Are you looking to start a classic car business but are unsure? If YES, here is an analysis of the profitability of buying and selling classic cars.
Selling classic cars is something that many people see as a hobby, a past, and a business. From classic car collectors to enthusiasts, classic cars have managed to penetrate the hearts of many, still making them in high demand, even though these cars were made decades ago.
If you want to get into this business, you can find classic cars in good condition, or you can search for classic cars that need to be restored. Some of the places where you can find these types of vehicles include eBay and other online car dealers and classifieds.
Besides, you can also browse newspaper listings, auto magazines, and online classic car forums which usually have lots of listings of all kinds of classic cars in different conditions. When looking at the cars you want to buy, be sure to read all the data and specifications that can help you estimate their value.
When buying a classic car, you will need to determine what kind of repair and restoration it will need. Ideally, it is best to send the car to a classic car restoration specialist to restore it to its original appeal and beauty. While the cost of restoring a car to cosmetic condition can be expensive, if you play your cards right, you can return that whole investment at a profit.
You need to make sure that you are an expert with the car you own and the company that made it. Read history books on the manufacturer, as well as books and documents on your particular make of car. You can also get information from classic car clubs, as well as a list of other people who own similar vehicles.
Use the VIN code to indicate which series it is or which model it is, for example, as if it is a limited edition or not. Add this information to the original vehicle documentation and the original service manual, if you have one. Classic car buyers usually like to know everything about a car’s history before buying it.
Clean and polish the interior and exterior of the vehicle before the customer sees and inspects the vehicle. Park your vehicle in an attractive location where its features will stand out. Make sure you have tools such as a flashlight, screwdrivers, adjustable wrench, pliers, and a rag on hand. Create a list of known mechanical issues and how much it will cost to fix them. Have a copy of the promotional kit you made to present to potential buyers.
To get the best deals on classic cars, you shouldn’t be trying to sell them until Christmas. It’s always a bad time because people are concerned about vacations and spend their disposable income on other things, which is why the classic car is at the bottom of the list.
The best time to sell is in the spring, especially if you own a convertible. People think about summer and roll into something that looks good, especially if they can do it from top to bottom. It is also a key point for enthusiasts who would like a car to be presented at summer shows.
Is it profitable to buy and sell classic cars?
With the growing popularity of classic car research, repair and sale TV shows, it’s no surprise that many investors are looking to enter this industry. Here are some tips that can make this business profitable.
a. Don’t invest in a classic car on impulses: you should never buy a classic car on a whim. Ideally, it’s best to familiarize yourself with the market first before you buy so you know you’re getting a reasonable offer.
The old saying goes that your profit comes when you buy an item cheaply. This is true for all businesses that involve buying and selling. Banking on your ability to negotiate a bargain price when you sell later is a bad way to make money.
b. Do you want to drive your classic car? How long do you plan to drive the classic car you bought for investment? Will it be your everyday car? Would you be happy if your classic car was your primary form of transportation for a while?
You should consider the likelihood that it will take you some time to repair and sell a classic car. As such, you should consider buying a car that you not only know about, but are willing to drive for a while if you need to. You don’t want to get stuck in a car you bought just because you thought it was a good investment.
vs. Additional maintenance costs. Repairing and maintaining classic cars can be expensive, and you can’t afford to have those costs sneak up on you. If your margin doesn’t include a cushion for unforeseen maintenance costs, you’re much less likely to benefit from your trade-in.
re. Get auto insurance designed for the classic: it is a good idea to purchase specialized auto insurance. The best way to find a good deal is to find an insurance company that specializes in classic cars. These types of insurance companies may very well be the best way for you and your investment to ensure adequate coverage.
Just like you would appraise a work of art, classic car values can fluctuate over time, when they just don’t depreciate, as new cars start showing up the moment you drive them off site. You want to make sure that your insurer takes into account the latest reputable auction prices and other venues when appraising your classic car.
e. Obtain a reseller license: all US states have book laws that meet licensing requirements for car dealerships. For example, Florida considers anyone who sells three or more cars in a 12-month period as a car dealership.
The practice of buying and selling a large number of vehicles without a dealership’s license is known as restriction. And, as you can imagine, it’s illegal. In addition, it can also be a red flag for buyers, which can make it difficult to resell restored classics.
So, if you buy and sell a lot of vehicles per year, you should definitely get a dealer license. This often results in layoffs for annual fees, insurance, bonding and other costs.