Here’s why I say, stay away from the auto auctions and start small from home if you’re totally new to this: …but if you’re not a beginner, then auctions can be a great place to get deals. Here are a few pros when starting small from home. You’ll have very low to no overhead costs when you start from home. You can take your time and complete one successful flip, learn the game, start making an immediate $1,000-$2,000 a month just by flipping one car a month.If you think about it, that’s a nice extra stream of income and it’s very easy to do. As you start to gain experience at finding deals and you’re learning how to buy right, you’ll automatically get better at your negotiation tactics as they start to come more naturally to you. Then you can try to flip two or three cars a month, maybe even move to one or two cars a week while profiting $1,000-$2,000 each. It is not a hard or far-out goal to achieve at all. This is how the most successful ethical dealers become dealers.They start small from home at first. They learn how to buy good cars and learn negotiating. I have many friends that are auto dealers and that’s how they did it. They started small. Unfortunately, because of this new world and new economy, one of them is out of business working for another car dealer because his huge inventory and high overhead costs just ate him up. The other is struggling to just pay the rent and to keep the doors open. The reason why I think auto auctions are not your best bet (if you’re a newbie) is, because you’ll have many costly overhead fees.Why put yourself in another rat race situation if you don’t have to? Not only will you incur costly auction membership fees, but most auctions will hit you with buyer fees, pull-out fees and taxes which can add up to 10% – 15% of the bid price. Again, there are many newbies hitting this market thinking that they know how to properly buy and sell cars, but in reality they don’t know how to properly buy right. They get into these auto auctions all hyped-up without a clue in mind. They bid the prices up cutting everybody’s margin down to almost nothing! This is the cut-throat style of buying cars from public auto auctions.
Back in 2000–2004, you were able to buy many cars for hundreds of dollars each and you had a realistic and easy $1,500–$5,000 profit margin per vehicle. Back when there was no competition. I’m talking about buying a 1996-1998 Mazda Miata for $300 – $500 and with just a wash and quick detail, it brought you in a quick $3,000. And the best part was, you only had a few people bidding for each car. Maybe 2 or 3 people and you knew them! You would hook each other up and just give and take
. “You take that and I’ll take this one. Cool?”…”Yeah, sounds good!” Fast forward into 2010-2015, you have over 150 people at these auctions, and not to mention the online bidding services that have incorporated into the system which allows bidders bidding from across the whole nation. This means that you’re not only competing with local bidders on the floor, but you’re also competing with bidders across the whole nation. This is why you have the advantage of starting small from home and still make a killing!When buying cars at auctions (if you’re not a dealer), the vehicle must go into your name first before you can actually sell it. That’s another negative aspect to auction-buying. They limit your inspection time per car and you can’t personally check the car out or look at the engine before buying the vehicle. This wasn’t the case back in the day. This is for “IAAI” Auctions in Hawaii. The only time you can look at the car is when the drive through is active. Then you have 20–50 people scrambling all over the car driving the bid prices up and the worse part is that you don’t really know what you’re getting yourself into.You start bidding on forced hype. Never fall for forced hype bidding. Always keep your cool. Get good at knowing what you can get for the car and figuring out how much is needed to get it ready for sale before or while you are bidding. Once you get that down, the world is your oyster. That’s why if you decide to get into auction lot bidding, be sure to have your physical car Blue Book guide. It will be much faster to research prices.This has been true for the auctions that I’ve been involved with. Other auctions may have fewer fees and fewer people bidding on cars. Again, just because I don’t buy cars from auctions like I used to doesn’t mean that they’re not an excellent source for getting super steals. Just make sure you know what you are bidding on and always refer to the PME.
Let’s say the Trade-In Dealer Value on a 2008 Honda Accord LX Standard sedan with 70,000 miles is $8,000. Depending on the condition of the car and how much work is needed, I would start a bid at 40-50% of the value ($4,000) and also to keep in mind what the Dealer Excellent condition value is ($9,500) and Private Party Good is at ($9,995) And Excellent Private Party is at ($10,670).I know that I can very easily blow out the car for a competitive price at around $9,000–$10,500…making a few thousand dollars of profit instantly if I got it for around $6,000 plus repairs needed, say maybe $1,000 for repairs. My total investment would be $7,000, then try to blow it out for $9,000 and change. Sometimes, you’ll be able to get slightly body damage cars like this in the same year range for $3,000-$4,000. A lot lower than you think. But you’ll have the repair investment to consider.Try to calculate selling most of your cars in the range of $300–$1,000 below the Pvt-Party Excellent value and you should be able to move them pretty fast. The same bidding would apply when buying from a private party person. I will go over this in detail in my video and audio trainings for you, so no worries. 🙂 I like to try to get the car for $200 minimal below the Lowest Trade-In value. Sometimes right at it or a few hundred more. It all depends.When using proper negotiating tactics, you can easily drop the price with novice private party sellers. I have gotten used cars from private party sellers for 50% below the Trade-In value. That’s when you know you’ll have instant profit when buying. If unable to get it below the Trade-In Value, just go back to the PME tactic and see what your profit margin is. If you see that you can still make money and the car is a hot seller, go for it.
Here are a few references for auto auctions and Dealers Licenses if you want to buy at public auctions or become a dealer. AUTO AUCTIONS
If you’re looking for auto dealership license information, please read the Bonus Materials that were given to you from inside of the Members Area which will contain: BONUS MATERIAL FOR DEALERS. Auto Dealer Licensing Requirements in All 50 States and How to Get a Dealer License.
If you want to go all out and become a licensed dealer, then my trusted friend who actually successfully does this for a living put together a guide that even the pros use. By using this strategy, you’ll skip the costly fees and headaches by going at it the traditional way.
You can learn more about that guide here: http://www.getyourdealerslicense.com I’ve partnered with him to get the word out on that awesome manual and you can grab it at a discount if you haven’t yet already done so. Again, if you want to go the dealer route or work it in combination with what you have going now, and save on costly fees, getting a lot and paying costly insurance fees, this is the way to go 100%: http://www.getyourdealerslicense.com
See you in the next chapter!