If you have already read my simple fool proof strategy to making money selling cars. You will already know my preferred method. No other method works better. But below we will take a closer look at some tried and tested methods I have used over the years.
Remember finding stock is the most important part of the car flipping business. All of the money is made in the buying, if you buy right you just can’t go wrong.
Buying cars at auction
Most traders get their stock form auctions, where cars sell at trade money. The bigger auctions have been attracting private buyers for a number of years now, so you need to be cautious and do your homework. If you are new to auctions it best you visit several before buying, just to get a feel for how auctions work.
Things often happen very fast – most vehicles take just a minute or so to sell. Pay close attention to the auctioneer on each lot, if a fault is declared you cannot later reject the car on the basis of that fault later. It’s easy to be caught out as auctions are often used as clearance houses for problem cars.
This is my leased favourite way of finding cars and is generally a miserable experience. At one point I would visit an auction several times a month. Most are hard work, cold, involve hours of waiting and the cars are often low quality or far from inexpensive. But that being said I have enjoyed some success.
Personally I would avoid large national car auctions like the plague. These are often attended by full-time, highly experienced buyers who attend auctions all over the country. They are also selling and buying at volume so are happy working a small margin.
Buying at this type of auction is often also very time consuming. You need to view the lots, this takes place either on the day of the auction or more often the day(s) before. Yes you can generally view online these days but that has its own and obvious risks. Some auction houses allow for easy returns, others less so.
So my advice would be to always inspect a potential purchase very carefully and in person. Cars are often misdescribed, untidy, incorrectly graded and in generally poor condition. I have lost count of the times I have seen fellow dealers regret an online auction purchase.
Where I have had success is at small local auction houses. Often general auction houses selling furniture and mixed antiques. They from time to time have cars from deceased estates or similar. The competition is normally lower and similar to out preferred way of buying cars you can build a relationship with the Porters or Auctioneers. But as above you still need to do your homework and auctions are still a risky way of finding stock.
The smaller auctions are often a less intimidating experience and offer other money making opportunities. Such as motoring related memorabilia, books and art.
Lastly, don’t get auction fever. Know the value of the car you want to bid for, let yourself a limit, and stick to it!
Reselling cars
This is a very simple strategy. I have done this very successfully, and it’s even employed by franchised dealers from time to time. You simply look for low priced cars advertised in classified ads and resale them at the correct market value.
I have bought all kinds of cars in this way. But the most successes have been with classics in local newspaper adverts. Often the seller is not online or internet savvy. Leaving you an opportunity to market the car online nationally at full market value.
The only real problem with this strategy is its unreliability. I typically buy less than ten cars a year this way. So if you are looking to just flip a few cars, that’s fine. But it’s not a reliable way of making a living.
It also helps if you are an early bird and pick the papers up first thing. My local paper printed its Saturday edition on the Friday. When I discovered this I started picking up a copy up on the Friday evening! Something I still do to this day.
It being the internet age you can also do this on the various online market places. Buying a performance car on say Ebay or Gumtree and remarketing it on a more performance orientated site, such as Pistonheads.com for a premium.
Advertising for cars
Again a very simple strategy, which I have had great success with in the past. You just place an advert and wait for the phone to ring. That’s it! Similarly to the reselling strategy you can buy some great stock this way.
For more than 20 years I have run a daily advert in the main local paper simply saying “cars wanted for car”. This same tactic can work online, with ads on classified sites or using Google Adword to target search results. In recent years I have run targeted ads on Facebook with great results and at very little cost.
But you don’t have to limit you adverts to the normal places. A friend of mine owns a sandwich shop. It’s successful and has a high footfall, so I asked if I could put an advert in the window. He agreed so I had a professional sign made and he placed it in his shop.
That simple sign has made tens of thousands of pounds over the years! The best bit…. he refused to take any payment! I just make sure I get lunch there when I can. You can deploy a similar strategy with business cars on notice boards.
Word of mouth
Let your friends and family know that you’re in the market for cars. If you know the seller checking the vehicle and history is much easier.
Buying trade cars from a local franchised dealers
The easiest way to find quality used car is from you local franchised dealers. I have listed the reasons in the simple fool proof strategy so check that out here if you haven’t already.
The reason you’re local franchised dealers are your best bet is that they have a constant supply of used cars that they need to clear. Every garage has a limited amount of money and space. So most garages have a network of dealer they pass cars on to on a daily basis.
Saving them time and money and avoiding the cost and uncertainty or using auction houses. To start with all you need to do is simply let the salesman and sales managers know your looking for used stock.
Dealer part-exchanges are normally found round the back of the premises. This isn’t because the dealer is ashamed of them its simply because the car may be high mileage or be to old to qualify for the ‘approved used’ program, or simply be over aged stock.
The real advantage of this is that after time you can build a relationship between yourself and the garages you deal with. Allowing the garage to have a reliable cost effective way of shifting their unwanted stock, and giving you the most efficient and cost effective way of acquiring quality stock
Conclusion
There are lots of ways to buy cars, but whichever way you choose it’s important that you establish a steady supply. Without this you are going to find it hard to be successful. If you plan to make car flipping a full time business you really need to nurture a relationship with a franchised dealer, this is the only way you will fine enough consistency good stock at trade money.
What to learn more? We have a great article on which cars you should buy to flip.
