It’s true! If you love cars, motorcycles, trucks, SUVs and RVs, you can make lots of money selling these vehicles for others. Why would anyone want your services? Consider these situations...
• The seller lives in a very small town with a limited market. If you live in Eustace, Texas which has a population of 350, the market for that Ferrari may be rather limited.
• The seller isn’t online and never will be. Therefore, they don’t know about Internet auctions or the other car sites.• The owner inherited the car when his parents died. The vehicle is in Oklahoma and the heir is in New York.
• There are personal reasons. One truck owner was so furious at the only Ford dealer in town that he said he would set his Pick-up on fire before he would let them have it! Or there are people who have no strategy other than to put their cars in the paper and cross their fingers.
The question is how do you find these vehicles? Obviously, you don’t want to talk to the dealers. You are interested in individuals, not professionals. So take your detective skills and search...
1) Newspapers and Specialty Magazines -- Be a regular subscriber to all your local newspapers. The specialty papers are even better, like the “Auto Trader” or the “Advertiser” magazines in your area. Many of the ads in these publications are from dealers but many are private individuals and those are the kind that you want. Create a master list and follow up with these folks.
For example, you see a new Ferrari ad in the Advertiser. Don’t bother calling a new ad because sellers are in a state of glowing optimism when they first begin an ad. They expect the phone to ring night and day. Three weeks or a month later, however, their attitude will be different if the car hasn’t sold. All you need to do is call the owner and ask politely if the car has been purchased. If it hasn’t sold, it’s negotiation time.
Rule of thumb -- always, always pursue a lead. Even if the owner doesn’t want your help now, he may change his tune in another few weeks. Persistence is the key to success.
Many people don’t trust the professionals, especially car dealers. They fear they are about to be scammed. If you come across as “good ole Joe,” you may get more business than you can handle.
2) Your own locale -- The second best approach is to pay attention as you drive around. Private citizens park cars in mall parking lots, on busy streets and all kinds of public and private spots with “For Sale By Owner” signs on them. These are often fabulous deals.
I always have a small tape recorder in my car. In this way, when I see something that seems promising, I can make sure I have the number. The backs of napkins don’t work as well. In addition, ideas and notions seem to strike at very inconvenient times -- like when I am driving down the expressway in rush hour.
3) Car auctions -- In our area, there is a weekly car auction that is available to the general public. Most car auctions are reserved for licensed dealers. Consider becoming one.
4) Organizations -- Most people are members of particular organizations. Take advantage of this by letting people know what you do. Use the newsletters, bulletin boards or even company events to let folks know that you have a sideline, or a full time, business disposing of unwanted vehicles. This isn’t nearly as quick or direct as calling people but it is often easier because of your good reputation. That is if you have one, of course!
5) Ads -- You can put your own ads in papers and magazines or on your Web site to let prospective sellers know what you do. The effectiveness of this may depend on where you live and the economic conditions of your area.
One enterprising person in my city has printed signs advertising that he buys cars for cash, on the spot. He puts them on telephone poles and in vacant lots. (Before you do this, check the sign ordinances where you live. It is illegal in our area but people do it anyway. A big fine is not worth it.)
So what kind of vehicles should you look for? Don’t bother with cheap ones. There isn’t enough profit.
... straight at expensive cars. Look at this auction listing...
Amazing, isn’t it? 37 people bid this much money for a vehicle they have not even seen!
How do you deal with the owners? When you call the owner of a vehicle, you want to convince him that you are the answer to his problem -- i.e., you can dispose of his unwanted property.
But before you call, you had better have a strategy in mind. The question he will be asking himself is... “What’s in it for me?” If you don’t have a clear and persuasive answer, you won’t be auctioning his property.
Your strategy might involve...1) An Option -- An option is simply the right but not the obligation to buy at a certain price.
