Can You Really Make Money Selling Cars?

man and woman with a BMW

If you live in America then you know all about America’s obsession with the automobile. There are many ways for the average Joe to make money selling cars, even today, over 100 years after the first cars exploded onto the market.

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In 1903 Henry Ford manufactured his first car, The Model A. Contrary to popular belief, it was not the first car ever built! What he did however, was create the first economically affordable automobile, The Model T.

In 1908 Henry debuted The Model T at $825. Four years later he lowered the price to $525 (good luck finding one for that price now) and that’s all it took. The automobile rolled in to the hearts of Americans forever.A young man selling a car to a couple

Now, almost every American can say they are, or they know someone who is a serious car lover. It’s actually quite unique compared to other countries around the world. I lived in Europe for some time, and they look at cars as just a way to get from Point A to Point B. American’s look at their cars almost like a part of their home, or even like a pet (complete with personality)

It’s safe to say there’s definitely money to be made with cars these days if you take the time to find a business model that works for you. You do not have to pony up the cash to open up your own dealership (though it is an option), and there are a variety of ways to get started, even if you are on a tight budget.

  • Can You Really Make Money Selling Cars?
      • Working At A Dealership
      • Car Auctions
      • Leveraging The Internet
      • Are You Mechanically Inclined?
      • Partner-up with someone who is
      • Recycling Old Cars
      • Final Verdict?
  • Make Money Selling Cars
      • Final Review

Can You Really Make Money Selling Cars?

As it turns out, you can. There are a number of ways you can do it too!

The most traditional way to make money selling cars is to go to work for a dealership. That’s right, a job.

Unlike most jobs though, car salesman have things pretty easy.

Working At A Dealership

Established car salesman set their own hours, demand the highest commissions and many of them can work for several dealerships at the same time.

In a lot of ways, they are like freelancers.

Unfortunately, the stigma of being a “Car Salesman” scares a lot of folks away. Don’t get me wrong, I’m sure there’s still plenty of shady used-car-guys out there, but we’re not living in the 70s and 80s anymore. I’m actually looking at buying a 2016 Chevy Colorado and have been looking around. So far, I’ve been very surprised at how low-pressure the dealerships are around here.

Today’s car salesman is an educated, tech-savvy and transparent. Most of them operate like individual businesses inside the dealership, with their own clients, websites and employees.

I’m not saying it’s the best option, but if you have the entrepreneurial spirit of a freelancer, you like cars and you need benefits — maybe working at a dealership is a good option for you. It’s a nice balance of being able to use the infrastructure and established brand of the larger company, but still be able to be an independent businessman and enjoy some of those freedoms.

Despite being paid the minimum hourly wage, car salesman can make over $40,000 per year, depending on commission. Expect to work long hours, six or seven days a week and most holidays though.

Car Auctions

Buying cars from auctions is one of the best ways to make money selling cars in my opinion. In fact, that’s how the big dealerships buy their used cars.

Going to auctions can put you on a level playing field with big dealerships, because you are all looking at, and bidding over the same inventory.

Sure, they may have bigger pockets than you, but everyone has to start somewhere. And as with any industry, the little guys are often more flexible with what they can buy, and how they can profit from it. If you are smart and creative, you can always find deals that big dealers wouldn’t even consider jumping on.

There are all kinds of different auctions too!

cadillac car auction

Dealer auctions are the best. But you can also find repo-auctions, auction lists and independent auctions.

If you can get into a good auction you can find pristine cars at wholesale prices. That’s the whole point. Buy low sell high. That’s how you find yourself in the profit.

However, there are some nuances that come along with trying to buy cars from the auctions. For starters, the best auctions require you to have a dealers license. These are the dealer auctions.

Without a dealers license you will be legally limited in what you can sell anyway.

Most states make it a misdemeanor to sell cars without a Dealers License.

Each state is different, and everyone can sell some cars, but without a dealers license you are limited to a certain number. In most states that number is somewhere around three to five cars. That being said, I’ve met more than a few guys that absolutely sell more than this number under the radar.

I sold my Tahoe to a guy that does this full time, and I’m quite confident he doesn’t have a dealer’s license. The guy down the street from me is always fixing up junkers into street rods as well, and I doubt he’s doing it above board either.

I am not a lawyer and I don’t want to give you bad advice, so you will need to check the laws for your state.

The advantages for getting a dealers license is that you can literally compete with dealerships. Once you have the license you can go to the same auctions the big dealers go to.

However, a dealers license could cost you more than $2,000. It all depends, again, on your state’s laws, fees and taxes.

The majority of that cost will be a $800 to $1,500 bond, which is sort of like insurance. You can easily get this amount lowered depending on what type of business you start. If you go this route, you definitely need to start looking at this venture as a business rather than just a weekend hobby to make a bit of extra cash.

