You’ve probably heard of house flipping in real estate and wondered whether it’s possible when dealing with cars.
The answer is a resounding yes. Flipping can be applied to pretty much any asset. You can buy old cars, recondition them, and sell them at a higher price. Many people have made fortunes doing this every year.
So, how can you generate profits restoring old cars? Before getting into the nits and grits of this topic, it’s important to note that you can only make money in this industry if you’re determined enough.
In addition, you need substantial knowledge not only on the types of cars but also their repair methods and spare parts. With that out of the way, here are some tips on how to make good money reconditioning used cars:
Purchase the right car
As an entrepreneur, your target should always be to make profits. Of course, for you to achieve that fate, you need to spend less than the expected selling price of whichever vehicle you’re looking to restore. Remember, your expenses start from the time of purchase, so it’s imperative that you buy the right car at the right price.
How will you determine the best price range for any classic machine? Well, for one, the brand and model of the vehicle play a significant role because this will determine the cost of the repairs.
As such, it’s imperative to have sound and up-to-date knowledge about the market price of a given car, its ideal reconditioning methods, and the cost of the spare parts. For instance, if you understand a defender restoration process, you’ll be able to calculate the total expenses from the time you purchase to when it’ll be ready for sale. As earlier mentioned, the key to generating reasonable profits is to keep your initial spending as low as possible.
Know where to source your cars
Understanding the arithmetic that goes into car restoration and reselling is one thing, but sourcing those cars is where many enthusiasts have fallen short. Like any business, the first few things you need to get right before actualizing an idea are the source of your products and the expected customers.
Fortunately, there are many options to consider when it comes to sourcing classic machines. Barn finds is one of them and it should be top of your priority list. Here, you’ll come across cars that have been stored away in a barn for several years covered in dust. The advantage of going with such vehicles is they’ve been protected from wet or humid conditions which would have otherwise destroyed their essential parts.
Scrap yards and repair shops are other great sources of classic cars. There’s a perfect chance you might get an old vehicle abandoned in these places. But as a rule of thumb, make sure you assess it carefully and see whether you’ll be able to restore it with the smallest possible budget. Doing so will save you a lot of frustrations in the future.
Schedule proper restoration process
Every step is significant, but the restoration process could be the most important because it’ll determine whether you’ll sell the car at the desired price. Of course, each car may require different repair procedures, depending on the model and the condition in which it was purchased.
Nevertheless, it’s always recommended that you take everything apart before you decide on which parts to restore. Make sure you do this carefully because any mess-up could lead to extra costs.
Find a specialist for every department, from the engine to automotive upholstery. Let them assess the condition of every bit and advise on what should be repaired or replaced. Once everything is back to their operational condition, re-assemble the vehicle and carry out necessary tests.
Sell the car for profit
Your vehicle is now ready to be sold; so, what next? First, you need to determine the market fair value. Of course, it’s always wise to do this even before purchasing the vehicle in the first place.
The next step is to contact the car’s insurance provider and let them know about all the details so they can cover your asset accordingly. Finally, you can start looking for potential buyers either on social media or automotive-related sites. Taking this vintage machine to shows with a ‘for sale’ sign will also attract prospective car owners.
Starting and running a successful car sales business can be tricky if you don’t know the basic rules of the industry. Therefore, before you think of restoring any old vehicles and returning them to the market, make sure you arm yourself with the necessary knowledge and skills. You need to know where to source your vehicles and who’ll be your target customers.
With this plan in place, you can now start purchasing old cars ready for restoration. But before you invest your money, it’s important to calculate how much it’ll cost you and whether that’s lower than the expected selling price. As your business grows, you might want to register it in the future and get a dealer’s license to avoid any legal repercussions.