Buy and Sell Cars


I have known a number of people who buy and sell cars for a profit. Some of them were short on cash to invest, and so they used to come to me to borrow the money necessary. Usually I lent the money for half of the eventual profit, rather than charging interest. In case you missed that, this is suggesting a way you can buy and sell cars starting with no money of your own.

In most states you can buy and sell a few cars without needing a dealer's license. When I lived in Michigan, for example, the law allowed for up to six transactions annually. If you put six cars in your name and your wife did the same you might get to sell up to 12 without a license (but I am not recommending this--once you sell more than 6 you should probably just get the license and do it properly).

What do you need to know to make this work? You need an eye for value, or a willingness to study and proceed cautiously. If, for example, you know that a given pickup truck should sell easily for $4,000 when cleaned up, you just offer a lot less than that. I always liked to buy at a price which made it a safe deal even if the transmission needed major work before the car was sold. In other words, paying at least $1,000 less than the expected sales price is the most you want to pay.

If you are mechanically inclined you might do well looking for cars that have problems you can easily fix. Otherwise just look to buy at the best price you can get that will work, and plan to clean the car inside and out.

How Much Can You Make?

I have seen cars that were bought for $3,000 sell for $7,000. I have sold cars several times for $900 to $1,000 more than what we paid (which meant my cut was $450 to $500 since I was just putting up the cash and letting my partner do all the work).

Ways to Make More | Related Opportunities | Tips

To make more money, look for better buys and sell them faster so you can get going on the next project. It has never taken more than a couple weeks to turn a car around when I have invested, and it can be done in a matter of days. If you really need to make the money this week, invest in a type of car that is popular and at a price point where they turn over fast (this is commonly $2,000 to $4,000 retail).

If you do not have a good idea of values, use a price guide (many are online now). Pay less than the "wholesale price" if you want to be really safe. Some of these supposed sales price guides show unrealistically high prices. Assume you will be selling for several hundred dollars less than the retail price shown in the guides.

Qualifications / Requirements

In many states you need a driver's license to even buy a car (although if you don;t have one you can always get a partner).

You also will need to have insurance for the car. You can buy a policy and then cancel it after selling the vehicle, and you'll get a prorated refund on the balance. Unless you have a poor driving record the cost of insuring the car for a couple weeks should be less than $50.

First Steps

If you do not already know what cars are worth (and even if you think you do), get a used car price guide. Then start looking for cars for sale online, in newspapers, and by driving around.


Edmunds - They have a decent online used car price guide here.

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