How I Made Another $650 by Flipping a Car

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Have you ever thought about flipping a car? That is, buying a car with the intent to resell it and make money? This isn’t something that I intended to do on a regular basis, but when you never lose it makes it kind of difficult to stop!

Flipping a Car: 2008 Chevy Malibu

If you remember, I purchased a 2008 Chevy Malibu LS for $4,900 at the end of February. Instead of listing it for sale right away, I spent some time cleaning it up and then decided to drive it and enjoy it for another week. This car is one of the nicest I have ever owned and it was a blast to drive. But, as with most cars, the high of the initial purchase wore off soon, so after one week I was ready to put this thing on the market and make a few bucks.

flipping a car

With any vehicle purchase, you must first pay taxes and register the vehicle. Then I had to get the oil changed, replaced a hubcap, and bought a remote door opener so that the car had great appeal to the public. After these necessary fixes, I had approximately $5,350 invested into this Malibu and put it up for sale on Craigslist for $7,200.

The Market Response

Even at $7,200 (which was a higher price than I thought was realistic), the response was pretty incredible. I received many text messages and phone calls, but there just wasn’t anyone coming to take a look at it. One of the main issues was the check engine light. This car was emitting a code IMAG0061for the catalytic converter, which didn’t seem to harm the performance of the vehicle, but many people just get nervous with that light on. So, in response to this concern, I dropped the price to $6,900 and updated the ad to emphasize the brand new tires, the new key fob, and the reliability of the vehicle.

Again, the response was quite good, but I only had one interested party come to look at the car. At this point, it had been 3 weeks since I had listed the Malibu and was getting a little concerned. If I were to hold onto the car for another month, the chances would be greater that I would have to fix something on it, which would then reduce my potential earnings amount. And, it would only take one big issue to put my earnings into the negative.

The interested party was a single mom with her second kid on the way. She and her father were extremely nice and were overly thankful for allowing them the time to look at the vehicle. They left without making an offer, but told me that they had cash for the purchase (for whichever vehicle they decided on).

The Offer

About one hour after they had left, they began to text me an offer. They kindly explained that my asking price was a little more than they were comfortable spending. They didn’t want to be disrespectful, but they felt they could only offer me $6,000. I thought about turning down this offer for a second, but then my heart got soft (maybe I shouldn’t be a car dealer later in life after all).

I had a great respect for these people. They were quite friendly. Plus, they were paying for this vehicle with cash! I loved that! I felt that I had to reward them for their wise decision not to finance a car. So, I simply agreed to their offer of $6,000 (even though I probably could have sold this car for at least $6,500). They came the next day with an envelope packed with hundred dollar bills, and I signed the title over to them. It was the simplest sale I have ever made and I am now $650 richer. Sounds like a win-win right? I thought so.

The car is sold and I am now back into my Honda Civic. It definitely isn’t a head-turner. But it is the most dependable vehicle I have ever owned and will be a great summer ride. Stay tuned for another car flip – I figure it’s just bound to happen again sooner or later. πŸ˜‰

Do you think I should have held out for more money? Would you be content with a $600 gain?

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Money

Derek

AUTHOR Derek

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.

14 Comments

  1. Sounds like a quick flip and your profit from the work you put into the sale seems more than adequate – I’d be pleased πŸ™‚

    Just a thought – Could you have delayed paying the taxes for a short period of time and reassigned them to the new buyer? Where we live I have 14 day(?) to remit taxes – if u have a sale by then you could have possibly earn an additional few bucks ( note my email address πŸ™‚ )
    John Brewer recently posted..Contest Details

    • I have heard of some people delaying their tax payment with that 14 day grace period, but then I wouldn’t have had the joy of driving it! Also, I would be extremely nervous about someone test driving the vehicle (since it probably wouldn’t be insured either). It is a good thought, but I think I’ll stick to paying taxes on the purchase, just to be safe.

  2. Psssh! $650 in about a month on a $5350 investment, that’s a 12% return my friend. You better believe I’d take that! =) I have always thought about doing this but always get scared of not being able to sell a vehicle. How many vehicles have you sold to date?
    Marvin recently posted..3 Reasons Why Financial Literacy Is Important

    • 12% in one month! Most people would take that over the course of a year. πŸ™‚ Thanks for the props Marvin. I thought that I might take a break from my car flipping, but I have to admit that I am already looking for the next one…. πŸ˜‰

  3. You better stop posting these success stories otherwise I might have to try my hand at this as well!!

    In all seriousness, I think you did the right thing. Sure you could have held out for more, but I’m like you…if I have the chance to do a good thing (and this sounded like that) then I would do it. There will be other cars that you can hold out for more money. Just be happy with the $650 you made.
    Jon @ Money Smart Guides recently posted..The Round Table – March 30, 2014

    • Haha. Well if you find a few deals like I have been, then go for it! You really have to know the market though. If I were you, I would get to know 1 or 2 types of vehicles really well and watch the pricing on Autotrader and Craigslist. Then, when that deal comes you’ll know it and be able to make some money. Good luck!

  4. Derek,
    Excellent job! You did the right thing – you gotta know when to hold ’em, know when to fold ’em….

    Just wondering – have you ever thought about a side hustle where you “sell” people’s cars for them for a fee after you’ve cleaned them up and marketed them? We’ve got a car we’re going to be selling in about 5 years and if someone offered that kind of service I’d jump on it, figuring that whatever your fee is, I’d still come out ahead. Win-win.

    • That’s a pretty good idea Jim. I would really enjoy doing that – kind of a Realtor of sorts for cars huh? Hmmmm. You’ve got my wheels turning… πŸ˜‰

    • Haha. I don’t think car flipping is the way to making millions. It’s basically just a fun hobby to make a few bucks here and there. So far, I have bought and sold 3 cars. I made a grand on the first one, $600 on the second, and $650 on this one. Not too shabby I guess. πŸ™‚

    • I’m still glad I sold it for cheap too. It really was a win-win Thanks for the comment Crystal!

    • When I find a deal that I know I can make money on, I figure “why not?” πŸ™‚ Yes, it is definitely helping with this mortgage payoff.


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