How I Made $ 100k at Car Auctions

In 2002 I had no money but needed a new car badly. I spent months researching Auctions cars and finally found some in my area. I bought a 1997 Jeep Cherokee with 90k miles for $ 4500. There was an almost identical model on eBay with a starting price of $ 10k. Then I saw the opportunity to make some money from this company … So a month later I bought a 1999 Impala with 40k miles for $ 4,300 and sold it after 2 weeks on Craigslist for $ 7,900. After I was hooked. Now I'm flipping over 10 cars a month for about $ 1,500 profit each.

Of late I have been receiving numerous phone calls and even emails from around the world want to know how to earn extra money by buying and selling cars so I've created this guide on getting started (Check out my website for more).

Like any other business, make money buying and selling cars is not necessarily as easy as you think and can not be explained through a phone call or even email. I could fill pages 1000 tips tricks and methods for the successful purchase of car auctions and I some point I could … but for now I can offer some key points to start and answer some of the most important questions there.

I bought a lot of ebooks out there and all gave good advice about how to buy car auctions, but that is all. I was paying $ 19 – $ 30 for a guide that does not actually list any of the auctions must be purchased. So I started to compile a list of list of every single car auction by the state and agency … (My site).

What made me choose this business:

The main reason and important that I chose this business I was looking for a way to generate sustainable passive income. There are great deals on so many auctions but the vast majority of the population never know.

I also know that car market is HUGE. Almost everyone who owns a car these days buys a different car every 5 years or less. There is absolutely no doubt about the size of automobiles and consumer demand. There is always demand a good deal on a good car – even if is a leading, remember, someone will pay for it. One good thing about a tough economy is that many people will be looking for someone who can give them a good bid on a car.

The first step is to find a list of auctions in your area. Many counties have police auctions every month. Note – some of these auctions require a dealer's license so you want to check it early. (Find a list www.officialgovernmentgrants.com )

Once you find an auction, get a supply list of vehicles for auction. For example, in a recent auction in my area there are 3 cars that I have my interest:

– 2001 black Honda Accord with a little over 37k miles on it.
– 2003 white Chevy Impala with 90k miles on it.
– 2003 Ford F-150 gray pickup with 67k miles on it.

All three of these cars are the most popular models under 100k miles and good colors (although I'm not crazy about the white Impala, is actually a very popular color).

There is very little information other than the image. The Impala and the F150 is likely government vehicles and Honda was probably an attack (In the photo also appears that there are some "modifications ground effects" – probably a drug dealer).

The Impala has almost 100 thousand miles the but the good news is that government vehicles are generally very well maintained which should help them sell faster. These are all examples of good cars try and buy at auction.

Now we have to calculate the quantity supplied in each of these. At this point it is worth discussing some of the different auction formats. Many government auctions are 'sealed bid, "which means to send an offer with other people without seeing what their bids are. Then, win the bid over high. These auctions are tougher for obvious reasons.

The other type of auction are what is known as the standard Dutch auction "in which the bid starts a price determined by the various bidders offer higher prices until the car is sold. Unfortunately, this auction is a "sealed bid auction 'and I have to really do my homework.

The trick with auctions 'sealed bid' is that you must submit an offer that is low enough to obtain a benefit, but high enough to win the car. In recent years, some auctions are becoming more popular with what I call the "buyer fans. These are the people who supply more than the car is really worth. They won the car, but you take a perfectly good opportunity to make money away from you in the process.

Normally, in a "sealed bid auction" I start with the Kelley Blue Book value to get a general idea of prices. Keep mind – this is really just a quick point. What I really want to know is what dealers are paying for these vehicles. Dealers are paying a price for profit – and that's what you want to pay … because that means you'll be a decent profit.

How do I find out? Call Loan Department a local bank and ask for the Manheim Market Report (MMR) price. Most banks have subscriptions to these data that will tell you the average prices of vehicles Similar have been selling for at auctions.

So for the 3 cars I'm interested in the prices of MMR as follows:

2001 Honda Accord EX black with 37k miles: $ 7,630
2003 white Chevy Impala with 90k miles: $ 1,950
2003 gray Ford F-150 pickup with 67k: $ 4,100

However, as the Honda Accord is a popular model and this is not a "public vehicle" and seems to have had some upgrades (ground effects) – this car will probably receive bids in the range of $ 8000. A quick look at eBay Motors or craigslist http://cars.com tells me that at that price I will not make a profit. I can make an offer of $ 7,000 anyway.

The Impala looks like my best bet to make a profit. Although it has 90k miles on it, which is still below the important 100k threshold and because it is a "public" most likely vehicle in very good condition and will not be getting as much interest as the Honda Accord. And – there is always demand for Impalas believe it or not. These are great 'functional' vehicles for people looking for cheap reliable transportation -. I find no compositions Craigslist similar, but a quick search on Ebay motors and shows several compositions http://autotrader.com selling between 2.5k-4k. This is great news. I put in an offer of $ 1,500. If I can get my full offer and then sell it for 3k then I have made an easy $ 1,400 (A buyers premium of between 6% -10% on all auctions.)

The 2003 F-150 also looks like a decent money maker if I can get a good price. Autotrader and Ebay show compositions between 6k-10k. I put in a bid of 4k for it.

The only good thing about auctions 'sealed bid' is that I know emotion will not force me to bid more than I want. I have already determined my ideal acquisition price and the presentation of the offer. Now all you have to do is wait and see if I get 'lucky'.

One thing that did not go over the site inspection. The auction site is necessary to tell you if they know of any problem with the vehicle (ie transmission was replaced, etc.) Moreover, usually book a weekend day to visit the car and visually inspect them – you can not start the engine or enter but can search for any external damage indicators. In addition, the auction site will have each vehicle VIN number. Because the auction prices for these three are relatively low and the Impala and F150 are 'government vehicles, I'm forgoing the inspection process. Note: Not recommended to do so without due diligence … especially when you are starting. But once you feel comfortable with the process and have bought and sold some cars will know the level of due diligence should be done.

A final question is whether or not you need a dealer license to sell these cars. The rules differ by state. For example, Florida is 3, in New York is 6, in Ohio is 5, etc. Many people fix it by selling some on behalf of a spouse or a sibling, parent, whatever.
The conclusion is that they can sell easily a dozen cars before they must obtain a dealer license in any case.

Well, I hope this has helped learn a little about how to do a few thousand dollars in their local car auctions. For me it began as a search for a new car and now it's replaced my day job. All it takes is a little of time and research … www.OfficialGovernmentGrants.com is a good resource to start …

About the Author

Chris Chamberlain started visiting public car auctions a few years ago in hopes of finding a good deal. Now he has his dealer license in 5 states and flips over 10 cars a month for around $1,500 profit each. Visit http://ezinearticles.com/?How-to-Really-Get-Government-Grants&id=732569

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