Starting Your Own Business with Salvage Cars

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The salvage car industry is growing, and with the help of brokers like AutoBidMaster, salvage vehicles are more accessible to the public than ever. With over 180,000 vehicles in our inventory, you’ve got a lot to choose from. There’s more to salvage car auctions than just scoring a great ride for yourself, though: the salvage industry is riddled with opportunity. From starting your own rental service to flipping cars for a living, there are lots of options for you to explore. In this post, we’re giving you some tips on how to start flipping cars for a living.

Learn the rules, and follow them

If you’re interested in flipping cars for a living, you gotta do it right. There are laws you need to follow that vary from state to state that will protect both you and your clientele. States have varying limitations on how many vehicles you can buy and sell. Oregon, where we’re headquartered for example, limits individuals from selling more than 5 vehicles in one calendar year, unless they can prove that the vehicles were “primarily for personal, family, or household purposes or for other purposes that the Department of Transportation, by rule, defines as constituting an exemption under this section.” Otherwise, you’d need to get a dealer license. Selling more cars than you’re allowed to without a license to do so can result in some pretty hefty fines or even jail time.

So, it’s decision making time: do you wanna flip a few cars a year to turn over a small profit on the side, or do you want to make it a full time job? However you do it, make sure you comply with all state laws and regulations to protect yourself and anybody you do business with.

Explore the market in your area

Different places have different needs. If you live in a rural area, focusing on trucks, SUVs, and vehicles with towing capability may suit your market. If you live in a city, then smaller, reliable commuter cars may be in higher demand.

Spend some time at local auto auctions or just browsing your city’s classifieds to see what people are buying and selling to help inform your decision. Talk to local car clubs and see if they have a necessity for parts for their vehicles regularly. If they do, you can use leftover parts from salvage cars to recuperate some of your costs.

Choose a specific vehicle type

It can be helpful to focus on a specific type of car. That way, you can focus on forming relationships with suppliers and mechanics that specialize in that kind of car as well. You can choose to focus specifically on classic cars, Japanese cars, British cars, and so forth.

Do you want to buy a car, fix it up, and flip it in a few weeks? Or do you want to take your time with a more expensive, luxury vehicle and go over every little detail? The turnaround time you’re aiming for can help you decide what type of car you’re interested in fixing up in the first place.

If you focus on a particular type of car, you’ll avoid the age-old adage of “jack of all trades, master of none.” Take the time to truly familiarize yourself with the ins and outs of a particular style or make, and every time you restore or rebuild one, it’ll get easier and easier.

What you should look for

If you’re new to flipping cars for a living, you may want to start with something affordable, reliable, and with plenty of parts available. When looking through cars on AutoBidMaster, pick a damage type that goes in line with your level of expertise. If you’re more interested in bodywork and dealing with cosmetics, you can look for vehicles that have been involved in front or rear end collisions. Often, these kinds of vehicles need a new bumper and other panels to look close to new.

If you’re more interested in cars that are already lookin’ good but have mechanical issues, you can look at vehicles that are listed under mechanical damage. This can be damage to the transmission, engine, oil leaks, and so forth.

Fixing up cars is a skill, like anything else. If you aren’t mechanically inclined yet, start with popular cars like a Honda Civic or a Toyota Camry. Parts are readily available, maintenance and repair is pretty straightforward, and they are in high demand.

Can You Make Money By Selling Salvage Cars? How Much?

Selling salvage cars can be profitable if you approach the matter strategically. These cars were deemed a total loss by insurance companies due to significant damage. This can be an accident, flood damage, or fire. However, these cars often have a ton of value left in them. They can be repaired and resold, potentially turning a profit for those who know how to pick the right deal.

The key to making money in this rebuilding business lies in understanding the costs involved in buying and repairing a vehicle, and also selling the vehicle. Before you purchase a salvage car, it’s essential to estimate the cost of repair. This includes parts and labor. If the cost of repairs, plus the purchase price, is less than the car’s market value post-repair, then there’s a potential for profit. However this profit is not something crazy.

So, how many salvage cars can you sell to make a good income? The answer depends on various factors, such as picking profitable deals, your repair skills, market demand, and how efficiently you can repair each vehicle. Some rebuilders sell just a few salvage cars a month and make a decent side income, while others turn it into a full-time business, flipping dozens of cars each month.

Document Information

Learning the documents associated with salvage cars is important for anyone involved in buying and selling these vehicles. There are three key documents you’ll encounter are the salvage title, salvage certificate, and rebuilt title.

1. Salvage Title

A salvage title is issued to a vehicle that has sustained damage and has been declared a total loss by an insurance company. This title indicates that the car cannot be legally driven until it has been repaired and inspected by the DMV. Salvage title vehicles are typically sold at salvage auctions at lower price due to the extent of the damage.

2. Salvage Certificate

A salvage certificate is a similar document to a salvage title but is often issued when a vehicle is sold by an insurance company or salvage yard. This document is basically a proof of ownership for a damaged vehicle that has been deemed a total loss. The certificate is essential to legally repair the vehicle and eventually apply for a rebuilt title.

3. Rebuilt Title

Once a salvage car has been repaired and passed a state inspection, a rebuilt title is issued to this car. This title indicates that the vehicle was previously salvaged but has been restored to a condition where it can be legally driven on the road again. Cars with rebuilt titles often sell for about 20% less than those with clean titles. But these cars can still offer significant value.

How to Sell a Salvage Car And Make Profits?

Selling a salvage car can be profitable if done correctly. Here are some steps to maximize your income:

1. Assess the Damage

Before purchasing a salvage car, assess the extent of the damage and estimate the repair costs. This will help you determine whether the car is worth buying and how much profit you can expect from selling it.

2. Obtain the Necessary Documents

Make sure that you have the correct title and certificate for the vehicle. If you repair the car, make sure it passes the necessary inspections so that you can obtain a rebuilt title.

3. Repair the Vehicle

If you have the skills to repair the vehicle yourself to save on costs. Quality repairs can increase the car’s resale value significantly.

4. Market the Car Effectively

When selling, you should be transparent about the vehicle’s history and condition. Highlight the repairs that have been done and comment on how well these repairs were done to the car. Listing the car on various online platforms and reaching out to local dealerships can help you find the right buyer.

5. Negotiate the Sale

Be prepared to negotiate with potential buyers. People love to haggle and always start with a high price then lower it to strike a deal.

Selling salvage cars can be a profitable business. But this requires knowledge, skill, and attention to detail. Only by carefully selecting vehicles, managing repair costs, and understanding the documentation process, you can turn a profit in this niche market.

Before you buy

The most important thing to do before you buy any car is to run a ClearVIN VIN Check Report and conduct a physical inspection of the vehicle. If you can’t physically inspect the vehicle yourself, you can hire a third party to do so on your behalf. That way, you can see if the vehicle is worth putting money into and if any profit can be made. For those involved in business ClearVIN, our trusted partner, offers a bulk vehicle history report to meet the needs of dealers.

Sign up with AutoBidMaster today with just a few clicks and start your salvage car business right away! Feel free to give us a call at +1 (503) 298-4300, 6:00 AM to 4:00 PM PST Monday through Friday, or email support@AutoBidMaster.com with any questions and we’ll be happy to help.

Happy bidding!