To earn some money from used cars, you don't have to be a mechanic. In fact, for the most part, people can buy cars and sell them for a profit of several hundred dollars on each one because they know how to get a good deal, which is easier than you might think. The most important thing to keep in mind is that money is earned when you buy the car, not when you sell it. Therefore, your top priority should be to get a good deal. You can almost always resell the car quickly and profitably with a little effort and smart negotiation.
Steps
Method 1 of 3: Shop Cars Effectively
Step 1. Look for owners who sell their own cars on auctions, classifieds, and websites like eBay and Craigslist
Car dealers tend to sell cars at their highest price, so you will rarely be able to buy one of these cars and sell it for a profit. However, regular folks are not required to pay for employees or a large amount in rent, so they can afford to dispose of their used cars at a much lower price than would be affordable for a dealer. For best results, limit your search to these types of sellers.
- Don't let the "salvage vehicles" put you off right away. These usually make up some of the best deals on the market. However, you should look into the reasons why it was awarded the title of "salvage" vehicle, as there is a big difference between a broken axle and a broken window, although both could cause the vehicle to be considered as such.
- A good way to get a cheap vehicle background for your most prominent purchases is to search Carfax (if you live in the US) and other types of title review websites.
Step 2. Get a good idea of the base price from appraisal websites
If you live in the US, for example, you can enter the make, model, year, and condition of your car on websites like Edmunds and the Kelly Blue Book to determine the overall price. This often serves as a good starting point for negotiations, plus you can use it to effectively bargain in cases where someone greatly overestimates the price. Also, these websites often include ratings by which you can tell if a car has common problems that you should pay attention to or if there is a record of its reliability. Here are some tips to get the most out of websites like this:
- Take the "dealer price" into account. Because both you and the seller will have to deal with much less paperwork, you could haggle down to the price the seller would charge a car dealer.
- Check more than one website at a time, assuming at all times that the car will look worse than it appears, since, for the most part, people will try to sell the car for the highest price they can find online and choose to present it in the ad in better condition than it is.
Step 3. Always start the car when the engine is cold
You must be careful in case you come across a car whose engine is already running. Starting a cold car takes the most energy and momentum, and often when starting a bad engine you'll be able to hear or sense if there is a problem. You should pay attention to the following:
- a car that doesn't start easily or smoothly
- loud noises or screeching from the engine
- ticking, grinding, or jerking noises as the car is started
Step 4. Check the level and color of the oil
In doing so, you should ask questions about the car's history (like the last time the oil was changed, to begin with). The lighter the oil, the better, and it should never be a dark brown or mud-like color, particularly if the oil has been changed in the last six months. You should not proceed with the purchase if the oil contains water or solid pieces (such as metal), since the repairs will cost you a lot.
Ask the seller to rev the engine 5-6 times and pay attention to the exhaust pipe. If the smoke it produces is black or dense, you should not proceed with the purchase either, especially if it also has a low oil level
Step 5. Check for leaks under the car after it has been running for a while
Expect some water to seep in, but oil and radiator fluid shouldn't seep in, and in these cases you probably shouldn't buy the car. Another good alternative to have it checked is to have someone rev the engine after removing the radiator cap. If you notice air bubbles in the radiator when revving the engine, you should not buy the car, as the cylinder head gasket is likely melted.
Does the engine have a high temperature? If so, and hot water is also dripping from the car (but not dripping liquid or oil), you could get a bargain, as the overheating could simply be due to leaks in the frame. This means that an expensive-looking problem could be fixed at a cheap price
Step 6. Open the hood and watch and listen to the engine
It should not produce loud ticking or gurgling sounds. Also, when something doesn't sound quite right, it's usually pretty obvious. Have someone rev the engine while the car is in neutral and make sure it continues to sound good as you check it for any problems. Turn off the car and check the belts and hoses for corroded, rusted, or excessively deteriorated. 1-2 belts and hoses are easy to repair, but the profit you were hoping for could be wiped out if you have to do a full repair.
Step 7. Drive the car before you buy it, if possible
You may be able to buy a non-working car cheaply if you are really a bargain hunter, have certain mechanical skills, and think you can make it work. However, in all other circumstances, you must drive the car and test it at various speeds and variations. The ideal is to test it in a neighborhood and also on a highway or highway where you can increase your speed in a safe way. This is what you should pay close attention to when testing the car:
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Driving:
Is it fluid and responsive?
