How to have a (almost) free fleet?
Here's the secret to get free cars
I’m not saying you will not spend any money, I’m just saying that, if you follow these steps, you may be able to resell it for the price you paid, maybe a little bit cheaper maybe for a higher price.
You will agree that if you pay your S Class $50,000 and resell it 6 months later for $55,000, you not only had a free car but it even made you some money.
Alright let's dive in it
Right before we start, I want to emphasize that you will need a credit score that allows you to finance it or enough cash on hands. You won’t get a car for free if you can’t buy it in the first place. (I know, this sentence sounds strange to me too).
It’s the obvious right. Let’s find that car. But don’t find any car. Find the model that will best suit your customers at the best price. Don’t pay attention to the location, the only thing you want to focus on is find the right car. The one you may already know who you’re gonna sell it too.
Avoid the green S Class or the 7 series. You need to find a car that is easy to sell. It’s harder to buy but if you can’t sell it fast at the end of the process, you won’t make any profit.
Surprisingly, some dealership sometimes struggle selling a car that should be selling fast. Not the right location, not the right demographics, there can be a lot of reasons for that.
Whether you find the car on cars.com, autotrader or with a local dealership, you want to get the VIN. It’s always listed online and available on the car itself. You will need this important information to be able to find out the wholesale value of thst very car.
If you find several cars that are quite similar (year, model, mileage, color) you may be OK with only one VIN.
Why do you need the wholesale value of this car also known as auction value? Alright, here it becomes interesting.
Dealerships buy cars from different sources. Auction, trade ins, other dealers. But they don’t buy these cars cash. They buy it with a line of credit and this line of credit is usually OK for 90 days. 3 months. At the end of these 90 days, if the car is not sold, keeping it will start to make no financial sense anymore and the dealership may have to auction it again or sell it at a loss to another dealership.
I bet you didn’t think cars would be like stock right? But they are.
So finding the auction value is crucial in the sense that it will help you place your offer (#5).
How to do it? Take the VIN, call a dealership elsewhere and tell them you have this car you need to sell now for cash and see how much they’d offer you.
Whatever the price is, this is the wholesale value.
And you can bet that the car you found, if the dealership keeps it over 3 months, is going to be auctioned at this price.
Now you know how far down you could potentially go
Now that you know the wholesale value of that car, you will need to find a car that is close to the expiration date at a dealership. The closer the better.
But how are you supposed to know? You can’t ask the sales rep. He will tell you he’s had it for a few days to put YOU in urgency.
If the car is listed on autotrader or cars.com, these websites usually offer a free carfax report. When you scroll down to the bottom of the report, you will find the date the car was listed for sale.
Usually a car becomes a concern for the dealership when it sits on the lot for over 8 weeks. You won’t be able to play the next steps on a car they’ve had for a couple weeks but if it’s been a couple months, they may start to be more flexible.
If you’ve ever traded, you know that you need to leave your emotions at home when you want to strike a good deal. Tell yourself that you don’t like this car, it’s just a tool you need to run your business and there’s plenty of them on the market.
You know these guys need to sell it soon. You also know how much they’d have to sell it for to another dealership or auction if they don’t find a customer.
This is what I call a good hand.
But they need to feel good about selling this car. The rep needs to make some money and so does the dealership. There’s no way you will ever get the car at auction price but, say you add 3 Grands, then it might be a deal they will go with.
If the car is listed a $60,000 and the wholesale value is $47,000, then you should place an offer at $50,000.
Of course they will fight and of course you won’t budge. You won’t think, you won’t show any interest of weakness, you will simply tell them that this is the price you CAN pay and you’ve found a few offers. If they ever want to sell this car to you, they just call you. And you leave.
You may not get the deal same day but if another week sees the car sitting on the lot, they will likely call you back with a counter offer to which you will say no.
Until they say OK for $50,000.
Now you’re halfway to your free car. You had a good deal on it but now you want to have a good deal at the exit.
You may already have a few clients in your mind who know how much this car is worth. You can tell them it will be for sale in a few month for $XX to start building interest.
Of course you want to keep it in pristine conditions but also be careful about your mileage. How long you keep the car will depend on how many miles you can put on it and if there is a new model showing around the corner.
Now comes the time to sell your car. Don’t trade it in or it will cost you. It is likely that if you keep your car 3 months and don’t put too many miles on it, you might resell it close to the wholesale price but this is much too low for such a short time.
Always be ready to sell your car. Always. If it’s a car like this is usually listed for $60,000 to $65,000, tell people around you that you’re selling for $57,000. It’s a good deal and a beautiful car.
List it for sale with plenty of GOOD pictures. If you don’t know how to take good pics, pay a pro to do it, it will definitely pay for itself.
You know that you have plenty of margin to sell this car, so don’t hesitate to give away one or two thousands to make your buyer happy. You’re still making $5,000 profit on it
The car is sold and of course, you already found another good deal. Repeat and don’t mind if at some point you have 2 cars instead of 1. You can always put a driver in it and make money.