There are many ways that you can make money in the automobile industry, and one of those ways is by selling vehicles. However, you don’t necessarily have to open your own dealership to make good money selling cars.
Buying and selling used cars demands only a small initial investment, and it’s possible to start making a profit a few weeks after putting your first car up for sale. However, if you want to make money, you have to know how to pick the right vehicles, and how to sell them as well. In this article, we’re going to give you a few tips on how to start selling and buying used cars for profit.
Look at the Legal Side First
If you only want to do this as a one-off thing and don’t intend to do this as an actual business, then there will usually be no need to worry about the legal requirements in your area. However, most jurisdictions will impose a limit on how many cars you can buy and resell recreationally and will demand that you apply for a dealer’s license if you want to continue doing this within the confines of the law. In some cases, you’ll also be required to have an actual place of business and storage for your cars. And you’ll also need to be familiar with the tax requirements in your area as well.
Become Friends with People who Know Cars
Pretty much everyone has a car nut, either in their family or their close circle of friends. Make sure that you approach them and ask them if they want to become partners with you. Having someone who can perform summary inspections on vehicles you’re intending to buy is a great asset and very important when trying to buy any vehicle, especially at auctions.
Knowing how to Buy Used Vehicles
You’ll also have to understand what makes a used vehicle a good deal, and which ones could cause trouble. Not only that, but you’ll have to identify possible steals that might have some issues with them and see if the repairs are worth the investment.
One of the first things you have to look for is the kind of damage the car has suffered. In some cases, damage can be nearly irreversible. For instance, a car that has been severely damaged by rust will be hard or impossible to repair and very difficult to sell. Major components like the transmission or a blown head gasket are usually a death sentence on older vehicles. So unless you have connections with people who can get you these parts for cheap, these are usually not good bets.
It’s also essential that you have the car inspected as well. This is where it pays again to either have a friend who can inspect cars or have a relationship with a mechanic in your area. Ask them if they’re willing to make you a deal after a certain number of inspections. If you bring them consistent business, they’ll most likely be ready to give you a deal and offer you priority.
You should also always make sure that you take the car on a nice test drive. Don’t just drive around the parking lot either. Drive around and do some hard left and right turns. Check if you hear any noise, feel any vibration, and let go of the wheel at times to see if there are alignment issues. And make sure that you can take it on the highway for a brief period as well, to see how the car behaves at high speeds.
Knowing how to buy used cars is really an art and takes some learning and experience. That’s why it’s very important that you do your homework first. If you want to learn more about what you should be looking for when buying a used vehicle, you can read more here.
Knowing which Cars Offer the Best Value
Buying a used car that’s in good shape is one thing, but if nobody will take it off your hand, then all of this is useless. This is why it’s very important to know which vehicles are the hardest and easiest to sell in your area.
Check your local market and see which types of vehicles are the most popular. Do you live in a pickup truck type of place, or are people more into hybrids and crossover SUVs? You also have to know which type of vehicles fetch more on the used vehicle market. This generally has to do with things like durability, longevity, and the price of replacement parts, for instance.
Some car models and brands are known for their reliability while others are known for having tons of recurring issues. For instance, Toyotas and most Japanese car brands are known for building reliable cars that last long, and these cars tend to retain a lot of their value. On the other hand, German cars, while having a lot of value coming off the lot, are often known to have electrical and reliability issues later on. And repairs on these types of vehicles tend to be more expensive as well, which makes them a little bit less attractive on the resell market.
A Word about Auctions
A lot of people who start buying cars for profit are intrigued about car auctions, but they’re not for everyone. Unless you know what you’re doing, auctions can be risky.
For one, you can only buy vehicles based off a visual inspection, which is already a big issue right there. You also have to be careful with which type of auction you attend. Government auctions are usually a better bet, but there will be more competition as well. So, make sure that you’re a seasoned buyer and know how to spot a deal first before you even consider attending an auction.
Buying and selling cars for profit can be a great side business and you can start with only a few bucks. If we were to give you one piece of advice, it would be to start small and start learning the ropes until you become a master at your craft.