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The breaks:
Do you stop the car quickly, especially in situations where you have to stop quickly? Most importantly, can the car stop in a straight line?
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The broadcast:
Does it change fluently? If the car is automatic, you should be able to put it in gear D and in reverse in less than a second and a half. If this takes longer, it might not be a good sign.
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Electronic devices and features:
Do the lights, windows and air conditioning work? Is the odometer still running or is it stuck? In the latter case, do you know how long it has been like this?
Step 8. Lower the price based on all the defects you notice
This is essential especially if the ad for the car did not mention these defects. For the most part, people are honest and upfront about potential car problems. However, you should be constantly aware of other problems that can serve as a tool to negotiate. If you encounter minor to serious problems that you haven't been told about but that you know you can fix at a cheap price, you will often be able to get deep discounts.
- Point out problems as you find them by examining the car. For the most part, people will trust a calm and thorough buyer if you explain each of your tests and each problem to them. This will increase the likelihood that they will accept your proposed price.
- Also evaluate the knowledge that the seller has about the cars. If you don't seem to know what to do with an engine, you can take advantage of that to exaggerate any perceived problems.
Step 9. Make sure you receive the title and a copy of the car registration
If the seller does not have the title on hand, you should think twice before buying the car, since, to register it (and, later, to obtain insurance) it will be necessary to have the title. You want to make sure the car is worth enough to give you the job of obtaining a new title if the seller cannot provide it.
For more expensive cars, you can get the title history from websites like CarFax (if you live in the US). In this way, you will avoid unpleasant surprises
Method 2 of 3: Sell cars at their highest price
Step 1. Determine what the lowest possible price is and what price you are targeting before putting the car up for sale
Set a reasonable price using the same appraisal websites you used when buying the car, and search for buyers in your area using Craigslist and local ads. In case it is not necessary to sell the car fast, you can start with a relatively high price. However, if you want to sell it fast, you need to keep the price low and mention that you will stand your ground on it.
- People will still want to negotiate even if you say you will stick with the price.
- Use the phrase OMO ("or best offer") to indicate that you are willing to negotiate the price. This is a good way to convince people to contact you.
- If the car is priced high or is a rare item, you could make a bigger profit at an auction than a direct sale. Of course, you should keep in mind that auctions involve some risk, since you can win much more than you expected but also much less.
Step 2. Have a mechanic check the car and fix any problems you have (as long as it is cheap enough to make a profit by reselling it)
For this reason, you should set your sales price at an early stage, as it is obvious that it will not be worth repairing if the cost will make the car cost more than the amount you can sell it for. However, if you get a cheap car that is also relatively cheap to repair, you can charge more than the price of the repairs. Buying a car that needs to be repaired could be risky, but if you're a smart shopper, you can make big profits for small problems that the original seller didn't want to fix.
- Be sure to search online to determine if the car has any common problems. Is there anything you can do to convince potential buyers that you have fixed the problem?
- What can you repair yourself? You can find pages of tips online for home repairs for old cars, and more of these repairs than you might imagine are feasible for a home mechanic.
Step 3. Clean the car as much as possible
It is much easier to sell a clean car, especially at a higher price. It also costs nothing to vacuum or clean the windows, but this could make the difference between a closed sale and a lost one. Make sure to do the following:
- Wipe all surfaces with a clean cloth.
- Vacuum all surfaces, including under and around rugs.
- Wash and rinse the exterior, including the hubcaps (consider applying a coat of wax to give higher priced cars a clean shine).
Step 4. Show buyers all obvious flaws and include these flaws in the ad as well
If a buyer knows in advance what the problems are and contacts you anyway, they will not be able to use them to haggle the price. However, if you run into issues that you didn't mention, this will give you some tools with which to negotiate. While it might seem like being honest up front is synonymous with admitting it's a bad deal, all this will do is attract buyers who are serious about buying. You could make a few minor issues go unnoticed by a buyer, but generally, people will pay more to a seller whom they consider to be honest and trustworthy.
