Flipping cars for profit isn’t the easiest business to get into. You need to know a lot of little things about the business, along with knowing a decent amount about cars. But it’s also not the hardest business to learn, and it can come with a pretty hefty profit margin. It can also be one of the fastest ways to make a decent sum of cash. In case you think car flipping might be for you, here’s how to get started.
Where to find cars to flip
You can find many places to find cars to sell. Craigslist, Auto Trader, and local papers are always a good place to start. But one of the best places to find cars consistently is car auctions. There are public, dealer, and government auctions. Public auctions are the ones you will be able to most easily attend. You will often be able to look over the cars thoroughly before they hit the auction lot, so you’ll probably know ahead of time which ones you want to bid on.
What cars to flip
If you know anything about cars, you probably already have a preference as to which cars you like to buy and sell. But if you’ve never done it before, it’s important to do some research into which cars sell best in your area. There are some makes that tend to sell well because of their longevity and gas mileage. These include Honda, Toyota, Hyundai, and Kia.
Buying cars that need repairs
It’s not a bad idea to get in good with a local mechanic who will give you a deal. Because unless you are a mechanic yourself, you won’t know what to do if a car you buy suddenly springs a leak or makes a funny noise. Aside from mechanics, though, it’s good to arm yourself with a little knowledge about how to repair minor dings and scratches. Being able to make minor repairs might help you land some pretty great deals because others aren’t willing to.
What to pay for the cars
Knowing how much to pay for a car is often the most difficult part of the process. But downloading the Kelley Blue Book app will help. The Kelley Blue Book will give you a good estimate of how much a car is worth, factoring in its year and model. But one thing you’ll have to use your own estimation for is mileage and damage. The bottom line is that a car is only worth what someone is willing to pay for it. So be sure to also check the classifieds often to educate yourself on which cars sell the fastest and how much they sell for.
Other things to know
One thing you need to know is how to stay within the law when flipping cars. Each state has its own laws regarding the buying and selling of vehicles. For example, in Colorado, if you plan to sell more than three vehicles in a year, you’re required to apply for a dealer license. But in New York, you are allowed up to five. Another thing you should know as a beginner is that it is always best to start small and simply. For example, specialty or rare cars can sometimes have huge profit potential. But if you don’t know much about them, you could end up in the hole with a car you can’t sell. Also, start out with lower cash range vehicles, even if you have a lot of capital to start with. This will help you make your first few sales more quickly than sitting on an expensive cars for months or years, waiting for the right buyer.