You've Heard of Flipping Houses—What About Flipping Cars?
You’ve probably heard of flipping houses, but what about cars? Could this be your new side hustle?
Written by Katie Dyer
Reviewed by Kathleen Flear
Buying an old, run-down house, gutting some portions, salvaging some parts, updating as much as possible, and quickly turning around and selling it for a profit? Flipping! We have all seen those house-flipping TV shows. But, what about cars? Could you start a side hustle
flipping cars
?Car flipping requires that you do your research
Before getting started in this endeavor, you need to check out the laws in your state. Some states require a dealer’s license if you are buying and selling a certain number of cars a year.
Depending on that number, flipping cars may or may not be profitable for you. If you intend to exceed the maximum number of car sales allowed in your state, you will need to look into getting a dealer’s license. If you intend to make this really profitable, this is likely the best path to take.
Another option is partnering with an existing car dealer, which would be easier at the outset, but you would have to share your profits with that dealer.
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The key ingredients for success
According to
Autolist,
“generally, flipping is done privately without the involvement of a dealership, and the process is relatively quick, and the goal is to buy and sell the vehicle in a short amount of time while making money without putting in too much.”The key is finding vehicles that will sell for the maximum amount, buying them for the minimum, and spending as little as possible before selling them.
To be successful, the first thing to consider is your budget. The main idea of flipping is to buy something with lots of potential for as little money as possible. However, you don’t want to buy a money pit—something cheap but very damaged or broken that will require you to spend more to fix it than it’ll be worth to sell. Get a good handle on your budget and stick to it, especially when you’re just starting out.
The most important thing you need to have when flipping cars successfully is knowledge: knowledge of the market, what customers want, and how much repairs, cleaning, and paint work might cost. What makes a used car most valuable in your area? You need all the information you can get to raise your profit margin.
MORE: Dealerships Are Now Using Venmo and Zelle to Purchase Used Cars
The nitty gritty on car flipping
The top three characteristics of a successful car flip are a good vehicle report, low mileage, and a demand for that type of car. A clean report from CarFax or a similar company and mileage under 100,000 on a vehicle that is widely used in your area are good starting points for car flipping.
The next step is actually purchasing the vehicle. Make sure you understand how to read vehicle listings and know what information you’re seeking. Make, model, year, mileage, price, and any other pertinent information and/or red flags will be important to note as you sift through all the possibilities.
If possible, getting the car inspected by a licensed mechanic, and doing a thorough test drive will help ensure you’re making a good decision on any particular vehicle. After you buy the car, the real work begins! Detailing, paintwork, scratch and dent removal, and vehicle repairs are at the heart of this endeavor.
Having personal knowledge of car repairs and car mechanics would be a huge help here, but isn’t necessarily required. Finding professionals in these areas and building relationships with them will help this process run smoothly.
Who knows? What starts as a side hustle could turn into a full-time job once you get going! Maybe you can even start your own car-flipping television show!
MORE: There's Now A Site That Tracks Dealer Markups
Insurance for those who know
You don’t have to be an expert car flipper to know that saving money on car insurance is always a good idea! Download the
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app, and in about 45 seconds you will have insurance quotes from over 50 big-name insurance providers, plus Jerry will help cancel your old policy right through the app! Now that’s a great idea!
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