Resources on the Topic:eBay Motors the Smart Way: Selling and Buying Cars, Trucks, Motorcycles, Boats, Parts, Accessories, and Much More on the Web's #1 Auction Site by Joseph T. Sinclair and Don Spillan
Ebay.com
Wait, wait, wait. Before you read the title and give up on this article, just stick with me for a second. Have you ever thought about the fact that convertibles are more highly sought after in Florida than Minnesota? How about the incredible popularity of Subaru in the northeast? These types of geographical preferences are the basic building blocks for a concept called ARBITRAGE, which simply means similar items are selling for different prices in different markets.
For someone looking to make a profit, this sets up some great opportunities. In addition, the current collapse of the car market and economy in general mean that there are many people seeking to unload cars on the cheap. If you are smart, patient, and detail oriented, you can find these deals and turn them into cash.
To start, Ebay Motors has completely shaken up the used car game. It allows resellers nationwide to post their goods online. Here's how to use Ebay Motors to find some great arbitrage opportunities.
1) Pick a car brand/style that is popular in your region. Need ideas? Just look around!
2) Run an ebay motors search for this brand, try to find relatively common models (aka Accord or Civic)
3) Narrow that search down by selecting private sale auctions and auctions with no reserve. Realistically, dealers know the fair value of their vehicles, so you are unlikely to find a gem from their auctions.
4) Once you have found a few vehicles that fall into this criteria, open Edmunds.com, KBB.com, and NADA.com
5) Check their recommended private party price for these vehicles in your area. Average the prices from these three sites.
6) Now you need to do a little math to understand your potential profit margin.
Start with the Average Sales Price According to the Sites Listed Above, then subtract:
-Sales Tax
-Shipping Costs (If the car is out of your area)
-Temporary Tags
-Insurance (Assume 3 months with minimum coverage)
-10% Profit margin
This value becomes your max bid on Ebay. It's that easy. The beauty of Ebay is that you can enter this price right away. Ebay will start you at the minimum necessary bid and slowly raise the value as others bid until it hits this max price. This allows you to set it and forget it!
After the car is purchased, immediately list it on all available car web sites including craigslist, ebay, cars.com, and autotrader. Because you have done the math, you should know exactly what you need to get to turn a profit. It is that easy!
While this system may not put you on a quick path to riches, after several successful transactions, you can begin to consider applying for your dealer permit. This will give you access to live in-person auctions, lower your license plate fees, and potentially allow you to lower your insurance costs, all of which raise that profit margin.
See, now that wasn't so bad was it? I am sure that you or someone you know has had that car that they just COULDN'T sell, so they lowered the price incessantly to find a taker. These people that allow their frustration to impair their logic make this whole process possible!
Good luck with the search!
Keys To Success:
Patience. Just like real estate, the money is made when the car is bought, so wait for the right one.
Perseverence. Be relentless in your marketing. Use Craigslist, Ebay, Autotrader, Cars.com, etc.
Do the Math! If you don't run the calculation upfront, you put yourself at great risk of having to sell at a loss
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