Flipping cars has been a side hustle for years as a way to make a little extra cash. But in an era of rising used car prices and online vehicle ordering, the game has changed — and the profits are much higher.
Here’s how car flipping works: A person orders an in-demand vehicle from the factory at a fixed price. When it arrives months later, the vehicle’s value rises; because of the current car market, it can be sold at a profit.
Yes, there are related fees — sales tax and registration — and it can be risky, as you can’t guarantee the price will increase after you have the car. But it’s become so popular that it’s caught the attention of carmakers, which are trying to clamp down on the practice.
For instance, the Ford F-150 Lightning, a truck that sold out before production started, comes with an agreement stating that the buyer won’t resell the truck for at least a year (this additional agreement is included at the dealer’s discretion), as reported by car news website Carscoops. And, GM will cancel the warranty on the popular Chevrolet Corvette Z06 if it’s resold in less than a year, according to auto site Jalopnik.
A modern way to buy new cars
The trend these days is for highly anticipated models to be ordered online and built to the buyer’s specifications. Buyers will have to put down a deposit, usually only a few hundred dollars, and they can decline the car later if they change their mind.
Electric cars and hot new models, such as the Corvette Z06 or Cadillac Escalade-V, are the prime target of flippers because the rollout is slow and inventories are limited.
While some buy a car with the intention of reselling it, that’s not the case for all car buyers. Sometimes the idea of flipping a vehicle occurs to an owner because they see car prices climbing and figure, well, why not?
Kirk Dunn, a Long Beach, California, contractor took advantage of both kinds of flipping. He saw the value of his Chevrolet Silverado pickup increase so much he sold it to Carvana for a $3,500 profit. Over the following months, the market stayed hot, allowing him to purchase two new trucks, then flip them at a profit and enjoy driving newer and better models.
“I can’t even tell you how many hours I spent negotiating and researching,” he says. “But it was a game and kind of fun.”</…….