Even though the economy is still lagging, the used car business set a new record in 2014 with over $17 million in total sales nationwide. This is simply because even when the economy is in a down cycle, people still need cars to get around but don’t necessarily have the money to buy a new vehicle. So while there is a lot of money-making potential in the buy and sell car business, there are several myths that should be debunked according to Upullitnebraska.com.
The Myth: You must have a large inventory, with a large overhead, to be successful.
The Reality: Small car lots do very well and you can be successful by selling just a few cars at a time or having a lot with dozens of vehicles.
The Myth: You must have access to a lot of capital to start a used-car business.
The Reality: You can start a buy and sell car business for as little as $500. By becoming a licensed dealer you will be able to gain access to auto auctions were cars are sold for as little as $50! Additionally, there are auctions that are open to the general public, so you don’t have to obtain a dealer’s license if you don’t want to invest the capital.
The Myth: You must have expert mechanical knowledge of automobiles.
The Reality: While knowing something about cars will definitely help, you don’t even have to get your hands dirty. If you’re not a mechanic, you can hire someone to go to the auction with you or find a local mechanic who will give you a volume discount.
The Myth: The big money is made selling new vehicles.
The Reality: The markup on used cars can be over 100 times that of new vehicles, and the big money is in used trucks. New-car dealerships earn the majority of their profits from tacking extra points on loans, pushing extras like rust proofing and extended warranties.
The Myth: There is too much competition in the used car business.
The Reality: With the ever-growing demand for used cars, with over 600 million vehicles sold worldwide, competition isn’t even an issue.
The Myth: You will have to quit your day job.
The Reality: A small used-car business can be run “by appointment,” so you’ll be able to keep you current job and not have to give up all your free time.