I have always felt that buying and selling cars for profit is one of the few true recession proof businesses.
And in spite of the current economic BS — I still feel that way.
How come?
Because (and I know I’m really simplifying things here) you have three kinds of used car buyers…
1) You have the truly rich guy that buys high-end exotic used cars. This economic stuff doesn’t touch them to the point where they even think about whether to buy that vintage Ferrari or not. In fact, for people in this strata, this is the BEST time to buy because its a buyers market and the good deals are just going off right now. Yeah sure, think about all those fake rich people that had some decent cash flow but were living way beyond their means because their focus was on impressing everyone with flashy cars and homes, etc. You don’t think there are a whole bunch of serious “Don’t Wanters” in that crowd that need to bail out of everything that raised them to a higher level of poverty?
2) The next bunch of used car buyers are the kind that buy “normal” used cars in the maybe five, six, seven thousand dollar and above price range. This is purely speculation on my part, and I always welcome your feedback if you disagree, but I strongly suspect that this crowd has probably postponed buying a used car for now. Why? Because they have immersed themselves in all the bad news about the economy and are concerned about their job and buying a “nice” used car just isn’t on their mind right now.
3) The third bunch of used car buyers are looking in the several hundred, to three thousand…to maaaaybe as high as five thousand dollars. I really think this is the crowd to focus on guys. These people have the money to easily cash you out because the dollar amount is still low enough that they can borrow it from family or friends, or pull the cash out of their credit card. These are the used car buyers that never really go away…even when the world is falling apart around them. Why? Because, especially in the really “cheap” price range ($500 to $3000), these people buy used cars to satisfy basic transportation needs and anything beyond that is a bonus.
There are two sides to every story — even when, and especially when it comes to the economy. O
Cash is always king, and especially when its tight, so for the individual that has it, the deals and opportunities are out there to pick and choose from like ripe fruit falling from the tree’s.
Steve
Please leave your comments below.
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Steve you are very right – even in MI where everyone thinks economy is dead, people buy cars up to $6000.00 and they do pay CASH! But selling $8K car is a totally diff. story
Steve- Haven’t written in a while, but the $1500 to $5000 range is where we’re at ;and the range works! After 9 months, 55 cars sold on a little lot in central Vt.(Despite my stupidity and mechanical ineptitude).
@Don: Good deal Don! Glad to read that you are making money buying and selling cars. Its also good to get confirmation of the target price range I discussed in my post here. Have sales slowed down for you a lot since the economy went south?
Thanks for checking in and keep in touch.
Steve
Hi Yev,
Wow, thats awesome that Michigan is still cranking for you because that is the one part of this country where the economy was supposed to be as dead as it can get. I read about how they were auctioning houses in Detroit for something like $15,000.00…and that was over a year ago! Can’t imagine what is going on there now with the Wall Street meltdown and talk of GM going down the tubes. But that is great that YOU are making money. Interesting about the $8000.00 barrier too, but not surprised at that either.
Keep in touch Yev.
P.S. Yev, weren’t you the one that called me a couple months ago to tell me that U.S. made cars were still preferred over “foreign” cars in your area?
Hi,
I bet those who read your post definitely likes to make the most of the car deals available. But, jokes apart, this surely is the right time to invest on a car.
-Nancy
Steve,
I stumbled across you ebook and blog while doing research into selling used cars. I’m impressed with your marketing and especially this blog which drives home that you really are in the biz and willing to help/mentor others. I haven’t bought your book yet but I intend to.
Can you recommend other blogs that may be along the lines of this one where amateur/small business people can network and get insider tips?
In addition it looks like someone is spamming your comments section.
All the best,
Phil
@Phil:
Hi Phil,
I don’t know of anything like that but I’m sure there are many. Just do a Google search for something like “small business blog” (or forums) without the quotes, or use any relevant search terms you can think of.
Thanks for the heads up on the spam Phil!
Steve
Hey Steve,
It’s been a few months. I haven’t seen any posts for a while. Are you still in the car business?
Hope that all is well.
Phil
Yes I’m still around Phil. I’m still alive and well and just made a new post here…
http://www.buy-and-sell-cars-for-profit.com/blog/car-dealers-stop-selling-new-cars/
Thanks for checking in! :-)
Steve
Hi Steve, always a pleasure reading your blog. You mention several price ranges to sell cars. I want to focus on the $500-$3000 range. Usually these cars are not in the best mechanical condition. Want you have a bad reputation in the community selling these cars,? Do you have a strict selection process that will not have you in the “bad” taste section of town? Thank you for all you do.
Andrew.
Hi Steve, not sure if my e-mail got to you. Do you think selling $500-$3000 cars will ruin your reputation for selling dependable cars? Do you have a really strict selection process of these cars? Thank you for your response.
Andrew.
Hi Andrew,
I mention cars in the cheap range only because they are so easy to sell and because its easy to get cashed out. You should be okay selling cheap cars as long as you are very clear with your buyers about the condition of the vehicles you are selling as I discuss often in The Lazy Way To Buy And Sell Cars For Profit. That means no holding back on something that you feel (or know) is going to cost them an arm and a leg soon. Yes of course you will be blowing off potential buyers, but your integrity is worth more than that and its just not worth the hassles and bad vibes.
As far as what litmus test I would use to NOT sell a car to someone…
Well, I did it once even though I was totally honest with the buyer and learned my lesson, but I would not sell a car that I suspect or know to have lower engine issues (or a tranny rebuild) unless I knew that my buyer was fully aware of the problem and had the skills to fix it themselves, or at least knew how expensive a full re-build would cost them…and was open and willing to have to pay for that.
Anything else? :-)
Steve
http://www.Buy-And-Sell-Cars-For-Profit.com
Thank you for the reply. Integrity is one of my watch words. Up front information is the ony way to go. I will be in touch.
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