Play with cars, and make a living?

You like cars and or like to play with cars.

You also like money and maybe even like playing with it.  The thought of mixing the two has always been in the back of  your mind…. “I could sell cars and make a fortune”  You see these auto dealerships with big fancy buildings, the owners driving 100,000 dollar or more Mercedes and think…wow, I would like to do.  Well you can, but it is not as easy or as flashy as you might think…and to get where you can comfortably pay your bills, takes  a lot of work, a lot of mistakes and some cash.

In most states a private party can sell several cars per year without having to be a licensed dealer.  In Oregon it is 5 cars.  A person can sell up to 5 cars per year without having to get a dealers license.  Do you want a dealers license?  If your going to make this a business, YES you will want one (and getting one will require some upfront cash investment)…but to test the waters, and see if this is something you would like to do, you can initially use our States 5 car rule as a test for minimal cost.

But First do your auto homework

First thing, zero in on a few cars that you have some knowledge of.  That knowledge can come from past experience, or newly acquired research.  To make fun, these cars can be or should be:

  • cars you like
  • cars you think you would like
  • cars you have always wanted to play with

You can buy cars all day long. Every auction I go to, has hundreds of cars, (to thousands) and for the most part they all sell that same day. Many times for more money then I am comfortable paying.  Buying the car is only one part of the success equation, you have to sell it, in order to recoup your money, make your profit, and generate the funds to buy more vehicles.   Your new auto business is a living breathing, growing entity.  And if you don’t have all aspects balanced and working together, it will die.   You can’t just buy, you can’t just sell, they both have to work together.  When you have $5,000 tied up in a car, that money is dead. Until you find a buyer, you really have nothing but a depreciating asset. Certain cars can drop in value by  a hundred dollars per week.  Most cars seem to be taking upwards of 6 to 8 weeks to sell. The potential for what can happen to your profit over 2 months…can be devastating. So buying becomes very important.

Most cars go down in value, right now with gas going up, the little cars are on fire, I have seen a couple models go up $1,500 in the last 4 months. Had you purchased one of the more unfriendly gas mileage cars, it could have easily dropped that same $1,500. So first find a vehicle you know and start watching the ads. See what folks are asking for them. If your really diligent, you can jot down the number and in 6 to 8 weeks, call them back, if it  sold, ask them what it sold for. This is one of the only ways you can get real private party selling values. The online books, are great for a guide, but when it comes to committing your own money, you really want to know what it should sell for.

I tell customers…the number you see online, giving  your vehicles worth, might look great, but try calling Kelley Blue Book and getting the money….naa naa never going to happen. So make sure you have an idea of the sales price before you buy.

  • Finding the car
  • Buying the car
  • Pricing the car
  • Selling the car

First finding the perfect car: ads, drive by’s, or parked cars can be your best bet. One other often overlooked resource is family and friends, Let all your friends and family know what you are looking for, it is like having 2, 3 or 4 other people working for you. If they spot something or know of anyone that has one for sale, they will normally let you know. If you have small publications at work, these are great resources because of limited exposure. Depending on your personality, and energy, you can even cold call on peoples homes if you see a car that hits your target.

Buying the car:   make sure you either have ca$h in hand or a loan lined up at your local credit union. When you find a “Deal” you will want to move fast.   If you have to fool around getting your loan approved, there is a good chance someone else is going to be right behind you with “Green Dollars” to snap it up.

Pricing your car:   Since you already have done your homework and have a feel for the realistic price range, this one shouldn’t be too hard. I always think your best to price vehicles at the top end of the price range to begin with.   The old proverb,  someone once said, you can always come down, a little hard to go up.. One comment I will add here, if you are only buying clean nice vehicles, (I personally think they are the only ones to buy) There is something I call the 10 or 20% buyers. If you have a cream puff vehicle, don’t price it to sell to the 80%. If you price it, so 8 out of 10 buyers that come out will buy it, you have it priced too low. If 8 out of 10 tell you, they can find the same vehicle somewhere else cheaper, and you have done your homework, you wish them well, and wave good bye.   Because there will be 1 or 2 out of 10 that will appreciate the condition, the miles, the cleanliness, and pay you for it. Maybe not thousands but even a hundred or two over the course of a year on 100 to 200 cars makes a big difference.

Selling the car: Before you get to this point, you should get some “Bill of Sales” forms from your local DMV, have all your documents in order filed at home.

I personally use Craigs List as my advertising base.  Free is a very good price…augmented with Autotrader.  There are numerous other outlets, it will be important that you develop a method of marketing the vehicle, you can’t sell them unless a broad group of people know you have them for sale.  I went to a real estate sign outfit and had them make FOR SALE stick on signs with my phone number.  About 1.75″ tall and about 30″ long.  I cut them into two pieces, FOR SALE and the phone number.  When I have a car I am driving that is for sale, I will stick on the rear two windows on both sides.  Free exposure.

When you reach an agreement on selling be ready to make it happen. You do need to be careful. If you can visit the buyers bank or credit union and get the funds directly from them, or a bank check you can call and verify funds, always feels more comfortable. Now days this is an area to be cautious with. Making sure you have real funds before you release the car and your paperwork.

Once you have sold the car…. back to the top of page and start over again….

5 cars should let you know if you want to be a dealer…

And if you do, have fun and good luck….

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