MoneyLife

How To Make Money Buying And Selling Cars

By Kaitlyn Wolf
buy and sell cars

If you have ever wondered how to make money selling cars, it’s smart to start with the basics. You don’t have to be an expert to make some extra cash by buying and selling cars. 

We’ve put together a guide to teach you how to start flipping cars from scratch. From budgeting tricks to basic mechanic tips, there’s a lot to learn. With a little know-how, you can make a profit flipping cars sooner than you think. 

Dealer or casual flipper?

The first step is to decide if you’re going to make a legitimate business out of car flipping. Each state has its own laws regarding how many cars you can flip before you need to obtain an official dealer’s license, which can cost you up to $1,500. If you’re flipping casually, you probably don’t need a permit. Check your local laws and regulations before you start selling. 

Save up funds

If you don’t already have money to invest, you’ll need to start saving up. Start by putting aside money from each paycheck that you earn from your job. You can also use stimulus money, your tax refund, or spare change. Consider speeding up the growth of your bank account with a side hustle, like driving for Uber.  

Set your budget

Research the market so you know what your potential revenue could be on specific cars. Then, create a budget based on the profit you could receive. You’ll want to spend less money flipping the cars you buy than you spend on purchasing the cars because that’s how you’ll make a profit. Stick to your flipping budget, and don’t let emotions get in the way of your set budget when buying, too. 

Evaluating deals

You can find deals on Craigslist, eBay Motors, and Facebook Marketplace. Or you can go to a public auction. The key is to find vehicles with minimal technical issues. Research cars near you to find out how much money used cars are typically sold for to get an idea of how to set your selling prices. You can use KBB or Edmunds to evaluate reasonable prices based on their condition. You can also check out used car rankings online.

Inspection

Conduct a thorough inspection of the interior and exterior of all vehicles before you consider buying them. At auctions, you can usually inspect cars before you bid, but that’s about the extent of it. You can’t test drive the vehicles, so be sure you do your research before you buy. 

Auctions usually provide a “condition grade” on all vehicles. Be sure to get a vehicle inspection report for any car you’re interested in potentially buying. If you’re buying from a private seller, be sure to test drive the vehicle. 

We also recommend inspecting the floorboards, checking window functions, smelling the interior, viewing the upholstery, looking at the undercarriage, ensuring the safety features work, and making sure the engine runs. If you have an affordable mechanic or car-savvy friend, bring them to help you inspect the car. Remember that any damage to the vehicle will negatively impact the selling price.

Understand the buying process

Brush up on your state’s laws and regulations for purchasing used vehicles, especially when buying at an auction. You can get detailed information on what to look for from Edmunds. Before buying a car, make sure you know how to legally transfer the title and registration. Never buy from someone whose name isn’t on the title. 

Check the VIN 

Always run the VIN through NHTSA and NICB databases. These reports will notify you of any safety recalls, stolen vehicle information, or salvaged titles. You should request the Carfax information as well to find out information about prior  accidents and previous owners. Sometimes, private sellers will provide this information unprompted, but it’s still a good idea to do your own research. 

Offer your final price

Once you have an idea of what the vehicle should be priced at, commence your negotiations or bids. Be firm about how much you are willing to spend, and don’t go over your budget. Stay cool and collected at auctions, and don’t allow bidding wars to sway you. 

A large investment on the front-end can cause you to lose money on your flip. There will always be more deals. Gain leverage for negotiations by asking sellers questions that can help you  gauge a sense of urgency and motivation on their end. 

Do basic repairs

Don’t waste your time trying to fix junk cars. Your goal when flipping should be to make fast and easy cash. It helps if you know how to do basic repairs like changing light bulbs, fixing dome lights, and replacing batteries. 

You can find videos on YouTube that can teach you these basic skills. It’s worth taking the time to learn these skills so that you’ll have a general idea of what’s under the hood. That way, you know what you can handle yourself, meaning you’ll spend less overall.

Detailed cleaning

Take the time to make the car shine. A little polishing goes a long way. Make a small investment into an upholstery cleaning machine to use on your flips. Carpet mats are cheap to replace if the current ones are too dirty or torn. You can buy affordable waxing and cleaning products at the Dollar Store, too! 

Take good pictures

Taking pictures in natural daylight is essential to creating quality photos so potential buyers know what to expect. No matter where you take the pictures, just make sure you showcase special features, rims, or anything else that makes the car stand out.

Research the selling price

Spend time researching the selling prices of vehicles so you don’t get scammed. You’ll want to make sure you aren’t overpaying for a car so that you can still turn a profit. You can use KBB or Edmunds for this as well. 

Make a listing

Utilize Facebook Marketplace, Craigslist, eBay Motors, or Offer Up to create a listing for the flipped car. It’s a good idea to put your listing on multiple platforms, too. Be detailed in the descriptions and provide as many pictures as possible. Provide your contact information and get ready to answer a lot of questions from potential buyers. It’s always good to include the Carfax information as well.

Negotiate prices

It’s important to know what your rock bottom price is so you don’t get haggled into selling the car without turning a profit. Conduct negotiations in person rather than over the phone. People are more likely to make in-the-moment decisions in person. 

Prepare the sale documents 

Have all your documents ready to go before showing your vehicle. Gather the Carfax information, the bill of sale, and the title. Being prepared will show professionalism on your end, which will help buyers feel more at ease.

Sign on the dotted line and collect your profit!

After you’ve reached an agreement on the sale price, collect the money. Then, both parties will sign the bill of sale and you will transfer the title over to the buyer. 

Buy and selling cars for profit

Having an additional source of income is a great way to keep more money in your bank account and secure your future. Buying and selling cars is a profitable business that can contribute greatly to your financial standing. And you don’t have to have a ton of experience to get started. With these tips, you could be well on your way to making money selling cars!

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