Check with the guys at LegalZoom, they are great with things like this. They helped me start my LLC last year and though it cost me a little more to have them help me do it, it saved me a lot of time and headache.

Leveraging The Internet

If you’re serious about trying to make money selling cars, then the internet is going to be a valuable tool for you. In fact, it will be a necessity.

Even, like I said, car salesmen working for the dealerships are using the internet these days.

Without a dealers license, the internet could help you replace the big auctions, by giving the tools necessary to search through loads of potential car purchases.

Deals are found all the time online. If you know what to look for you can find great cars with minor problems and turn them into big profits.


Craigslist alone could be enough to help you find cheap cars, and even buyers. It’s not that much different from flipping houses.

Theoretically, you could find and sell a car in just a few hours. When I listed my Tahoe last August, I got 3 phone calls in 30 minutes and sold it in less than an hour. There were definitely guys waiting to pick up good deals, which means there’s money to be made.

Operating on your own gives you this unique advantage that even big dealerships don’t have (due to their overhead). Flipping cars for instant profit wouldn’t happen regularly, but the point is that it can, and probably has happened.

Just take a look at this deal a friend of mine, David, got on his new car.

David is a mechanic on the side. He’s always buying, fixing and selling cars. I’ve never seen a car he couldn’t fix. So when he saw an ad with the picture of this GMC Denali for only $1,000 he was intrigued.

David called the owner, drove to the home, paid the man and spotted the problem right away.

flipping cars online for cash

Apparently, after a stint in a local garage, the spark plug wires were put on wrong, causing the SUV to fire at the wrong time (basically the spark was igniting when there was no fuel in the cylinder walls).

David returned the wires to their rightful homes and drove the SUV away. This particular Denali is “Fully Loaded” with leather seats, power everything navigation system and three TVs.

Similar SUVs sell for nearly $20,000 right now.

Deals like this aren’t all that uncommon either. You just have to know where to look. Which brings me to an important point…

Are You Mechanically Inclined?

If you don’t know anything about fixing cars then you could be off to a slow start.

That doesn’t mean that you can’t still make money selling cars though, it just means it’s going to take you longer.

There is an easy solution though:

Partner-up with someone who is

The truth is, ASE certified mechanics are always looking for work. The 2008 crisis hit everyone hard, but particularly handymen — and mechanics fall firmly into that category.

Even if they have a full time job, mechanics love to take on side work. I’ve never met a mechanic that didn’t have a bit of the entrepreneurial bug, so just ask around or post an ad in Craigslist.

What kind of deal you strike will depend on who you team up with and how you know them. Working with a friend means you can be more relaxed and do a handshake deal to get started.

You run the business side of things and they run the mechanic side. Working with someone you don’t know may require more of a fixed contact to prevent any legal issues or hard feelings down the road.

selling cars business venture

Recycling Old Cars

Another method you could try is recycling.

Have you ever seen those signs around that say “Will buy your car for $$$”?

Most times, those guys aren’t looking for cars to fix-up, they are looking for cars to recycle.

You call them, they come pickup the car from you, usually for a couple hundred bucks. Then they take it directly to a scrap yard. For the cost of fuel, they can make several hundred dollars in profit, depending on the make, model and size of the vehicle.

You can start doing this right now if you have the means to haul cars around. There’s no licensing needed to buy junk cars for scrap.

At this point, you’re technically not selling the car, you’re making money recycling the car.

If this option sounds good, another way to maximize profits would be to strip down the car and sell it for parts.

Used car parts are a pretty big industry. Most people don’t need or want a brand new part when an old one wears out. Mechanic shops and even some big dealerships buy used parts everyday. This is especially true for parts from hard to find vehicles.

You will get much more money parting out a vehicle than you would recycling it, and probably even selling it outright.

The problem then becomes storing the vehicles. But if you only have one or two vehicles, especially ones with hard to find parts, you could sell parts online part time and make a nice little side income.

Final Verdict?

There’s definitely ways to make money selling cars. I’m sure there’s lots of other ways that I didn’t even think of to mention in this post.

If you want to start business selling cars, you can increase your chances of being successful faster with a professional website and some very basic online marketing skills. Even if you just buying and flipping a few cars out of your garage, a website that documents and shares the repair process, lists your inventory and lets customers find you is a huge advantage.

If you are thinking of getting a dealers license or working for a dealer, building a personal brand is even more important.

If you read this and decided selling cars is not for you, there are still a number of ways you can start your own online business. In fact, if you follow in my footsteps, you won’t even have to worry about inventory, and you can start with almost no upfront cash.

Make Money Selling Cars

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Final Review

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