After homes, cars are among the most valuable assets most of us own in the course of our lives – and like homes, they’re a prime candidate for flipping. With these easy to remember steps, you can get the jump on the competition and flip cars with the best of them.
This is essential for those new to the car flipping game, and in more ways than one.
For starters, when you’re new to any industry, the losses can feel a lot bigger. You don’t have the reputation or cash flow to cushion setbacks as well. That makes it a bad idea to start with cars that carry big price tags or that cost a lot of money for you to fix up before you sell them off. The most expensive cars in this regard tend to be sports cars and bigger cars.
You’ll instead want to focus on cars with smaller builds that are currently on the resale market for only a few thousand dollars. That will mean the profit margins will be smaller, but so will any losses. Just as it’s a better baseball strategy to string several singles together than swing for the fences every time, new car flippers are better off scoring a bunch of small sales than trying for a big payday right off the bat.
Also, read our take on which cars are the easiest to flip.
Red cars consistently prove to be among the most popular. However, that may be a reason people feel more inclined to keep them (or steal them, with red being the most-stolen car color as well). What’s more, purchasing cars with brighter color schemes may be eye-catching, but it also means that dirt and disfigurements show up far more. That means it takes far more time and resources to clean and fix them up, since nobody’s going to buy a dirty old broken down piece of junk. Instead, you want to go for cars with darker, more conservative colors, such as black, blue, silver, and grey.
This is true of the interior as well as the exterior. An elaborate interior color scheme just means more for you to clean and maintain, and a greater chance of wear and tear showing through.
Gas Versus Electric Versus Hybrids
One of the big things any car buyer today has to decide is what kind of engine they want to invest in for the future. With climate change and peak oil being huge concerns, there is more impetus than ever for car buyers to look at green cars. However, that doesn’t necessarily mean they’re ready to pay significantly more for them. On the contrary, most car buyers will still purchase a traditional gas engine if it means a significantly less expensive price. The eco ethics of such decisions aside, it does potentially deal a blow to any potential plan to flip electric cars at the same rate as traditional ones.
However, all is not lost on the eco-friendly side. Hybrids are an increasingly attractive option for many precisely because they have the ability to switch between these two methods of fuel consumption, allowing people to have their cake and eat it too. What’s more, you’ll want to consider your buyer. Sure, on average, electric cars are a bad bet compared to hybrids or traditional ones, but if you know you’re selling to an eco-conscious individual, they may be far more attracted to such cars.
Automatic gearboxes may have seemed like a good idea, but they just haven’t caught on with users, in part because they can probably sense that (even if they’re not willing to pay extra for them now) electric cars are the future. That makes manual gearboxes the present preferred option on the car flipping market. What’s more, an automatic gearbox can be a lot more expensive to fix – and expense is the last thing anyone is interested in when it comes to buying or selling on the car flipping market. You are thus better off sticking with manual gearboxes while you are starting out until you have a bigger network and more experience.
This should come as no surprise, but the fewer miles on a car, the better. Of course, this is the used car market, so buyers don’t expect cars to be brand-new off the lot. They know that they are getting something with several thousand miles on it at least. That said, you ideally want to make sure that the cars you are selling have fewer than 80,000 miles.
No Big Repairs
We alluded to this above, and it should be obvious, but you need to make sure that the cars you are planning to flip don’t have any big repair needs. You don’t want to spend a lot of money buffing out scratches and dents from the body, replacing the engine or brakes, or dealing with other costly repairs. At least to start with, if a car requires anything more than a new coat of paint or the most minor of fixer-upper actions, you should consider flipping another car.
Have the Service History
How can you make sure that the car in question doesn’t require any big repairs? By acquiring an accurate service history. You’re going to need this anyway when it comes time to flip the car as customers are definitely going to ask about what the car’s been through. You want to be able to answer their questions fully, accurately, and honestly – both for ethical reasons and because it will increase your chances of making a sale. For older cars, recent history matters more than whatever they were up to decades ago. Make sure a car has had all of its necessary safety checks and has no big issues in its service history.
When done properly, flipping a car represents a great chance for you to make a fair amount of money. While there are definite risks involved, if you can make this work sustainable, it could open up a whole new revenue stream and side hustle for you.