How To Make Money With Cars
In most places, you must have a license to sell Automobiles. Since getting this license can cost you a good deal of time and money, I suggest that you do not buy & sell automobiles personally more than a once in a while. That sounds like I have put you out of business before you started, but actually, this license fact can make you rich. If you got a Dealer’s License and a rented a car lot, you would be just another Used Car Dealer. The sellers wouldn’t want to deal with you, and many buyers would judge you to be a crook-like all other Used Car Dealers!
What Do You Sell, if you don’t sell cars? Simple! you sell space—a Comfort Zone that brings prospective buyers into contact with the individual owner/sellers.
In order to bring prospective buyers to see the cars on display at your rented parking lot, put up notices and run classified ads, something like this:
“USED CARS For Sale By Owners. Big Variety. See them all on display Sunday at (lot address)”
You will set up a physical space where people can trade. Kind of like a stock exchange. But it will be a place to trade in cars. Is this a new idea? Not exactly. Livestock markets for horses, cows, chickens, goats, flowers, etc have been going on for centuries. You can use this idea to set up a space where anything – not just cars can be traded. Our experience however, is that it is usually best to specialize.
Once you get a few cars on your lot, you will have people stopping every Sunday to look at cars. Put a sign up, telling the people to:
“LOOK AROUND No salesman will pester you. – Test-drive the cars you like. Buy direct from the Owner. NO Sales Agents or Commissions to pay. If you want to display your car For Sale on our lot every Sunday from 9am to 7pm, call 1234-5678.”
It won’t be long before your lot will be full of cars and people looking at them. After just a short time, it will become the place to go looking for a good Used Car, in your area. Fifty (50) Cars, at only $20 per Sunday, every weekend, will bring in $1,000 per week for you. Your costs of advertising and lot rent will probably be nominal or very low. You will make a profit whether the cars sell or not; with very little work. You need to have the car-price magazine (Argus in Europe) that shows the wholesale and retail prices of most cars, so that buyers and sellers can check with you (for free) to make sure they are making a good deal.
In order to get use of your lot, you might offer the property owner a donation to his favorite charity, or a percentage of your gross instead of a flat monthly rental, until the display lot proves profitable.
NOTE: A friend rents unused space on the parking lots at closed supermarkets or shopping centers on the weekends. He uses colored balloons, cheery recorded music, bright colored flags and tape with signs on each corner– to mark his space. Charges: Sellers pay $20 for the day. Placard Advertises “CARS For Sale By Owners Sunday only 9 a.m. to 7 p.m. – (name & location of the shopping center)” He even has a Finance Company agent on hand to offer ‘financing’ for the cars – You can get a ‘commission’ on each car they finance. A car inspection outfit will also be happy to pay you a fee for being able to set up their testing equipment on your lot every Sunday. Most buyers or sellers will use this service.
ADDITIONAL REVENUE: You can offer the seller/owner a clean-up service for his car. Charge him or her about half the going rate in your area (check with the “car detailers” in your area) to wax & shine the car, vacuum, and generally clean up cars for display. Hire high-school kids to do the actual work for 50% or let the local Boy Scout Troup, or some other group, do it as their fund raising project.
You can reduce your Advertising cost by setting up a contract with local Newspapers to your classified ads every day for a set amount per month.
In the beginning, you can let Used Car Dealers set some of their cars on your lot if they pay your price using their personal name and home phone number (not their business number) in the window of the car.
Warning do not, get involved in the sales of the cars. If you do, you might be breaking the law unless you get a Dealer’s License.
Do not have an office on the lot. Let your signs (or sellers who want to hang around all day) tell the prospective buyers what to do. Also, notify the Police so they can show up with a squad car once in a while to keep order and deter any vandals or bad guys. Later you might wish to hire a relative to walk around- dressed as a security guard.
Keeping with my philosophy of not doing anything that you can get someone else to do for you: Get someone to answer the phone calls, collect the “rents” and get the needed one sentence Rental Agreements signed, etc. Pay them 25% of what they take in. You’ll still make a bundle.
After you get your first lot operating, why not set up similar lots in different neighborhoods or surrounding towns. – Its an easy way to compound your earnings.
Guest post by W.G. Hill author of P.T.O.O. 2020 - Portable Trades & Offshore Opportunities