Flipping cars has gained a lot of attention over the past few years for its potential to help people find great cars on the resale market and turn a profit. But just how good of a side hustle is it, and what can you expect income-wise?
Make Your Own Hours (and Work)
One of the best things to recommend car flipping as a side hustle is the fact that it is a very flexible endeavor in which you can set your own hours. As long as you arrange a time that works for yourself as well as your client, you can be your own boss on your own time. Having that degree of personal scheduling freedom can certainly feel liberating.
However, on the flip side (pun intended), car flipping isn’t always the most stable of jobs for that very reason. Some days are bound to be far busier than others, and there can be plenty of days when you have no work at all, especially at the start. For that reason, car flipping as a side hustle can almost never become your main job.
Dealing with Taxes
Despite the uncertainty of your car flipping schedule, as the saying goes, “nothing in life is certain but death and taxes.” Determining how you’re going to pay those taxes with car flipping as your side hustle, however, is far less certain. You have to report the income you make from car flipping on your taxes, but because it isn’t a traditional job, it may be challenging to figure out how to report it accurately. Tax codes around the world are an impossible maze of modules and subclauses, so you’ll want to hire an accountant to help you navigate all those twists and turns and tell you how to report your car flipping earnings properly.
How Much Do You Love Cars?
The question says it all. How much you love working with cars will have a huge impact on how you feel about car flipping as a side hustle. If you’re only doing it for the money, you may be sadly disappointed, especially when you’re just starting out and windfall is likely to be small. To succeed at anything in life, you really have to commit yourself to it, and car flipping is no different. On the other hand, committing yourself to something you hate and are only doing for the money is miserable. If you have a passion for cars, the whole endeavor is bound to be a lot less taxing, allowing you to put more of yourself into it and thus have a better chance at succeeding.
Establishing a Clientele
Even if flipping cars is “just” a side hustle for you, it can still be a time-consuming one. Case in point: the amount of time and effort necessary to build up a client base of interested buyers from scratch.
People have a ton of options for buying cars these days. Why should they choose you? Especially if you don’t work for a dealership but are just someone flipping cars as a side hustle.
There are several potential answers to those questions. Maybe your passion and knowledge for cars really shines through. Maybe you have some rare or vintage models that are in high demand. Whatever the underlying reason, you need to use it to motivate people to buy from you. That means posting online, talking to people face to face, and doing whatever you can to spread the word and establish yourself as someone to trust.
That’s a lot of work – so is it really worth it for a mere side hustle?
That obviously depends on your personal motivations, but it is worth noting that establishing a customer base and spreading the word are going to be problems you face in any kind of small business endeavor you undertake. If you seriously want a business of your own, this shouldn’t dissuade you. At the same time, given the lack of sales and scheduling stability, especially at the start, it could be argued that if you’re serious about small business ownership, there are other side hustles you could pursue instead.
Profiting From Flipping Cars
Even if you’re passionate about cars for their own sake, when flipping cars you have one goal – to score a sizable payday. How likely that is and how you can go about doing that will depend on what kinds of cars you’re selling and your approach to flipping.
For example, there is a huge market out there for SUVs and family vehicles. For families that can’t afford expensive SUVs, or simply wish to spend their money elsewhere, flipped ones on the resale market are a huge boon. Targeting those people with SUVs of your own can be a great way to capitalize on a natural market need. These cars are often inexpensive to buy and flip since they typically aren’t too flashy, costing only a few thousand dollars on your end.
At the other end of the spectrum, some people really want luxury or vintage cars. However, new models in the former case may be too expensive for them, while old models in the latter case may be hard to find. Either way, if you can secure and flip luxury or vintage vehicles and find those who are willing to pay for them, you could be in for a huge payday.
The big asterisk next to all of that is that generating profit while flipping cars assumes that you don’t spend more in repair costs than you take in via sales. At the same time, part of the reason you may be able to acquire such vehicles to flip in the first place is that they may be damaged or need new parts. Striking a balance between restoration costs and your profit margins is essential for generating enough profits to make the whole endeavor worthwhile.
As such, while there are definite pros and cons to flipping cars, whether the costs, benefits, effort, and profits involved shake out to something you consider to be a “good” side hustle is ultimately up to you.