Few luxury assets are more valuable or sought after these days than cars. If you’re able to acquire and flip them, you can make a surprising amount of money – and the path to doing so is easier than you might think.
The first thing you need to know about flipping luxury cars is that it’s surprisingly hard to get new ones. Even if you have enough money to purchase a new Porsche or Ferrari (in which case, congratulations on your fortune), you may not be able to do so because the demand for leading luxury models is so great they’re often given away according to lists. You need to get on this list to get the first run of a new model, and the lists are almost entirely made up of already-existing clients.
If you are somehow astronomically lucky enough to get on this list, flipping your “spot” on this list to someone can prove just as lucrative as flipping luxury cars themselves, if not more so.
Assuming you can’t, however, a big part of that luxury car flipping market is fueled by the ultra-exclusivity created by these lists. If you’ve just “made it” in the world of business with a big promotion or payday and want to celebrate by buying a luxury car, you often can’t buy a new one, so an older model on the car flipping market is the only option.
With that in mind, the more you can sell the luxury cars you have to flip in terms of their exclusivity, the better your chances of flipping them for profit.
Capitalizing on Nostalgia
For decades, people have grown up with the image of luxury cars as the pinnacle of class and cool. The nostalgia born from those decades is a big driver of that enduring idealization of these luxury cars.
People who grew up in or are nostalgic for the 50s and 60s often have strong nostalgia for the luxury vehicles of the 50s and 60s. Strong nostalgia for the 80s and 90s over the past decade from those who grew up in those decades has resulted in iconic Porsche and Lamborghini models from those decades surging back into popularity. Just like their Western counterparts (think images of Farrah Fawcett with a Lamborghini Countach), Bollywood actresses and luxury cars have long gone hand in hand in India.
Knowing the era for which your clientele are nostalgic can help you find the right cars to sell them.
From a purely economic standpoint, luxury vehicles from the 70s and 80s are often the best starting point for those new to flipping luxury cars. These aren’t as rare and thus ultra-expensive as cars from the 50s and early 60s, avoid the costs of being brand-new, and can still be considered “classic.” The prices for these cars are rising, but much slower compared to other models, and they are relatively stable, making them a more dependable candidate for flipping.
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Know Your Clients
To be an effective salesperson in any field you need to know and understand your clients, and this is especially true for flipping luxury cars. Buying a car from anyone is a huge mark of trust. A car is an enormous investment, even without that “luxury” label attached to it. If someone is dropping five, six, even seven figures on a luxury car, they need to be absolutely 100% sure that the person to whom they’re paying that enormous sum is 100% trustworthy. Even beyond that, however, they want to feel like this person “gets” them.
When you spend that much money on a car, you aren’t doing so on the basis of a car’s primary purpose, namely transportation. You can buy cars far less expensive than that. Instead, you’re buying a car for any number of other reasons. Maybe you want to impress someone or prove something to yourself. Maybe nostalgia as mentioned above is a strong factor. Maybe you’ve been an auto junkie your whole life, have dreamed of affording your dream car, and now you can.
Whatever the reason, the motivations for buying luxury cars are highly personal – and so any successful luxury car flipping endeavors have to be built on a deep understanding of clients on the personal level.
That means that you shouldn’t just buy a bunch of vaguely “classic” or “luxury” cars and then hope to sell them to rich people. A person wealthy enough to buy a luxury car has plenty of options from which to choose and the economic means to be choosy. They almost certainly aren’t going to simply buy whatever luxury car is dangled under their nose.
Instead, they are far more likely to either be interested in a very specific era, brand, or type of car. For example, maybe they are only interested in getting a Lamborghini. If so, purchasing a 70s-era Ferrari with the hopes of flipping it later simply isn’t feasible or wise.
All of this means that you either need to try and find clients to match the luxury cars you already have or else to find out what specific clients want in luxury cars and acquire and flip them accordingly.
People aren’t going to spend six to seven figures on a car that’s anything less than pristine. If you have to restore a luxury car that’s new or just a few years old, it’s almost certainly not worth it profit-wise. On the flip side, older cars may be more in need of repairs, and clients may be more understanding of that given their age, but are likewise often more expensive to fix. You thus have to walk an even narrower tightrope than usual balancing repair costs against profit margins. Any car you acquire with the intent to flip that needs repairs had better either only need superficial, inexpensive work, or else had better be super worth it.
Flipping luxury cars is no easy feat, but the rewards for successfully selling even one luxury vehicle can be immense, making it an option too enticing not to try for many interested in the world of car flipping.