The popular Barrett-Jackson automotive auctions are the flashy end result of the business of flipping cars. While buying used vehicles for a low price, fixing them, and selling for a profit has always been around, there is a renewed interest due to shows like Fast N Loud and Counting Cars.

car for salePre-Great Recession, car flipping was a decent way to make cash as a side business, or even a full time source of employment for a few adventurous souls. The trick was to find a vehicle that needed minimal work, but was priced below its good condition value. A common story among flippers was to find a running car for $1500, do a full detail and tune up, and sell it for $4000.

However, the market has changed in the last several years. The recession of 2009 ate up a lot of household’s expendable income, suddenly making the $1500 cash purchase unattainable. Also, due to the economy, families put off purchasing new cars, making the used market heat up. The lending system has changed as well. Gone are the days when banks were offering zero down to consumers with no credit buying a brand new car. Additionally, the Car Allowance Rebate System, Cash for Clunkers, resulted in the destruction of several candidates worthy of a flip. Everything from a Bentley to a TVR, to a Buick GNX and several Corvettes were traded in and scrapped under the program. With less potential projects out there, their value rises, and squeezes out the part time flipper.

Is it all dark and dreary for this hobby/part-time income generator? No, there are signs it is returning to life. First, the economy is slowly improving. Sure, it’s still not great, but year by year as employment levels return to normal, that will generate more expendable income, and have more people looking to use it. Second, the average age of a car on the road in the US is now 11.4 years, according to Polk automotive research firm. Some of these vehicles are starting to wear out, and there will be demand for affordable, but nice, cars. Flipped vehicles included.

For the flipper, the market has upsides as well. The used cars on the market are better built vehicles, with more options and safety features than in the past. Gone are the days when the clear coat faded off after 5 years, and the head gaskets were due for replacement every 40,000 miles. With more durability, the part time mechanic has less to fix, therefore a lower bill to get the vehicles back into desirable and profitable shape. Plus, with the plethora of information available online, flippers have access to incredible mounts of know-how that was unavailable just 10 years ago.

While the flipper’s market has changed, it is still a viable option for those with patience and forethought. While dealers may hate flippers, they have survived, and will continue to survive, as long as the used car market exists.

5 Responses to Is Car Flipping for Profit on the Decline?

  1. Every day you have a car, it loses value, making cars are the worst investments we all have to make. I’d say flipping cars is just about the riskiest thing I’ve heard of for trying to make a buck. I would bet half the time you buy “in demand” cars, you’d have trouble selling them above what you paid.

  2. honestly. i bought an “in demand” subaru wrx for cash traded it straight across for a car i sold for 14,500 cash made 8000 in 2 weeks. thing is……you MUST know values and be mechanically inclined,,VERY, other than that youre wasting your time lol..

  3. Every business is risky, if it was that easy everybody would do it. Don’t listen to the people that are NOT in he business and listen to the successful ones. Blackberry was on top 3 years ago and investing on them was a no brainer, but them the iPhone came out. I flip cars and make a really good living. I quit my $26/hour job and started flipping cars full time last summer and make more $$$ now. Just to your research and knew your market in your city.

    I only sell 4 door imports, about 10 years old and make about $1200 on each car. I buy my cars from locals (kijiji) and buy the cars that people need gone ASAP.

  4. I’m thinking of trading in my 2006 Mazda 3 GT Sport for a mini cooper next summer, I drove one the other day and they are hilariously fun

    Perhaps I’ll not gain anything..but after all the important it’s to gave fun 😛

  5. When buying and selling vehicles for profit, is it necessary that I get temp. plates and pay all of the transfer and registration fees if I plan on flipping the car as quickly as possible?

    Any info would help. Thanks.

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