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Once they’ve been transferred from dealer to buyer, most cars lose significant value. While there are numerous car brands and models that have naturally increased in value as time goes by, the best way to make money off a used car is to restore or “flip” one.
Although the term is most often used in real estate circles, some serious money can be made by “flipping” used cars. Like houses, buying used cars, restoring them, then reselling them at a higher price takes sound strategy, know-how and patience.
How To Successfully Restore and Sell Used Cars
According to Progressive, cars that are unique, rare or enjoy a cult following should be targeted by first-time restorers. Older performance vehicles, collectible muscle cars, 1950s American classics and nostalgic British and German cars are good bets to appreciate over time.
For Brenda Christensen, CEO of Stellar Public Relations and former robotic AI language programmer for GM, restoring cars started at an early age. “Helping my brother restore his classic Trans AM, Thunderbird and other cars,” she said. “Being from Detroit, it’s part of growing up there.”
Christensen has focused her restoration projects on the beloved Chevrolet Corvette (which her brother helped design for GM), in particular, the gorgeous third-generation C3 model, of which there are surprising amounts available at reasonable prices. Many C3s can be bought for under $20,000, according to Hemmings auto auction site.
Here are three basic tips for beginners looking to make money restoring and selling used cars, Christensen said.
Choose Your Project Sensibly
Your initial course of action should be to choose a project that has the potential to turn a hefty profit. Some classic cars sell better than others, so being able to gauge costs and becoming familiar with the used marketplace and car-flipping trends will help novice restorers significantly.
Of course, if your project is one borne of reward and pleasure, the restoration process will be a labor of love from start to finish. Such is the case with Christensen, who said, “I’m lucky in that I both love Corvettes of any kind and they have a great resale value due to their popularity and availability for parts and service nationwide.”
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Look for Cars in Good to Very Good Condition
Daniel Haas at DH Automotive, a restoration and collision center, suggested getting a car that’s 90% “there” as far as condition is concerned, because you don’t want to spend too much money on too many repairs that will kill your profit upon resell.
Christensen agreed that condition is crucial. “It’s best to start with a car that has good to very good condition evaluation for optimized ROI (return on investment),” she said. “These require little work and have a higher return.”
Major structural repairs can be very costly, so make sure to focus on cars that don’t need extensive structural repairs and that have minimal rust or body damage. However, mechanical problems can quickly erase any potential profit, so pays to know what you’re looking for and how much replacing or rehabbing internal parts and auto systems will cost.
Do Your Homework
Although Christensen said, “Those elusive ‘barn finds’ are the best restoration-to-value bets,” underpriced and neglected vehicles can be found anywhere — at auctions, through networking with car enthusiasts and via online listings and forums. But the amount of money you make selling a rehabilitated used car is intrinsically tied to what you’ve learned.
“Checking and researching the resale value online is part of the strategy, as well as the state of the vehicle,” Christensen added. The more information you gather about your new hobby or business, the easier it will be to assess a car’s overall needs and price out as much as possible before you dive wallet-first into a restoration.
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