It’s 2021 and I wanted to go over the fundamentals of car flipping. Buy low and sell high, as fast as you can! This is how to flip cars for fast profits as a side business. With enough time, energy, you can scale up to a full time business, its your choice. Car flipping is defined (by me) as buying cars and selling them quickly.
buy low as possible…
Before your first purchase, you’ll need to decide how much money you want to put toward starting up your car flipping business. Don’t borrow money if you can avoid it. Stick with money you already have. You can literally get started with $1500 or less. OK, let’s take a look at the scenario of buying and flipping a single vehicle, from the beginning (where you spend your money) to the end— where you receive your money and profit.
Know your pricing
Looking for cars to flip is much easier if you know how to quickly compare good and bad deals. I use Kelly Blue Book (they have a great phone app) , and Cargurus.com as my primary source of car valuation. Of course you have Craigslist too. The real value of a vehicle is only determined by what someone else is willing to pay for it. What you’re hoping to do when you study price guides is determine the street value (what someone on the street is willing to pay) of the car. Remember these are all just guides. Your negotiation and people skills (power of persuasion) will greatly affect your car flipping results.
Start with the Popular Cars
The public loves certain cars and models. Honda Accords and CR-V, Toyota Camry and RAV4, Nisan Maxima and Nissan Altima, etc. It may come as a surprise to you, but Toyota Corolla was the top sold vehicle of 2019 in this country. And if you are into trucks, think about Ford F150 series, one of the most popular vehicles in this country for the last 40 years (this will cost you a little more to buy). Vehicle popularity varies from region to region so do a search on what’s popular in your area. Take a strong look at electric vehicles if you are in California. You want to look for vehicles that you can re-sell to cash buyers for $7,000 or less. Once you creep towards $10,000 and higher, these vehicles are more likely to need financing in order to sell them.
It is much easier to attract cash buyers in a lower price range, most people don’t have over $5000 in cash to spend on a vehicle. Cars over $5K typically require loans and financing (that slows down the sale). Less expensive cars will attract buyers who are less concerned about small cosmetic or mechanical blemishes. In my opinion, the best price range to sell a car for and reach a core of cash customers… is $4999-$6999
How to Find Cars to Flip
- Create the “Car Wanted” Ad
A great way to get deals to come to you is to post wanted ads on OfferUp or Craigslist. Just grab a picture off google and use in your ad. An example of wanted ad that I’ve used is below.
AD TITLE:
I will pay top dollar for your Used Car, don’t trade it in!
AD DESCRIPTION:
If you are thinking about trading your car in, don’t do it! Car dealers will only offer you trade-in value or less, which is always way, way below what it’s worth. Sell your car to me instead. I will pay over trade-in value for any vehicle valued at $4500 or less with 175,000 miles or less. Email me the make, mileage, and condition of your vehicle and I’ll send you a cash offer that will beat a dealer’s trade-in price. Let me hear from you is you are serious.
After you receive emails in response to the ad, copy a link to the KBB trade-in value of the vehicle and send it to the seller with an offer above the dealer trade-in price.
Here’s an email template you can use for car flipping. It’s a good idea to include the KBB link in the bottom of the email.
“Hello, Thank you for replying to my ad. I’m definitely interested in buying your car. I’ve posted the KBB trade-in value for your car below. Based on this, your trade-in value is $2800. I’ll offer you $3000 cash and I can buy it today. What do you say “?
You‘ll be surprised how many vehicles you can purchase that would have been trade-ins sold at a dealership that you now own under KBB private sale value.
- Post ads on your Social Media Accounts
If you have a Facebook Account, Instagram or Twitter, use it to your advantage. Just about everyone knows someone who is thinking about buying or selling a car. Use your network. Offer to pay anyone ($50-100) that helps you find a car that you can purchase to flip for profit.
