A little over a month ago, I bought a truck with the intention of fixing it up and reselling it for a net profit. I talked down the dealer from $4,995 to about $4,250. After the title transfer and tax, I purchased this 2004 GMC Sierra 4×4 for a total of $4,700. There was definitely risk in this purchase since the truck didn’t shift quite right, the fan threw nothing but 90 degree heat, and the front bumper was all cracked up. Since I knew these trucks were going for nearly $7,000 though, there was definitely some room to make a few repairs.
The Many Things That Went Wrong
While I knew about the issues I mentioned above, there were a few more problems that arose along the way. First of all, the service engine light came on after about 3 days of owning this truck. My guess is that the dealership cleared the codes and somehow failed to mention that during the sale (not very happy about that!). So, I went and got this checked out. Thankfully, the issue was only the O2 sensors. If I were going to keep this truck for myself, I would probably ignore this service engine warning for a while since this warning isn’t that big of a deal, but since I want to sell this truck, I would much rather that all dash lights stay off. It is 100% easier to sell the truck this way.
I got a quote to repair the two sensors that were bad – it came in at about $250. Instead of paying $85 for each sensor at the shop, I decided to reduce my costs and find the parts myself. Sure enough, I found two brand new O2 sensors for $15 each (on eBay). Instead of paying $250, I was able to get these replaced for a total of $95.
Things that went wrong #2
Having the dash clear was a beautiful thing….for about 5 minutes. The light came on again during my drive home – back to the shop it goes. It was another O2 sensor. Again, I spent $15 online, took it in to get replaced and was out another $79.
Things that went wrong #3
Like I said in the first paragraph, the front bumper was half cracked off, so I decided to replace it. The cheapest one I could find online was $99, but it was black, not white. I spent about 3 days painting it and applying the clear coat. It looked great and I was proud of my handy work.
…and then I hit a deer.
I absolutely could not believe it. After about three days I was driving near my house and BOOM! I sent that deer skidding across the road. Nothing was damaged on my truck except for my brand new bumper. It was smashed to pieces.
Since then I have purchased yet another bumper, painted it, applied the clear coat, and installed it (yesterday).
The BIG SALE
After a little fiddling, the air conditioner is working again. The shifting is 10x better just by running premium fuel instead of regular (this issue is another sensor – the transmission is still strong thank goodness!), and the bumper has been painted and mounted!
So the big question is, how much money do I have tied up in this “investment”? Take a look at the run-down below:
My total expenses are $5,298, and I plan to list this truck for sale at $6,900. After the assumed negotiation from the buyer, I’m fairly certain I can get $6,500 for this truck, leaving me with a $1,202 profit for maybe 20 hours worth of work (and I had fun doing it). That’s not too shabby huh? Hopefully I can report this truck as being sold by next Sunday!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.