Make sure to provide a large number of photos, especially of the problem parts you have observed (such as a tear in the seat). This will build trust and prevent buyers from worrying about potential defects
Step 5. Instantly increase the price by changing the oil, radiator fluid and windshield washer fluid if necessary
This is a cheap way to fix the car and raise the price (unless the seller has done so recently). Buyers will like to know that they don't have to worry about these annoyances and will usually be willing to pay a little more, so don't forget to mention these fixes in the ad.
- You should also mention the status of the registration. If this is about to expire, buyers will need to pay $ 100 or more (as applicable) to re-register and could use this to haggle.
- Consider the specific requirements of where you live. For example, in California, smog tests must be done. You can usually charge more than the cost of the test if you do it ahead of time, since buyers won't have to go through the hassle of paying for a smog test.
Method 3 of 3: Maximize Your Profits
Step 1. Monitor the sale price of other cars (even if you are not interested in buying them at the moment)
For example, imagine a clean 1987 BMW e30 sells for $ 2,500 at auction. This is too high a price to buy and sell the car for a profit, but this way, you will know that later on, a similar car with a sales price of $ 1,500 could be a good investment. Also, when you sell that car, you could easily set the sale price to $ 2,000 or more, since you know that someone will pay that price.
- You can get a good idea of the prices of various cars by checking out or browsing auctions and car sales shows.
- Check car appraisal websites and newspapers regularly for car deals, even if you don't want to buy one. Your mind will become more alert in the field of sales the more cars and prices you observe.
Step 2. Look for buyers and sellers who want to make quick transactions without much fuss
When dealing with people who want to make a profit, both you and they will fight every last penny. However, it will be much easier to negotiate with sellers who simply want to get rid of a car or with buyers who are looking for a car without much hassle in which they can be transported.
- When buying a car, you should pay attention to phrases like "get rid of", "I need to make a quick buck" or something else that indicates that someone wants to get rid of a car regardless of price.
- When selling a car, you should pay attention to those who move quickly and who get excited without ever having seen the car. Be careful to ask them why they want the car, as this could inform you of their financial situation. Desperation is an indicator of a good offer.
Step 3. Haggle like a shark
Car buying and selling is not for the weak. In order to earn money in this area, you must learn to negotiate. Everyone has their own different strategies, but the best overall principle is to be honest with yourself beforehand. You should ask yourself two questions: how much do you want to pay for the car, ideally? And what is the maximum price you are willing to pay? You should start trading at a price slightly below the first figure and slowly work your way to the second.
- Be honest with the seller. For example: "I can only sell (or buy) this car for $ 1200. Can you come up with that price?" If not, you can withdraw.
- You should always have cash on hand and ask potential buyers for the same. If you can pay on the spot, you can often get the seller to lower the price so everyone can avoid the hassle of having to meet again.
- Don't react emotionally. The only reason you will buy the car is for the money. If you don't get the price you planned earlier, walk away.
Step 4. Take a friend with you, especially if they have some knowledge about cars
If you have a friend who knows how to handle a wrench, two heads are better than one, so taking it with you will pay off. While not everyone knows everything about cars, this doesn't mean you can't make a profit anyway. You can ask your friend to rev the engine, observe the car as you drive it as a test, or inspect the engine and point out small defects that you might have missed.
- Taking a friend with you for online sales is generally a good idea for your safety.
- You should always meet other people in public places.
Step 5. Feel free to walk away and come back later to get a better price
Unless you are completely confident that a car is a bargain, you can put down your phone and ask the seller to call you regarding the sale. You should keep in mind that the sole purpose of these cars is to make money, so you should not get too emotionally involved if someone else buys it while you were playing hard. If you really want to get a good price, it helps to wait 2-3 days to determine how seriously the seller is taking it, as well as to determine the condition of the car in general. You can almost always ask the seller to discount between 10 and 25% of the price if the car does not sell after several days.
Step 6. Trust your instincts when dealing with buyers and sellers
There's nothing wrong with walking away if a car doesn't seem like the right fit or if you think the offer is suspicious. At any given moment, you can find hundreds of used cars for sale. Also, your goal is to make a profit, not take excessive risks. In case you are concerned that someone is taking advantage of you or is ignoring the whole story, you should trust your instincts and walk away. You can always get more offers later.