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Buying and Selling Used Vehicles

About:
Today, with people dropping the same amount of money on a new car as they could have spent on a down payment for a cheaper house, consumers truly realize the importance of investing in lower-priced used cars. With swarms of buyers entering the used vehicle market every year, a wealth of opportunities exist for anyone who is looking for extra income, or a new and lucrative full-time career.  The key to making money in this business is to buy low, and sell at a huge profit - buy low, sell high! Let's take a look at how you can get the ball rolling on this!

OPERATING YOUR OWN USED CAR BUSINESS

The goal of many people is just to make a little extra income. If you consider $1,000 to $3,500 or more for a single sale in one month to be "extra income," you could easily make that without too much extra effort on your part (yes, you will have to exert some extra effort - nothing's free, especially when it comes to generating money!).

On the other hand, you may be one of those people who want to be their own boss. While it's true that the risks are often greater than if you just worked for someone else, it's just as true that risks and rewards go hand in hand. If you're willing to take the plunge, the potential returns are also greater.  If you have a bit of an adventuresome spirit and confidence in your own skills and abilities, operating your own used car business may be the ideal way for you to make big, big money!

ADVANTAGES OF OWNING YOUR OWN BUSINESS

The opportunity to express your own ideas and do things exactly as you want is among the primary advantages of operating your own business. The challenge and excitement of running your own operation also ranks high on the list. Another big advantage is that you will receive all the profits generated by your time and efforts. Then the potential exists to develop a part-time business into a full-time career that produces an income you never thought possible.

SKILLS & ABILITIES NEEDED

The same type of personal skills that are necessary to successfully work for someone else are also required to be successful in working for yourself. Personal skills would involve being conscientious, dedicated, determined, and persistent, in addition to possessing good human relations abilities.

There is also another type of skill that is necessary that involves the ability to manage and organize your activities, and possibly those of others if you hire car salespeople to work for you, depending on how large of a scale you wind up taking your operation.

This skill should be taken very seriously, because it is these skills that can cause one business to be a huge  success while the other is a total failure.

Lastly, you will need technical skills.  These are the skills that include the knowledge to perform the activities involved in the used car business. It is this combination of technical, personal, and management skills that will make your operation successful.

GETTING YOUR USED CAR BUSINESS ESTABLISHED

Whether you are operating your business on a part-time basis, people will expect you to provide the type of service any consumer expects. They will also associate the type of service they can expect with the image you create for your business. This image will be impressions you make on others.

For example: Will people perceive you as handling high-, medium-, or low-priced vehicles? Will your used cars appeal mostly to the rich, the poor, or the middle class? Do you sell something for everyone or do you specialize? (Just pickups, just vans, etc.)

Any positive image is fine, as long as you are consistent in everything you do within the scope of that image. The image you create will largely set the tone for all your business activities, including selection of a business location, type of vehicles handled, prices charged, etc.

SELECTING A LOCATION

If you are going to buy one or two cars at a time for resale on a part-time basis, then working right from your home shouldn't pose a problem for you. However, if you intend to eventually have a large, full-time business operation, the most important ingredient that can lead to success or failure can depend on your location. What constitutes a good  location varies with the type of business. But in the used car business it means being highly visible in a high traffic area and being situated so that driving customers can get to you. In many cases, the location you consider ideal may not be available or if it is, the cost may not be practical. In that event, you will have to do strong advertising and promotion work to make customers aware of who you are, what you are selling, and where they can find you.

Whether you select a location at your home or in a business district, you must make certain you are operating within city and county zoning ordinances. Zoning ordinances are regulations specifying what each parcel of property within a community can be used for. If the location you decide on is not zoned for the type of business you want to start, you can appeal to the zoning commission to obtain a "zoning variance." If approved, you would be allowed to use the property for your business.

HOW TO LOCATE USED CAR SUPPLIERS

To get started in the "Buy-Low, Sell for Huge Profits" used car business, you will have to locate suppliers. In some cases you will be able to buy directly from individual car owners. At other times you will go to independent auction houses or attend U.S. Government Auction Sales where you can often purchase vehicles for pennies on the dollar.

At independent auction houses vehicle owners have auctioneers sell their vehicle by getting buyers who are at the auction house to bid against one another. Generally, there is a minimum bid set. The person who offers the highest bid over the minimum set has the winning bid. The seller however, also has the right to sell the vehicle below the minimum bid if he chooses. Incredible bargains can be found at independent auction houses.  Independent auction house sales take place throughout the U.S.A., many on a weekly schedule.

