Buy Scrap Cars for Cash and Turn Them Into an Income
When you buy scrap cars for cash you are living the old adage “one mans junk is another man’s treasure”. Buying scrap cars for cash is an easy way to build a thriving business with a minimal investment.
If you are looking for an easy to follow business model, buying scrap cars, repairing them, and reselling them, maybe exactly what you are looking for. Learn how to buy scrap cars for cash and turn them into your very own treasure trove of income.
Scrap Cars And What that Means
You may be thinking that if I buy scrap cars for cash, all I am doing is buying hunks of junk, how can you make money from that. The fact is, there are many cars that are scrapped that are late-model vehicles, that still run and just need some body repairs to make it back into the sales cycle.
Let’s say a late model SUV is in a car crash. The cost of repairs according to the standards of the insurance company would exceed the blue book value of the vehicle, the insurance company would scrap that vehicle and pay out the owner. Why do insurance companies make these decisions about perfectly good vehicles that are fully rescuable? To save money.
It has long been held that insurance companies will scrap vehicles even if they can save a hundred dollars on the deal but that is not all we know about this process. When you take a vehicle to a body shop for an estimate that is not insurance related, the price you are quoted is a lot lower than if you take your vehicle to a body shop for an insurance covered repair quote.
In other words, it is well known that body shops will inflate the costs of repairs when the insurance companies are involved because they know they can. This is a very common practice that results in inflating the costs of vehicle repairs when the insurance companies are involved, which in turn devalues the vehicle and pushes it into the junk yard.
Lucky for you, you can take advantage of these practices and buy scrap cars for cash, repair them yourself and resell them at a profit. You can find Repairable SUVs For Sale that need some bodywork and a paint job to put them back into pristine condition for a very low cost and a very high-profit margin.
What You Need To Get Started
There are a few things that you will need to make sure that you are ready to buy scrap cars for cash and start making money. Investing in tools and equipment initially does not have to be excessive. Even if you plan on doing all the work yourself, and you find that you need a specialty tool or piece of equipment to get the project done, get familiar with equipment rental stores in your area. Renting equipment can be far more affordable.
A lot of people are hesitant to take the plunge and buy scrap cars for cash because they are concerned that their start-up costs will be excessive. The fact is you can rent almost every piece of equipment or tool that you need for a very low cost. For example, you do not have to go out and invest in a trailer to pick up your finds, you can arrange for a trailer rental for about $100.
Here are a few things you will need to help you make the repairs yourself:
- Invest in some universal parts to have them on hand. For example, you will find that having an adjustable hose clamp on hand in different sizes will always come in handy. Different size hoses, body pins, and other parts that are usually universal are good to have on hand. Buy them on sale, and start stockpiling them.
- Invest in a good toolset. Having the right size wrenches, screwdrivers, and other tools that you will need for your projects tucked away in the garage will make the repairs easier. If you can afford it invest in an air compressor and frequently used air compressor parts, it is a piece of equipment you will always use and always be glad you have on hand.
- Start investing in your car repair education. There are plenty of free resources online that can help you to build your knowledge base of car repairs and bodywork.
The biggest expense you will come across after you buy scrap cars for cash will be the parts that you need to repair them to like-new condition if you plan on doing the projects yourself. If you decide that some of the repairs are out of your league, then you will have to pay the pros to manage them, and that can reduce your profit and raise the capital that you will have to invest.
Plan on investing your time. Most car repairs really come down to removing a few bolts and replacing parts. You can find tutorials online for just about every repair.
Another thing you will need to consider before you get started is where will you store the vehicles that you buy? Do you have parking plans? Do you have room to buy scrap cars for cash? If you are living in an apartment or in an area where space is limited, consider renting space to keep your purchases. A lot of urban areas offer garage space for rent. Approach owners of vacant lots that are just sitting there and offer to pay them a low monthly rental fee. The owner may look at the offer as some income is better than none.
Where Do I Find Scrap Cars for Sale?
You may have seen the advertisements announcing “I buy cars for cash any condition”. Many of those ads are generated by people that will buy scrap cars for cash, rehab them then sell them. About 75% of car purchases are for used cars. There is a huge market out there waiting to buy cars from you.
