In 2002 I had no cash but required a new auto badly. I spent months researching car auctions and eventually discovered a couple of in my region. I bought a 1997 Jeep Cherokee with 90k miles for 00. There was an virtually identical model on ebay with a beginning bid of k. Then I saw the opportunity to make some income from this venture… So a month later I bought a 1999 Impala with 40k miles for ,300 and sold it 2 weeks later on Craigslist for ,900. Following that I was hooked. Now I’m flipping over 10 cars a month for about 00 profit every single.
Of late I have been receiving several phone calls and even emails from everybody wanting to know how earn some extra income by acquiring and selling cars, so I’ve put together this guide on how to get started (check out my web site for a lot more).
Just like any other enterprise, generating money getting and selling cars is not necessarily as easy as 1 would believe and it can not be explained by way of a phone call or even by an e-mail. I could fill 1000 pages with suggestions, tricks and strategies for successfully buying at auto auctions and I some point I may…but for now I can provide some key points for finding began and answer some of the bigger questions out there.
I’ve bought a lot of the ebooks out there and they all gave great ideas on how to obtain at car auctions but that was all. I was paying – for a guide that didn’t actually list any of the auctions that I really should be getting at. So I began compiling a list of list of each and every single vehicle auction by state and agency…(on my web site).
What produced me to decide on this business:
The principal and critical reason I chose this business I was looking for a way to create sustainable passive income. There are so several wonderful deals at so many auctions but the vast majority of the population will in no way know.
I also know that car market is Enormous. Virtually everybody who owns a automobile these days buys a various vehicle every single five years or so. There is totally no question on the size of the vehicle market and demand for customers. There is often demand for a excellent deal on a excellent vehicle – even if it is not 1 that you would drive, just don’t forget, someone will pay for it. One good thing about a tough economy is that a lot of folks will be searching somebody who can give them a great deal on a car.
The first step is to discover a list of auctions in your area. A lot of counties have police auctions every month. Note – some of these auctions demand a dealer’s license so you’ll want to check for that ahead of time. (Uncover a list at www.officialgovernmentgrants.com)
When you uncover an auction, get a bid-list of the vehicles up for auction. For example, at a recent auction in my region there had been three cars that got my interest:
- 2001 black Honda Accord with a little over 37k miles on it.
- 2003 white Chevy Impala with 90k miles on it.
- 2003 grey Ford F-150 pickup with 67k miles on it.
All three of these cars are well-known models with under 100k miles and great colors (though I’m not crazy about the white Impala, it’s really a fairly well-liked color).
There’s quite little information other than the picture. The Impala and the F150 had been most likely government vehicles and the Honda was possibly a seizure (in the photo it also looks like there had been some ‘ground effects’ modifications – almost certainly a drug dealer).
The Impala has almost 100k miles on it but the good news is that government vehicles are usually quite nicely maintained which should assist them sell quicker. These are all prime examples of very good cars to attempt and buy at auction.
Now, we will need to figure out how significantly to bid on every single of these. At this point it is worth it to discuss some of the various auction formats. A lot of government auctions are ‘sealed bid’ which means you submit a bid along with other folks without seeing what their bids are. Then, the highest bid wins. These auctions are tougher for obvious reasons.
The other kind of auction are what’s identified as the standard ‘dutch auction’ in which the bid starts out at a certain cost and numerous bidders provide greater prices until the automobile is sold. Unfortunately, this auction is a ‘sealed bid’ auction so I’ll have to truly do my homework.
The trick with ‘sealed bid’ auctions is that you have to submit a bid that’s low sufficient to make a profit but high sufficient to win the automobile. In recent years, particular auctions have turn into far more common with what I call the ‘amateur buyer’. These are the folks that bid more than the car is actually worth. They win the automobile but they take a perfectly good income producing opportunity away from you in the process.
Usually, for a ‘sealed bid’ auction I begin with the Kelley Blue Book value to get a general thought of the cost. Keep in mind – this is actually just a fast starting point. What you truly want to know is what the dealers are paying for these vehicles. Dealers are paying a cost to make a profit – and that’s what you want to be paying…due to the fact that means you’ll be producing a decent profit.
How do you find this out? Call the loan department of a local bank and ask for the Manheim Market Report (MMR) price. Most banks have subscriptions to this data which will tell you the average costs that comparable vehicles have been selling for at auctions.
So for the three cars that I’m interested in I get the following MMR prices:
2001 black Honda Accord EX with 37k miles: ,630
2003 white Chevy Impala with 90k miles: ,950
2003 grey Ford F-150 pickup with 67k:,100
Now considering that the Honda Accord is such a common model and this one is not a ‘public’ vehicle and looks like it’s had some upgrades (ground effects) – this vehicle will most likely receive bids in the 00 range. A quick look at ebay motors, http://cars.com or craigslist tells me that at that cost I won’t be generating a profit. I submit a bid of 00 anyway.
The Impala looks like my best bet at making a profit. Even though it does have 90k miles on it, that’s still under the critical 100k threshold and since this is a ‘public’ vehicle it’s most likely in extremely good condition and will not be acquiring as a lot interest as the Honda Accord. And – there is constantly demand for Impalas think it or not. These are excellent ‘functional’ vehicles for men and women looking for low cost – dependable transportation. I don’t locate any similar comps on Craigslist but a fast check on Ebay motors and http://autotrader.com shows several comps selling between 2.5k-4k. This is wonderful news. I put in a bid of ,500. If I can get my bid filled and then sell it for 3k then I’ve made an straightforward ,400 (There’s a buyers premium of between 6%-10% at all these auctions).
The 2003 F-150 also looks like a decent cash-maker if I can get it for a excellent cost. Autotrader and Ebay show comps between 6k-10k. I put in a bid of 4k for this one.
The 1 good factor about ‘sealed bid’ auctions is that I know emotion won’t force me to bid far more than I want to. I’ve already determined my ideal acquisition cost and submitted the bid. Now all I have to do is wait and see if I get ‘lucky’.
One thing I didn’t go over is on website inspection. The auction web site is necessary to tell you if they know of any issues with the vehicle (i.e. transmission was replaced, etc.). Also, they usually set aside a day on a weekend to visit the cars and visually inspect them – you can’t turn on the engine or get inside but you can look for any exterior indicators of damage. Also, the auction web site will have each vehicles VIN number. Since the auction costs for these 3 are fairly low and the Impala and F150 are ‘government’ vehicles, I’m forgoing the inspection method. Note: I do not recommend performing no due diligence…particularly when you’re getting began. But, as soon as you’re comfy with the method and have bought and sold a few cars you’ll know the level of due diligence that need to be accomplished.
One last issue is whether or not you will need a Dealer’s license to resell these cars. The rules differ by state. For example, in Florida it is 3,in New York it is 6, in Ohio it is 5, etc. A lot of folks get around this by selling some in a spouse’s name or a brother’s, parent’s, whatever.
The bottom line is you can quickly sell a dozen or so cars just before you’re forced to get a dealer’s license, if at all.
Nicely, hopefully this has helped discover a small bit about how to make a couple of thousand dollars at your local auto auctions. For me it started as a search for a new auto and now it’s replaced my day job. All it takes is a small time and analysis… www.OfficialGovernmentGrants.com is a very good resource to commence…