Car auctions are not only a great place to buy a car, they are also an excellent way to generate income in a relatively short amount of time. The best part of it all is that it’s very easy to do. As long as you follow these general guidelines you can average a profit of $1,500-$3,000 on each car you buy and sell.
Your most obvious starting point is the find out when and where the next car auction will be held in your city. You can do this by either looking through the newspaper, calling your local police station or towing yard or by buying a list of all of the car auction sites in your city. I prefer getting the list because it provides me the information on numerous locations, such as their address, phone number and even website.
After you have found out when the next auction will be, your next step is to find out what kind of cars will be sold there. You can do this by visiting the site 2-3 days before the auction or by going to their website which will usually provide you with information on the cars such as their year, make, model and mileage.
Once you have this information, select a couple of cars that you would be interested in selling. The ideal car would be one that has a low to average amount of miles on it. Now, using a Kelly Blue Book, look up the trade in value of the car because that will be your target price that you will want to pay for the car. Anything above that price will eat into your profits.
When the auction date rolls around all you have to do is inspect the vehicle to make sure that it is running good and has no signs of being in an accident, flood or fire. Once the auction starts, stick to your guns and don’t over bid for the cars you have done research on.
After you buy the car, the only thing left to do is sell it. You can do this by placing an ad on craigslist, autotrader or in your local newspaper. By selling the car for $100-300 less than what everybody else is asking for will have you car sold in a matter of no time.
Once you buy and sell a couple of cars, the process of researching the car’s value and checking for damage will get easier for you. But watch out because you can only sell so many cars before having to get a dealer’s license, which can be pretty expensive. So, check with your state’s DMV office once you sell more than 2-3 cars.