When most people attend a salvage dealer auction, it’s to pick up an affordable vehicle they can drive around on a regular basis. However, if you know what you’re doing, you can actually use these auctions for an income.
Flipping Cars for Money
The way this works is very, very simple. You’re going to purchase an affordable vehicle from a salvage dealer auction, then sell it to someone else for a profit.
Now, as you might imagine, this is easier said than done. However, this should give you the general idea.
Understand Your State’s Rules
One thing we should point out before you even attend a single salvage dealer auction is that you should look into your state’s regulations when it comes to “flipping” vehicles.
To be clear: doing so is 100% legal.
It’s just that, at a certain point, your state will consider you an auto dealer if you continually sell vehicles over and over. This will require licensing to continue doing.
For many people, it’s worth it. Generally, it’s around $2,000 a year. If you flip enough vehicles, especially the ones you can buy for cheap at a salvage dealer auction, you’re not going to have much of an issue covering that initial investment.
Still, this is something to think about before you begin. Don’t go flipping multiple vehicles until you know how your state will view this.
The good thing about focusing this business plan on only selecting salvage dealer auction vehicles is that you don’t need a huge budget.
When you’re first starting out, don’t spend more than $2,000 on a car. In fact, you should probably stick to the $500 to $1,000 range.
This way, you’ll feel a lot less pressure on your first deal. That will allow you to make better business decisions, as well.
Don’t Estimate the Price
Unless you’re a veteran of the automobile world, don’t ever assume you know how much you can get for a vehicle. Even if you are, it’s probably not a good idea. Always look up the amount on your computer. If you’re going to an actual auction in person, use the Kelley Blue Book app. It’s free and the best possible source for this kind of information.
Stick to Common Vehicles
Unless you have some kind of expertise with a certain type of vehicle and a lot of time to spend waiting on customers, don’t flip specialty cars. Stick to popular models, as that will attract the most attention from potential buyers.
Head to Craigslist
There are all kinds of ways you can market your vehicles for sale. However, no matter where you live, one source for customers that you can always rely on is Craigslist.
You can also put out the word in your social group that anyone who recommends a buyer that turns into a successful sale gets $50.
While there will definitely be a learning curve, people all over the country make money from flipping cars this way. If you take the time to learn how to do minor repairs, you could easily be sitting on a full-time income.