You can place an ad on social media offering to take junk cars off of people’s hands, you can visit local scrap yards, and you can just approach people that have cars sitting in their yard rusting away. There are literally millions of scrap cars that are waiting to be rescued and restored.
Visit your local junkyards frequently, connect with body shops in your area, and even connect with towing companies to create a network that will alert you when new vehicles become available. It will not take long to find your first car.
What Type of Cars Are Worth The Investment?
Unfortunately, there are car accidents every single day, as a matter of fact, there are car accidents every single minute of every single day somewhere. Which means there are a lot of cars sitting in junkyards that are ripe for the picking.
When you buy scrap cars for cash you want to be sure that you are buying cars that fall into these categories:
- A vehicle that needs minimum mechanical repairs.
- Late year model vehicles.
- Vehicles that you can easily find parts for.
You do not want to buy scrap cars for cash that have a combination of many necessary mechanical repairs, and a lot of bodywork. It is okay to choose a vehicle that needs a large amount of bodywork, or many mechanical repairs, but you do not want to choose vehicles that need a lot of both. Why? You want to have room for a nice profit margin, and if you are spending a lot of money on parts, and the labor than your profit margin will start to shrink dramatically.
Late year model vehicles offer more value. Set a year range for yourself before you start shopping. For example, a good range period is 5 years or newer. Of course, you should be flexible with this year’s range. If you see a great SUV that is older and that is in fairly good shape, feel free to go for it. Trucks, SUVs, and vans can hold their value.
Familiarize yourself with which vehicles people are looking for. You can do this by searching online for the most popular older vehicles. For example, there is a huge following out there for the old Chevy Astro Vans. People will buy them in just about any condition to restore them, but of course, if you do the work for them, they will pay top dollar for these vans.
When you are first starting out and you are ready to buy scrap cars for cash, you want to focus on vehicles that you can easily get parts for. Some vehicles, like high dollar exotic vehicles, can be tough to find parts for. In the early stages of this business, you want to be able to move quickly through the restoration process to sell the vehicle quickly and move on to the next project. Waiting to find parts for exotic cars is something you can do down the road when the need for cash flow is not as urgent.
Prepare for the Unusual
When you buy scrap cars for cash be prepared for some strange and unusual situations. For example, you may be fully repaired to replace that bumper, windshield, and door on that Vette but you may also have to kill bugs with pesticide as well.
Some cars sit for long enough to pick up a rodent family or two, insect infestation, and even mold problems. While much of the work will be cosmetic, you do have to be prepared to deal with unusual problems.
In cases where vehicles have been sitting a while, it is a good idea to plan on changing all belts, hoses, brakes, and other parts that could have some dry rot. In all cases, consider new tires as a must, simply because you cannot look at tires and know if they have dry rotted many times.
Good tires are like sneakers for foot problems. They can improve the ride, and make other problems with the vehicle less noticeable. For example, you restore a vehicle but it may need new bushings that you do not want to have to deal with, the next owner can put that money into the vehicle, but good tires will help with the performance until they can invest the money.
There are some legal responsibilities that you will have when you buy scrap cars for cash and turn them into income. It is important that you do the research that is specific to your local area.
The Legality Of It All
Most of the time when you buy scrap cars for cash, you will get a “salvage title” from a junkyard, but when you buy it from an individual you may not even get a title. Let’s look at what you have to do when you buy scrap cars for cash with a salvage title first.
A salvage title means that the vehicle was “junked” or “totaled” and technically it can only be used for parts, but there is a way to buy scrap cars for cash with a salvage title, rehab the vehicle, and get a clear title on it.
To get your Department of Motor Vehicle to change a salvage title to a title that is clear or makes the vehicle sellable again, your local DMV will send an inspector out to check out the rehab work. They do not go through the vehicle with a fine-tooth comb, they just make sure that it is safe for the road again.
What happens if you buy scrap cars for cash and the owner does not have a title? You can apply for the title for the vehicle through DMV. The process can include requiring you to get a surety bond as proof that you did not steal the car, and that you are the owner of the car. In all applying for and getting a title can cost you about $150 depending on where you live. It can be a very affordable process.
Get Started Today
The potential to make money is tremendous. Take advantage of this opportunity and buy scrap cars for cash and turn them into a gold mine.