Flipping houses has become quite the trend, but there’s another way to make money from undervalued assets. You can also flip cars! I’ve spent significant time learning the ins and outs of buying, fixing, and selling old cars. Here, I’ll share a step-by-step guide on how to successfully flip a car. This guide is great if you’re a DIY enthusiast looking to turn your passion into a profitable side project. You’ll learn how to legally flip cars, find undervalued cars in your area, choose the right cars, fix them up without breaking the bank, and sell them for a good profit. Let’s dive in!
First off, understand that flipping cars isn’t as simple as "buy low, sell high". Successful flippers need to know local automotive codes, where to find undervalued cars, and understand the local used car market.
Before getting started, make sure you’re on the right side of the law. If you’re selling cars regularly, your state will require you to register as a dealer. This involves time, paperwork, and can cost upwards of $2,000. If you’re planning to do this casually, getting a dealer license may not be practical. But if you’re serious about this, the economics could work in your favor. Always check with your state motor vehicle registry first.
Next step is finding undervalued cars. Public auctions, Craigslist, eBay, newspaper classifieds, or just around town are all possible places to find these cars. Remember, you’re looking for cars priced well below their fair market value.
You also need to know your used car market. Generally, low-mileage, efficient sedans, wagons, and compact SUVs from mass-market makes are the most "flippable" cars. Depending on your area, you might also find niche opportunities with luxury cars or cars suited to the local geography and climate.
Once you’ve found a car, there’s a checklist to follow. Set your buying budget, get cash, ascertain the car’s fair market value, know how to buy, visually inspect the interior and exterior, pop the hood for inspection, ask how long it’s been sitting, run a VIN check, negotiate a final price (or just bid), and clean the car inside and out.
After buying, it’s time to fix any issues. Diagnose mechanical problems, research symptoms, learn about typical repairs, estimate repair costs and set a budget, get repair quotes, and choose your shop. Avoid nonessential repairs that won’t add to your vehicle’s resale value.
Finally, price your car, list it, and sell it. Use car pricing tools like KBB or Edmunds to determine its fair market value. List your car on appropriate platforms like Craigslist, and create a compelling listing. When dealing with buyers, verify payment, vet and meet buyers, negotiate (or not), and finally close the sale.
Flipping cars for a profit is not easy work, but if you’re ready to get your hands dirty, it can be a rewarding and profitable venture. So go ahead, give it a try and see how it goes!