If you know a car is worth $50,000 and the owner is willing to sell for $38,000, bargain for an option for $36,000. You may not get it but you can try. Even at $38,000 it may be a good deal. Then simply auction the car for $39,000 or $39,500 or whatever profit you wish to make.
The great thing about options is that if the car doesn’t sell, you are under no legal obligation whatsoever. In addition, set up your option for a relatively short duration. You will quickly know if you are going to get your price.
Here is a sample option agreement. The laws of every state and province are different so if you are going to use an option agreement, check with an attorney.
This is a sample only. It is not meant as legal advice in any way...OPTION TO PURCHASE
WITNESSETH that the Optionor, for and in consideration of the sum of ______ Dollars ($_____), to him in hand paid by the Optionee, receipt of which is hereby acknowledged, does here give and grant unto the Optionee, his heirs, assigns or representatives, the exclusive right and option to purchase all of that certain vehicle located in the City of _______________________, County of _________, State/Province of ________________________, being known as and more particularly described as follows:
The terms and conditions of this option are as follows:2) Exercise of option. At any time during the option period, Optionee may exercise this option by hand delivery or deposit of written notice by certified or registered mail, return receipt requested, to Optionor at the following address: _____________________________________________________________
3) Agreement Upon Exercise of Option. Upon exercise, the terms of purchase and sale shall be:6) Attorney Fees. The prevailing party shall be entitled to all costs incurred in connection with any legal action brought by either party to enforce the terms hereof or relating to the optioned property, including reasonable attorney fees. 7) Right to Sell. Optionor warrants to Optionee that Optionor has the legal right to sell optioned property under the terms and conditions of this agreement.
8) Other Terms and Conditions.- - - - - - - - - - - - - - - - Optionor
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- - - - - - - - - - - - - - - - - - - - Optionee
- - - - - - - - - - - - - - - - Address
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personally appeared before me this day and acknowledge the execution of the foregoing instrument. Witness my hand and official stamp or seal, this ____ day of _________, 20___.
My commission expires: _______________The Optionor is the seller. The Optionee is you, the auction master.
Most, if not all, localities require that actual money be exchanged in the execution of an auction. I commonly give a seller $1, just to make it a binding agreement.
2) A Commission -- You offer to sell a vehicle for a pre-determined commission. A commission of 5% to 10% is common. I would not do any work to sell a vehicle unless I had our agreement in writing.
3) Higher Price -- You can choose to raise the price of the vehicle. If the present owner will accept $15,000, begin the auction at $15,500.
There are auction sellers who are very secretive with the owner. You may not want to disclose your actual profit but I believe that it is best to be very open about what you are doing. After all, the owner cannot realistically expect you to work for free. Whenever you deal with an owner, point out to him that you are risking your time and expertise. If he doesn’t get paid, you don’t either. In short, he has everything to gain -- a sold car or truck.
What’s the insertion fee payment to list your ad? It varies. There is usually a sale fee as well but that’s not a problem. The sale money will more than compensate for this charge. The insertion fee, however, could be a loss out of your pocket if the car doesn’t sell. Are you going to assume the risk or is the seller going to give you this fee?
That is a judgment call for each individual. If I were selling cars, I would let it be a case-by-case issue. If the deal was really great, and I felt confident, I would assume the risk rather than lose the deal. If it is marginal, I probably wouldn’t.
How do you learn the transportation business? Personally, all I know about cars is that I like to drive a nice one. However, I know some people in this business and they have recommended the following sources...
http://www.autobytel.com/
Besides cars, there are mini vans, SUVs, RVs, motorcycles, ATVs, buses, motor coaches, commercial trucks, snowmobiles, campers, scooters, mini bikes, farm vehicles, construction vehicles, farm equipment, boats and planes to sell in exactly the same manner. It truly is a gigantic playing field.
In addition, there are all kinds of parts, automobilia and toys.Two examples...
And...
I think we can safely assume that there is money to be made in toys. But look at that “cool.” It’s too cool!
