How do car dealers and flippers make money? The vast majority of car flippers have a full time job, and simply flip cars as a hobby or on the side. Flipping cars as a side hustle can be very profitable if done correctly. I have seen flippers make tens of thousands of pound extra a year while still holding down full time job.
But after a few years selling cars some flippers may decide to make cars their full time job. If you choose to go full time you can increase and diversify your income by offering additional services.
So how do car dealers make money –
Needless to say car dealers make their primary profits from car sales. With the average mark up on a car in the US is around $2500 and in the UK it is circa £1250. Both these figures are averages and the actually margin a dealer will have in a car can vary massively, and a used car or specialist dealer may work on a higher margin than a large franchised dealer group that has a higher volume of sales.
Valeting and detailing
If you find car valeting enjoyable and you have a eye for detail, then starting a car valeting business could be for you. Assuming you are already valeting the cars you are flipping, you should already have all the skills and equipment to start a valeting business.
You can run a car washing business from a premises or as a mobile service. Alternatively you may just want to valet a car or two a week as additional income, between car flips. With each having pros and cons. However you approach valeting it can be a great sideline and it can lead to bigger things.
Mobile vs static
Mobile setups can be costly, with a van kitted out for valeting costing upwards of £10,000. Most mobile valuators focus on domestic car owners, traveling to customers places of work or homes. Offering a simple car wash service to a full valet and additional services like machine polishing. If you live in an affluent area this kind of business can be very profitable. You can also offer additional services such as pressure cleaning, or specialist boat and plane valeting. But a mobile service can also be time consuming and with ever rising fuel cost increasingly expensive to run.
A static site is more practical if car flipping is going to remain your core focus. If you are already operating from a small shed or garage you can run the business from there. You can also focus the business on offering a commercial service, offering a valeting service to garages can also be beneficial. Allowing you an easier way to meet and build relationships with salesman and managers, who can supply part exchange cars you can flip. Commercial clients are also more reliable, requiring your services year round.
It might also be possible to offer a detailing service to clients looking for more specialised valet, offering a machine policing and ceramic coatings can be hugely profitable. High end car detailing can be a really good market to be in if you live in the right area.
If you want to learn the basics of car valeting we have written a step by step guide – Car valeting a step by step guide.
Marine Valeting
If you live in the right location marine valeting can be big business with boat owners willing to lavish thousands on their pride and joy. Marine valeting doesn’t normally require and additional equipment and in most cases you can charge more. External boat polishing is the most common requested service in my experience and you can charge a health premium to run a machine polisher over the hull of a boat for a hour.
Aviation Valeting
You can also offer the same exact services to plane owners. The big growth in this area is in ceramic coating of surfaces both externally and internally. With aircraft owners looking to protect fabric and leather surfaces as well as improving air friction slightly, which in turn reduces the fuel consumption and increases the speeds.
However you approach valeting it can be a great sideline and it can lead to bigger things.
Selling car parts
Selling car parts can compliment a car flipping business. Flippers often find cars that are none running or beyond economical repair. Some of these cars are suitable to be broken up for spares. You can simply strip the car of any valuable parts and sell the rest of the car for scrap. This can also be a largely passive income source once the parts are listed source of extra income
The two obvious places to sell are eBay and Gumtree. Both offer fantastic opportunity when it comes to selling car parts. But I have had most luck on Gumtree, the listing process is also easier and you don’t have to use Paypal. Most buyers expect to pay cash on collection. The site also focuses on local buyers so competition is reduces. But best of all listings are free for private sellers. You also don’t have to worry about customer ratings or feedback.
You can also list parts on Craigslist or other local classified sites. The UK also has lots of specialised car parts selling websites you can try. It’s also with searching car forums or Facebook groups, if you have specialised or vintage parts and spares.
Watches
Most car salesman and dealers have at least one premium watch. It seems to be a right of passage into the higher levels of the motor trade. Whether it’s an old gold Rolex that’s been taken in part exchange against a Jaguar or a James Bond Omega bought at a boutique watch emporium, most salesman are seen wearing a quality timepiece. The two things just seem to go hand in hand.
But is there more to it than that?
Most salesman working at a garage will have bought a watch after seeing other salesman wearing similar models. Normally they buy one after a good run of sales or with a good bonus. But most dealers and flippers are investing in watches as a side hustle.
The Rolex sport models are the most common investments, closely followed by Omega and TAG. Watches have always been a good investment, but have been especially good over the last decade. It is possible to double your money on a watch in a day if you can pick up the right model at the right time.
If you are offered a watch in part exchange it’s imperative that you get it checked out by someone who knows what they are talking about. You should also avoid anything that hasn’t got its original papers and box. But providing everything checks out it is normally a smart move.
Most dealers are also buying watches brand new from high street dealers and boutique jewellers. Most new models are in high demand and can be flipped the same day or you can hold on to them and make an even more profit over time.
Watches can be sold to offer salesman or traders, to watch dealers or via websites such as Chrono24.
If you do your homework it’s hard to go wrong.
Registration numbers
Trading in car registration numbers can be an excellent side hustle for car flippers. Occasionally you will get a car with and Intresting reg you can flip. But you can also advertise for numbers, buy them from other dealer, auction houses or direct from the DVLA.
They are also a good longterm investment and the market is well established and understood.
We have written an article on trading in munger that you can fine here – How to sell personalised cherished and vanity plates.
Conclusion
Every now and then you will have a slow month flipping cars. There is no rhyme nor reason for this, it just happens. So have an additional income stream is always a good idea. The sidle hustles above are tried and tested and can be highly profitable if set up correctly.
