How To Start A Car Flipping Business

This article discusses comprehensive ways to start a car flipping business.

Flipping cars has increasingly become an attractive business for players within the auto industry. Vehicles are bought at lower rates, reconditioned, and later sold at a higher price to interested buyers.

This line of business has seen significant growth with entrepreneurs making significant earnings.

How To Flip Cars For Money

If this opportunity excites you, consider starting your own car flipping business as there’s lots of money to be made.

However, you’ll need to know the “how” of actualizing your desires and we’re here to help.

With the right motivation and guidance, you should be able to realize your objective. So, let’s begin right away!

Adding Value

Anyone involved in car flipping is in the business of value addition. The value of a purchased car appreciates due to new improvements made. Such improvements are highlighted when selling them to new clients. Clients get what they need while the entrepreneur earns extra on the initial purchase value.

It’s a “buy low, sell high” type of business you should explore if you have what it takes. So, what will it take to launch your car flipping business? Several things are involved.


Adequate financing is essential for starting a successful car flipping business. Without this, very little, if any progress can be made. So, how much is sufficient to start this business? This depends on what your goals are.

Starting on a small scale is mostly recommended if you’re new to the business. At this level, you’ll an investment amount of about $3,000 to $5,000. This doesn’t seem like much, however with proper utilization, you can significantly grow your investment.

  • Should I Apply for a Loan?

As part of raising adequate funds to start your car flipping business, one of the most common questions asked by many borders on whether to apply for a loan. A loan application is one of the most reliable ways to obtain financing for many businesses.

However, we do not recommend seeking a loan for this venture. Since the amount required isn’t much for small scale operations, consider sourcing the money required through alternative means such as savings. You can later apply for such loans but for your first car flip, try reducing the risks involved by avoiding the loan option.

Abiding by State Laws

Part of your preparation to launch a car flipping business includes finding out applicable laws and following them. Different states have unique laws regulating the number of cars you own in a year. There are legal ways to maneuver around these laws without having to obtain a dealer’s license.

Some car flipping business owners leverage on the loopholes available by putting using names of spouses and friends to add to their total car tally. With time, as your car flipping business grows, you can afford to apply for a car dealer’s license.

It’s important to ensure you stick to the rules when it comes to starting your car flipping business. That way, you have no fear of breaking the law.

Type of Cars to Flip

Part of the decision you have to make as an entrepreneur is to choose a car type to flip. How is this important? It is because the type of cars you flip will determine your turnover and whether you make a profit or not.

There are common and luxury cars.

The dynamics for both types differ. Luxurious cars are far more expensive than common cars. This category of vehicles has longer disposal times. In other words, it takes longer periods to sell off luxury cars. However, the returns on investment or profit margin are usually significant.

There are also fewer buyers to sell your luxury cars to. The opposite applies to common cars. For starters, you should consider this option as you’re likely to sell faster due to a higher percentage of buyers or customers involved.

  • Consider Uglier Cars

Sounds strange right?

Well, although it does, it remains a fact that these tend to result in higher profits than less ugly cars because they cost less to buy. With some good wash and little maintenance, you can make such cars shine as new, thus increasing their value considerably.

Some caution is necessary. Certain cars may require more than just minor fixes or maintenance. These cars may have multiple dents as well as bad paint jobs.

Buying these cars to flip them later may not fetch you the income you envisage. Plus, such cars may cost more to maintain.

  • Go for Lower-Priced Cars

When it comes to a car flipping business, a term known as “the sweet spot” is often used.

This refers to an affordable price range of cars costing anywhere from $2,500 to $4,000. Now, most car buyers consider this price range affordable. Anything above that will be deemed expensive.

What more? When a car sells for a higher price; say $20,000 and above, it undergoes much more scrutiny from buyers than lower-priced cars. This is understandable because lots of money is involved in the process too.

As such, it takes longer for the cars to be sold, plus they are harder to sell.

  • Spreading your Investments

One of the ways to make a profit faster for car flipping businesses is by spreading their investments. What does this mean?

Spreading your investment simply refers to a situation where you purchase multiple vehicles. Here, rather than using your entire capital for a single purchase, you diversify your investments.

Are there advantages? Yes, there are. With this investment model, you tend to incur lesser losses.

  • Getting the Best Deals

Before starting your car flipping business, it’s important to know where to get the best deals. Remember, a good deal translates to more profit margin which in turn means more money in your pocket.

For beginners, Craigslist is the go-to place for exciting auto deals. This site or directory allows you to refine your search by stating what you need. Sellers will flock to such ads and sell to you at a great price.

  • Lots of Deals Might be Lying Around

A little search around your neighborhood may be the action you need to take to spot the best deals. A lot of times, cars may be lying around idle in the front yard or lawns of homes. A little inquiry may turn out to be a great deal.

  • Public Auctions are Great Places to Look

If you rarely attend a public auction, you should try doing that because it’s likely to benefit your business. Such events don’t only reveal great deals but also present you with the rare opportunity of looking out for potential buyers.

Starting a car flipping business involves a whole lot of procedures as we’ve discussed above. This guide on how to start exposes some of the most important factors to consider when launching your business.

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