The key to being able to successfully ‘flip’ a vehicle is being able to buy the vehicle for the right amount in the first place, this allows you a Pre-built buffer in the price to be able to drive, enjoy and sell it the vehicle at no loss and in an ideal scenario make money!
We cannot stress enough that ‘ You make your money when you buy the vehicle not when you sell it’.
There are a multitude of reasons why a seller would want to sell a vehicle for cheap, below market value or even for wholesale price, below we go through a few reasons as to why this would happen.
This can work for both Cars being sold at dealerships and cars being sold privately, lets cover both of these individually
Convenience is one of the major reasons people tend to purchase cars through dealerships, some buyers may prefer newer vehicles, or prefer the option of financing and having all the paperwork being taken care of. This is not our preferred recommendation on finding bargains as dealers are simply not in the game of giving away cars for cheap, however they do have guidelines they want to adhere to and targets they need to meet
Cars Not Normally Kept by the Dealer
By this we typically mean other peoples trade in cars, so for example an Audi Dealership may be selling a Jaguar, this is something they quite obviously don’t sell on a regular basis or know how to sell,which means they would like it gone ASAP.
This presents a unique opportunity for you to purchase the particular car at a discounted rate.
This can also work in the opposite way where a high end exotic car Dealership are selling at £10,000 used car they received in a trade in, again they don’t particularly want it and don’t want it hanging around too long cramping there style. You need to able to spot these clues and begin to monitor them.
Floor Plans And Stock Rotation
The majority of dealerships tend to work on Floor plan model which means they want stock in and out of the showroom as quick as possible, some dealers work to a 30, 60 or 90 day rule which means that a car must be gone one way or the other by the end of their defined period. If a car tends to sit and start entering the ‘danger zone’ meaning the last few days of the time it is allowed to be on the showroom floor, the dealership is much more likely to cut a deal with you, the alternative for them is to ship the car off to another dealer at wholesale price, or take a punt with it at auction.
Remember to use our guide on how to value a car properly in order to determine what price you should be looking to pay for the car you have in mind.
End of the month Specials
A large number of dealerships are judged by monthly sales figures, and as the month draws to an end dealerships are more likely to begin cutting deals in a bid to boost their figures for that particular month, using the three methods we have listed in combination could land you a great deal direct from a dealership.
2. Private Sellers
Its technically easier to spot a desperate private seller and easier to negotiate with them over a dealership, however you need to know where to look.
We never encourage any kind of unethical deal types where is seems that you are taking advantage of a person’s situation, we always encourage that you come from the angle of looking to solve someone’s problem and getting yourself a great deal in the process.
Here are some of the top reasons someone may wish to sell there car for cheap.
Car Needing Repair
The average car owner has little to no mechanic knowledge and is completely reliant on a garage to diagnose and fix the issue, the issue becomes when garages especially franchised dealers begin to quote astronomical prices in order to carry out repairs. This can lead to the knock on effect of the seller having had ‘enough’ and wanting to get rid of the car. The key here would be to determine exactly what is wrong with the car and then figuring out where to get it fixed for a lot cheaper (Independent specialists are a good place to start). If you are handy with the tools you may be able to get the car up and running again for pennies in turn turning it into huge profit on the back end. Be careful not to bite off more than you can chew! Some sellers will downplay the actual issues with the car you may find your quickly in over your head.
New Car Purchased
The usual scenario here is that the seller either already has purchased a new car or one is about to arrive imminently hence they need the old one gone. The majority of sellers will probably have already determined what the ‘trade in’ value of their car is and probably don’t like the sound of the figure that has been offered by the dealer or We Buy Any Car. The seller more than likely thinks they can do a better job of selling their car themselves. Your job here is to be alert to the fact that they will sooner or later need this car gone to free up both cash and space! You should identify what the trade value of the car is (You can use our guide on how to do this here) and then offer a proposal as close as possible to this figure. Remember the longer their cars sits on their drive unused the more desperate they get, monitor the situation and follow up with them at regular intervals.
This relates to Sellers who have paid additional money to highlight their cars on classified sites such as Gumtree and Autotrader. If we think about this concept for a second, a seller has decided to pay EXTRA in order to make sure people see their car which in our view screams desperation and a need to sell urgently.
The Savvy buyer should be making a note of this and trying to identify why they need to sell and offer a proposal to land yourself a great deal, after all they seller won’t keep wanting to pay additional money to keep highlighting their cars again an again.
Sellers more then often add in certain keywords in their adverts which highlights their desperation to sell even when they are trying hard not to! Searching for these specific keywords in the search bar of these classified sites can bring up these specific adverts allowing you to investigate further
Try the following keywords in the search bar to see what hidden gems you can uncover:
‘New Car Purchased’
This list is not exhaustive and you should try a variation of the terms which may bring up differing results.
We hope this article makes you start to understand the psychology of some of the sellers, once you are able to identify ‘pain points’ of why people are looking to sell you can then use this to your advantage to pick up some great deals for ‘flipping’ or even keeping for yourself.