U.S. GOVERNMENT AUCTIONS

A wide variety of personal property either no longer needed or seized by the Federal Government is periodically placed on public sale.

The Department of Defense and the General Services Administration are the principal Government sales outlets for surplus property. As items become available for public sale, catalogs and other types of announcements are distributed to people who have expressed an interest in bidding on the types of property being offered.

Sales generally are on a competitive bid basis, with the property being sold to the highest bidder. Among the many thousands of items sold are automobiles and other vehicles of every imaginable make and model. In fact, tens of thousands of vehicles are sold by the government at public auctions throughout the country every year!

How can there be so many vehicles for sale? Because the Government is so huge that it's difficult to even comprehend just how much property is amassed for resale. In fact, the government seizes, confiscates, and forecloses on property  that results in many millions of pieces of property every year, and the numbers continue to grow.

Incredibly, the government isn't like a private business that is interested in making a profit on items it sells. The government is mostly interested in eliminating the enormous stockpiles of seized and surplus vehicles and other properties. As a result, many thousands of vehicles are offered to the public through government auctions at a fraction of their actual values. This is where you can buy just about any model of vehicle you want at super-huge savings, and make incredibly-high resale profits.

HOW TO DETERMINE THE VALUE OF USED VEHICLES

Whether you attend auctions or purchase a vehicle outright from a seller, you must know what it is worth. The best way to determine a vehicle's average market trade-in or wholesale value, average loan or average retail value is, is to subscribe to the N.A.D.A. Official Used Car Guide, published monthly by the National Automobile Dealer's Used Car Guide Co., 8400 Westpark Drive, McLean, VA 22102-9985. Write for current subscription rates.

N.A.D.A. also publishes guides as follows: Official Older Used Car Guide...Official Wholesale Used Car Trade-in Guide...Official Title & Registration Book...Official Recreation Vehicle Guide...Official Motorcycle/Snowmobile/ATV Personal Watercraft Appraisal Guide...Official Smaller Boat Appraisal Guide...Official Larger Broad Appraisal Guide...Official Mobile Home Appraisal Guide and the Mobile Home Appraisal System.

A weekly used car market guide is also available from: National Auto Research, P.O. Box 758, Gainesville, GA 30503. Write for current subscription rates.

REGIONAL CLASSIFICATIONS

The average values listed in the N.A.D.A. Official Used Car Guide are based upon reports of actual transactions by dealers and auction houses throughout each area for which a guide is published. A used car guide-book normally includes 1) Domestic Cars; 2) Imported Cars; and 3) Trucks. Manufactures' names are listed alphabetically.

SECURING LICENSES AND PERMITS

City, county, state and/or federal licenses or permits are often required before entering a particular business or service operation. Often, these are issued solely as a fund-raising measure, and are therefore easy to obtain simply by submitting a fee.

On the other hand, licensing is also used as a method of regulating the competency of those entering a particular field and to protect the public from shady operators. In some cases, an exam is administered, and moral and financial requirements may need to be met as well.

In the used-car business, most states require that you obtain a dealer’s license if you are buying and selling vehicles for the purpose of making a profit. However, you are not required to apply for a license if you only make an isolated or occasional sale. You are not considered to be in the business of selling motor vehicles in that event. "Isolated or occasional sales" in many states means "the sale, purchase, or lease of not more than five motor vehicles in a 12-month period".

Once you begin to sell more vehicles for profit than is allowed by your state law on an annual basis, you should apply for a Dealer's License by contacting your State Department of Public Safety or Department of Motor Vehicles.

Check with your attorney or other city officials to determine what licenses and permits are needed. Simply starting up a business without having the proper authorizations can result in severe penalties, and you could be forced to discontinue operations.

Many states, and some cities and counties, require that sales taxes be collected. The stated sales tax permit is available from the State Department of Revenue, City and county permits are available from the tax department in those jurisdictions.

Even though a certain amount of "red-tape" must be tolerated to obtain some licenses and permits, the lion's share of the effort for this is usually a one-time occurrence; then, it's just a matter of simply submitting an annual renewal fee of some kind year after year after that.

​External Links/Resources to get Started:


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