Check the Car out
You’ll want to look the car over inside and out and check for any signs that the car has problems. There’s no way to totally eliminate any possibility of buying cars with problems, but you can certainly lower your risk by spending a lot of time checking it out before buying. If you know nothing about vehicles, don’t worry just make friends with a neighborhood mechanic, or find a mobile mechanic on Craigslist, who will charge you a $100-175
Do Your Due Diligence
~ Check the VIN for stolen cars National Insurance Crime Bureau.
Remember, you can’t assume that the seller’s words are true gold. Though you should make sure you ask as many questions as possible of the seller, it’s ultimately your job to do all of the research and make sure you’re buying a good car. After all, when you sell a bad car it will be your reputation on the line, not the person’s that you bought it from.
Finalizing the Purchase
If you’ve made it this far, money has changed hands, you have the title, and the car is yours. You have accomplished the most important part of the car buying and selling process.
Getting Ready to Sell
Low Cost Repairs
Your vehicle may be in need of minor repair before you list it to sell. Spending $100-$300 on repairs could result in another $400-$1000 on the sale of the vehicle and the fewer the amount of problems that your buyer sees, the more they are going to be willing to pay for your vehicle.
If you are good with your hands, fix the car yourself. Usually you can find private automotive technicians that work from home and offer discounted rates. They will often place an ad on Craigslist and in your local newspaper classifieds.
Maximize Your Profits with a Clean Car
Cleaning your vehicle is one step that you never want to leave out of the selling preparation process. Even if the vehicle isn’t very dirty when you purchase it, clean it anyway. Because this is your buyer’s first impression and people tend to judge a book by its cover, this can have a big impact on the price you can ultimately sell the car for!
Pricing the Car
This is where it all happens. The profits. I like to price the vehicle just over KBB® value to provide a little bit of wiggle room and negotiating margin. For example, if I want to sell a vehicle for $4200 I will list the price of the vehicle as $4599. A buyer may offer $4000 and I can counter with $4199 J.
Always leave negotiating room in your prices. Buyers typically like to feel like they’ve gotten a deal, and if they’re forced to pay your full asking price, they won’t be as excited to make a purchase.
Top 3 Free Places to Flip Your Car:
- Craigslist
- OfferUp/LetGo
- FacebookMarket Place
These three platforms (website/app) are all you really need to market your cars. They are free and you can get a lot of eye balls to your car ads. If you need help in marketing your car flipping business, take a look at my marketing service here.
I recommend that you list basic information about your vehicle in the ad. Don’t try to write a sales page because that will turn buyers off. Just list all of the features with great pictures. With Craigslist you can list you phone number, but with OfferUp/LetGo and Facebook Marketplace potential customers will typically message you first. Since there is a large volume of sellers on Craigslist, make sure to renew your ad at least every other day. Posts that are older than 2 days usually don’t get read, unless someone does a search for a specific model. Craigslist has a policy that prohibits identical re-posts so only use the “renew” option to refresh a post, or write fresh new ads.
Top 3 Paid Place to Flip Your Cars:
If you are selling more expensive vehicles, over $7K, then I suggest you invest in a few paid platforms from which to sell your vehicles. One or two is enough, with the typical ad starting at $25 for 3 weeks or so. Not all buyers are going to be on OfferUp, looking for your vehicles. So the idea of using a paid platform, is you want to put your vehicles in front of more of the people who are most likely to buy them. Think about the fact that people with more money to spend on an item, will tend to go to more of a “high end” store or platform to buy that item.
Negotiate for Profits
Negotiating price while selling is very similar to negotiating price when buying and is an essential part of successful car flipping. Pick a number in your mind that is the lowest price you would be willing to accept, and stick to that number. Your starting price from which to launch your negotiations, should be 10-20% higher than the final price you want of your desired with higher than your reserve, but never go lower than your reserve, unless you just don’t mind.
Close the Sale
Once a deal has been made make sure that you receive the cash in hand before signing ownership over to the buyer and make sure you are very familiar with your state’s regulations on vehicle ownership transfers. If you are ready to get access to the wholesale dealer only auto auctions where you can get cars at even lower costs…click here.
If you need want to get into the Dealer Auctions, License, help getting into the Business of Flipping Cars, give me a call.
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