Buy and Sell Cars
By Steve Gillman
I have known a number of people who buy and sell cars for
a profit. Some of them were short on cash to invest, and so they
used to come to me to borrow the money necessary. Usually I lent
the money for half of the eventual profit, rather than charging
interest. In case you missed that, this is suggesting a way you
can buy and sell cars starting with no money of your own.
In most states you can buy and sell a few cars without needing
a dealer's license. When I lived in Michigan, for example, the
law allowed for up to six transactions annually. If you put six
cars in your name and your wife did the same you might get to
sell up to 12 without a license (but I am not recommending this--once
you sell more than 6 you should probably just get the license
and do it properly).
What do you need to know to make this work? You need an eye
for value, or a willingness to study and proceed cautiously.
If, for example, you know that a given pickup truck should sell
easily for $4,000 when cleaned up, you just offer a lot less
than that. I always liked to buy at a price which made it a safe
deal even if the transmission needed major work before the car
was sold. In other words, paying at least $1,000 less than the
expected sales price is the most you want to pay.
If you are mechanically inclined you might do well looking
for cars that have problems you can easily fix. Otherwise just
look to buy at the best price you can get that will work, and
plan to clean the car inside and out.
How Much Can You Make?
I have seen cars that were bought for $3,000 sell for $7,000.
I have sold cars several times for $900 to $1,000 more than what
we paid (which meant my cut was $450 to $500 since I was just
putting up the cash and letting my partner do all the work).
Ways to Make More | Related Opportunities
| Tips
To make more money, look for better buys and sell them faster
so you can get going on the next project. It has never taken
more than a couple weeks to turn a car around when I have invested,
and it can be done in a matter of days. If you really need to
make the money this week, invest in a type of car that is popular
and at a price point where they turn over fast (this is commonly
$2,000 to $4,000 retail).
If you do not have a good idea of values, use a price guide
(many are online now). Pay less than the "wholesale price"
if you want to be really safe. Some of these supposed sales price
guides show unrealistically high prices. Assume you will be selling
for several hundred dollars less than the retail price shown
in the guides.
Qualifications / Requirements
In many states you need a driver's license to even buy a car
(although if you don;t have one you can always get a partner).
You also will need to have insurance for the car. You can
buy a policy and then cancel it after selling the vehicle, and
you'll get a prorated refund on the balance. Unless you have
a poor driving record the cost of insuring the car for a couple
weeks should be less than $50.
First Steps
If you do not already know what cars are worth (and even if
you think you do), get a used car price guide. Then start looking
for cars for sale online, in newspapers, and by driving around.
Resource
Edmunds
- They have a decent online used car price guide here.
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