to make supplemental income, especially if you are knowledgeable when it comes to vehicles. Even if you are not an expert you can still make money flipping cars with the right information and dedication.
Flipping cars basically means buying and reselling vehicles with the intent of making a profit.
Sounds easy, but there are many variables that come into play that can determine whether or not you are successful. Let’s take a look at how you can make some easy cash with this great hustle.
What is Flipping Cars?
Generally speaking, flipping cars typically is done by purchasing used vehicles. The idea is to buy a used car for a lower amount than it is worth and resell it for a greater price.
Sounds easy, but you have to know what you are looking for in order to find opportunities to turn a profit.
Flipping is typically done privately which means avoiding the dealership. The objective is to smoothly buy and sell a vehicle in the little amount of time possible while also making a profit.
There is plenty of opportunity out there to find underpriced vehicles or vehicles that need a little TLC. You can easily make a profit if you know what you are doing which is why knowing where to find these deals is essential.
Choosing a way to supplement your income can be challenging but I believe flipping is one of the best and most consistent. The reason flipping cars is such a good side hustle is simply because of the constant demand for used vehicles.
Not everyone wants to buy or lease a new car which means there is a chance for you to make some dough.
Sometimes you just get lucky and find vehicles for cheap for no reason other than people not knowing how to price used vehicles. Most of the time you have to find vehicles that need small mechanical repairs or some cosmetic work in order to increase their value.
Most people are lazy and don’t want to take care of the little problems their cars might have, but if you are willing to do the extra work then you can make some extra cash.
If you love cars and are willing to take a chance then you can undoubtedly make a lot of money flipping cars.
What You Need to Know
Know the Laws
Unfortunately, there are limits and laws when it comes to flipping cars. The Government wants its piece of every transaction too, so they regulate how many cars you can sell before having to acquire a dealer’s license.
Each state has its own laws and guidelines that regulate how many cars you can flip. For example, in New York, you can legally sell up to 5 cars per year that are in your name. In Indiana, you can sell up to 12.
Throughout America, 4 is the most common number of cars you’re allowed to sell per year without a license. Make sure you do your research on the rules in your state or general area before you get flipping.
Know the Market
The prices of certain cars and vehicles can vary throughout the nation. A used Ford F-150 might be worth $10,000 in New York, but might only be worth $7,000 in Delaware.
The price may also vary depending on if you live in a city, the suburbs, or a more rural area based on supply and demand.
For example, a pickup truck might be worth more in the country than it would be in the city. A fuel-efficient Toyota Prius is probably worth more in a city compared to the country.
If you want to be a successful car flipper, then you have to know the value of the vehicles in the current market. You don’t want to make a move that is going to end up costing you.
Make sure you do your homework and are well-researched.
Know Your Budget
The best way to make a profit by flipping cars is to create a budget for yourself. You don’t want to overspend and then barely break even, or worse, lose money on a flip.
Creating a budget will ensure that you are monitoring your costs while keeping in mind opportunities for potential profit. This will also make you look for better deals and limit your risk.
Do your homework and figure out how much you can invest into flipping your first car, and continue the process from there. Keep in mind that you’re going to have to put in some TLC in order to turn a profit.
Once you make some money you will be able to take more risks which means potentially making more profit.
What to Look For
When sourcing for potential vehicles you have to study the listings and dissect the important information. There are a lot of dishonest people on the internet so asking important questions is a must.
Cars in High Demand
This is simple economics. Supply and Demand.
If people want a certain vehicle and you have said vehicle then chances are they will buy it. As mentioned earlier, your geographical location plays a huge part in what is in demand. Cities, suburbs, and rural/country areas are all going to have different demands. Weather and logistics will also play a huge part.
Along with this, cars might trend differently from month to month. You can always call a dealership and ask what type of vehicles are best for the area.
Milage and Vehicle History
One of the most important things to look for in a car when attempting to flip it is the milage along with the type of milage.
Vehicles that have lower milage are more likely to sell quicker and less likely to have major issues. People also care if the miles were highway or city miles.
City miles tend to take more of a toll on the body and frame of the car. 50,000 miles in the city is much different from 50,000 miles on a car that was used for commuting on the highway.
Lower miles with a fair price means that a car will usually sell pretty quickly compared to a car with higher miles and a cheap price. Most people don’t want to deal with headaches and just want a reliable vehicle.
If possible, you also may want to get a detailed vehicle history report.
Sites like Carfax can provide information about accident history, registration status, and other banking information.
This is all important information that will help you when flipping cars.
Where to Buy and Sell
Auctions are a great place to find potential vehicles to flip.
Government agencies, businesses, and municipalities will auction off older vehicles that they used that are still in good shape. A lot of the time these vehicles are low-mileage and reliable which makes them perfect to flip.
These auctions also almost always have specialty vehicles that are high in demand. If you know how to bud correctly and know the true value of these vehicles then you can take advantage of the opportunity at hand.
Facebook, Craigslist, or Ebay
Selling cars online has become more and more popular throughout the years.
There are plenty of opportunities to find cars to flip on social platforms. A lot of the time you can find ads that say “need gone today” or “mechanics special.”
These are cars that you can most likely purchase for a bargain, give a little TLC, and then flip for a profit.
You can also take advantage of the advanced search filters that these websites provide in order to find specific vehicles you may be looking for. Sellers are motivated to get rid of their cars with as little headache as possible which leaves an opportunity for you.
You can take the same car you bought on one platform and sell it on another, or even sell it on the same one.
Prepare the Car
Once you buy a car to flip you want to carefully inspect it and properly prepare it so you can turn the most profit.
I would build a relationship with a mechanic you trust and have him inspect the vehicles. If you are constantly bringing him business then he will probably provide you with some type of discount.
A professional will be able to tell you exactly what the vehicle needs and give you adequate advice on what type of cars to look for, along with telling you what to avoid.
Obviously, you want to test drive the car before making the purchase to make sure it is safe.
Once all the mechanic issues are solved, you should get the inside of the car detailed and take high-quality pictures of the inside and out. High-quality pictures will make people take you more seriously and make you feel more trustworthy.
Flipping cars is a great way to make extra money. If you do your homework and put in the work, then you can make a nice chunk of change.