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There is no crash course that you can take on how to start a business buying and selling cars. All you need is some smart negotiating skills and establishing the fact in mind that you make money in this business when you make the purchase, not when you sell the car. Sounds like an absurd idea right? But it’s the essence of getting the hang of this business. Getting a great purchase deal should be your top priority to be successful. You can’t expect to buy an expensive car and sell it at a higher price. If you fail to negotiate a good deal with the seller it is highly unlikely that you possess the talent to sell it for a profit either.
Here are the Top 3 things to keep in mind when starting a business of buying and selling cars.
- Making Effective Purchases
Conduct a research to find sellers, prefer individual owners rather than car dealers as they are likely to quote higher prices. Search on Craigslist, eBay or survey car auctions to find potential sellers. Also use online sites for an approximation of prices to negotiate a purchase price around it and also to have a general idea of the market. It is always a good ideato make yourself familiar with all the technicalities of a car and check it yourself. However, you can have a professional check it for you for any leaks or damages etc. Also always take a test drive before purchasing to check brakes and transmission etc. And negotiate a lower price based on the faults you have found. Get the copy and title of the registration papers of the car before making the full payment. For more cars like the Jeep Wrangler, use a site like CarFax for title and registration detail to avoid any unpleasant surprises later.
- Flipping the Car at Maximum Profit
Using the same sites you used to search for a purchase price, research and set two prices for the car. One being the lowest and the other being the maximum. Try and negotiate a price between these two to earn maximum profit. As people are keen on bargaining even when you tell them that you won’t budge, this window will help you get a reasonable price for the car. Get the car checked and fixed by a mechanic before you sell it to avoid getting a lower price because of the faults. The smart thing to do is to include any possible defects in the advertisement and then quote a price. Also make the car as presentable as possible before showing it to potential buyers. For cars like Jeep Wrangler, search for any common issues and when negotiating with the buyer quote these to them.
- Maximizing Business Profits
You can maximize profits for your business as a whole by keeping tabs on cars that are high in demand and sell faster. Even if you are not interested in those cares it is always prudent to deal in what the market demands. For example you deal in SUVs but there is a high demand for Jeep Wrangler in your area.
Like other skills buying and selling cars effectively has a learning curve and you can learn with time however to survive in this business you need to be assertive and convincing otherwise other players in the market will outsmart you easily. Another smart thing would be to make knowledgeable friends in the business. Building a network can help you grow faster than you could have on your own.
Let us know how these tips have helped you gain insight on the business in the comments below.
Ryan Yarbrough is a small business consultant, speaker, and the manager at Davis Financial Services, a small business consulting firm.