gamhat1974

i just got my dealers license . can i go to dealer ships and buy the cars that were traded in at a good price

Balr14

Yes, but....

It isn't that simple. Your best place to start is at the auctions. Network a little,make some connections and you may be able to find some dealers willing to work directly with you. Especially if you get some cars they may want. Most areas have car dealer associations that can help you. But, it's an "Old Boy" network wherever you are. You have to spend the time and pay your dues.

gamhat1974

Thank you , im just trying to get started and to find vehicles at a good price . Im not having the best of luck on the help part. there isn't a hand book to help car dealers that are first starting lol

Balr14

My uncle was a dealer and I worked for him many years ago. It's a very hard business to break into unless you have connections. If you have never worked at a dealership, it wouldn't be a bad idea to work at one for awhile. The auctions are still going to be your best bet. But, be prepared to get burned until you learn what you are doing. You are going to sell a dozen cars before you start making a profit, so bring lots of money.

Another point to remember.... when dealers overpay for a car for whatever reason, most of them will hold on to it until hell freezes over. It takes them forever to finally realize it's time. On the other hand, if they take an undesirable car in trade, it's gone to auction immediately. That doesn't leave you much opportunity to deal direct.

gamhat1974

Well that isn't very good news for me because I am brand new at this and haven't worked at a car dealership before . thank you for be straight with me

cool flash

Get yourself a mentor with relevant experience.

Otherwise you will get burnt plenty and that can be very costly!

CF

sober_owl

go to dealers auction.. and insurance auctions...

iaai.com coparts.com...etc

also many other that only allow dealers to buy cars in person u go and bid..

golftime

As Bair said, you really have your work cut out. Every new car dealer out there already has a wholesaler (it is a necessity for anyone who is a dealer), and for the most part, they are large volume wholesalers who buy every car that their dealers don't want for resale on their lot. And while those wholesalers don't always make money on every car, at the end of the day they are way ahead. For the most part, small wholesalers have gone away and it has become a business of volume. As has been said by others here, visit the auctions and hopefully with the ability to look up comparable sales and a growing knowledge of the business, you will figure out how to put a good number on a car. Good luck.

bhvrdr

Manheim is what you want access to. Its the nationsl dealer auction database. If you have a friend who has access you can use their login creds for now.

mike

Carsly

I have never worked at a dealership and do not have a dealer license, so take my advice for what it's worth having been a knowledgeable observer of the market for 25+ years.

It's go big, as other have said OR find yourself a niche that you can own/dominate without a ton of capital but with expert know-how. Examples? Maybe late-model Saab's, 996's, 90's japanese sports cars, whatever you know a heck of a lot about and are willing to invest obsessively to know better than anyone else.

Information asymmetry is how you'll make money systematically. But you do have to invest a lot of time and effort to build and maintain that edge.

Meursault88

This may sound horrible and in fact it is but in the 90s there was an opportunity in buying and selling decade old Mercedes. The buyers of these cars in the 80s when new did not like the perceived threat in selling the car to the typical 2nd hand buyers that were seeking these cars out in the 90s. Think 40-60k Mercedes sedans 450-560 SELS - while the fair value of these cars ran from $8-10k, I found that they would often sell to me for half of that just due to the racist fears they built up in their heads over time. I could then drive those cars for a year plus and then flip them for double almost every time.

The internet was non-existent and Car-Max was just getting started so there wasn't any competition for other sales venues.

I don't know if there's an opportunity like that right now but it was enough for me to put me through college and had me driving nice cars the entire time. I also had the space for 5-6 cars and basic insurance was only about $150 annually for any/each of these cars.

One place I might look if I were you would be to become a 996 expert - they can sell very cheap and if you buy right and make the right improvements (IMS solution) you might be able to flip these cars and make $3-5k each time. Being well capitalized, having a knowledge advantage and not making any stupid moves will help you succeed.

Consider every cost (including opportunity costs e.g. Is there something you can do that is more profitable with your time) when you go to make a business or living out of this. Keep good records for tax purposes and for calculating if you're really doing well or just think you're doing well.

I've known and worked with a lot of futures, commodities, bonds and options traders (and gamblers) and most of them remember the big wins and forget the small losses. But for the most part, it's death by 1,000 cuts that typically ends a traders career. I would think what's true for stock operators is true for car flippers. Keep good records.

Balr14

This has not been mentioned specifically, but your odds of success increase in direct proportion to how much money you have to invest. There are some nationwide chains that have franchises available, too.

sandwedge

There's a reason the car sits at the auction site rather than the dealer's used car lot. So how do you check an auction car? Take a 997 for example. How do you check for bore scoring at the auction site? I doubt they'll let you buy the car and then return it days later because you found issues you didn't like.

Drgleeds37

Balr14

Absolutely! My uncle ran the SE Wisconsin auction for a number of years and I moved cars. If you were lucky, a perspective buyers could hear a car run (assuming it would start), check the oil, check the clutch, check for driveline clunking when the transmission was put in gear, see if the radio, heater, wipers and stuff like that worked. But, as often as not, all you get is a visual inspection. You had to know what the problems a given model was likely to have and how much it costs to fix. Knowing what to bid to minimize your risk is a real science.