By: Dannie Phan | August 27th, 2020
If you’re looking to turn your passion for cars into a side hustle and extra cash, you have to try flipping cars for money. Not only will you have fun doing it, but you also stand a good chance of making a pretty penny. Plus, you don’t have to do this full-time; a dozen hours a month will be more than enough. Don’t worry, the car flipping business model doesn’t have to be complicated; it’s why we’re here: to make it as accessible as possible.
Is There Money in Flipping Cars?
Lots of buyers prefer to do business with a private seller, avoiding the dealership and pushy car dealer altogether. There’s a good profit margin for those who put in the effort to sell cars.
What Are the Best Cars to Flip for Profit?
Expensive, exotic, and classic cars always sell for good margins. However, they’re a risky investment for a first-time car flipper.
Believe it or not, older, cheaper cars are your safest investment choice. They’re affordable, in-demand, and buyers (for instance, a college student looking for a first car) are quick to make a purchase.
Wait, Is Flipping Cars for a Profit Legal?
Yes, reselling flip cars is legal, but that’s no excuse to not research state laws.
In California, for instance, you can only sell up to five cars a year. That’s regardless of the sale price and whether it’s a new or used car. That’s good enough for most flippers, especially if they’re doing it part-time. But if you want to go over that limit, you must get a dealer’s license.
How to Start a Car Flipping Side Hustle
Let’s get down to business: how can you get extra cash flipping cars without sinking a lot of time into it?
Set a Buying Budget
Start by setting a price range to spend on a used car. Remember, do not spend money you don’t have. It doesn’t have to be much, to start with. Putting between $500 and $2000 aside is a good idea.
Choose the Perfect Car to Flip
Now the hunt begins. Look on eBay, Edmund’s, Facebook Marketplace, Craigslist, and at the newspaper classifieds for a good deal. It could also be a good idea to check out car auctions, public auctions, and auto auctions.
Our top tip is to set alerts for when the sale price of a listing goes down. For instance, get the CPro app on your smartphone and check it often until you find what you want. Google can also be your friend.
You don’t need much know-how, just time, perseverance, and patience.
Make Your Move
Once you see a good car for an asking price that’s worth it, act on it ASAP. Check Kelley Blue Book (KBB) to ensure you’re getting a lower price than market value.
Reach out to the private party to meet up and discuss the transaction. Asking for a test drive and even taking a mechanic with you to ensure the car is in great shape are wise moves.
Revamping Used Cars the Right Way
Now that you’ve secured a used car, it’s time to flip it.
Do Minor Mechanic and Cosmetic Repairs
When you get minor repairs done, you’ll be able to ask for a higher price. You can do it yourself if you have the know-how, but you can also get a local mechanic to do it for you.
Get It Cleaned Up
Similarly, a squeaky clean car fetches a higher market value. Make sure the inside and outside are spotless. You can buy replacement mats and seat covers at Walmart for a good price if need be.
Get a Car History Report
When buying through a private party, it’s good to get a car history report. This will let you ask buyers for more money. Carfax is a reliable company you can use to do it.
How and Where to Sell a Flipped Car
Finally, take advantage of your “buy low, sell high” business model. It’s all about knowing where to advertise—and how to negotiate.
Price Your Flipped Car Properly
Use KBB to see the price range the car you’re selling usually goes for. Then, set your asking price a little above it. This way, when buyers try to lower this higher price, you’ll get what you need and they’ll feel like they got a bargain. Win-win.
Post Ads Until You Get a Buyer
Post an ad on Craigslist, CPro, Facebook Marketplace, and local bulletin boards for your flipped, used car. Write a catchy, enticing, and detailed ad description (but beware of sounding like a scam!). Include the manufacturer (Toyota, Honda, Ford…), type (truck, SUV…), and wear.
Then, wait until the offers come rolling in!
Closing the Deal
Don’t skip on the last step. To sell your flipped car legally, you must go to the DMV’s website to know what paperwork you’ll need. Usually, you’ll need to give the buyer a bill of sale, the vehicle’s title, and more—but this depends from state to state.
It won’t cost you any extra cash and will give you the ease of mind you need.
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