Many people make a side income from buying wrecked and out-of-commission cars. The idea is to flip them by paying a low cost for the damaged vehicle, having it repaired, and then selling it for a higher cost to make a profit.
If you are considering flipping cars as a side income, you may find your first purchase to be a car that has smash damage. If this is the case, here are four things to consider about the damage and the repairs it may need before you use it as a flip option.
1. Vintage Considerations
The first thing to consider pertains to the car’s age. If the car is a vintage car, you need to consider if you want to keep the vintage look and feel. You may even want to repair it back to the original model condition. This decision matters on several levels but specifically with parts and paint.
For example, if you want to bring the car back to the original look of the car, you may have a problem obtaining the right parts or paint colour. Some manufacturers no longer make certain parts for cars due environmental restrictions.
Paint colours are an issue because the manufacturer may have only had it for a short time. This limited supply could increase the cost of the repair significantly and reduce the profit margin since you not only have to find the paint colour but also possibly pay a higher fee for it.
2. Parts Damage
What you think may simply be body work related, may actually be deeper than you think. For example, if the car was in a bad wreck, the front may be dented in. Though it may look like front end repair and paint is all that is needed, you may find that operating parts of the car were damaged.
This damage can lead to replacement of major components to the car, including engines and brake lines. In this case, you may need more than some simple upgrade and body work. If you are repairing the car as a flip project and want to make a considerable profit, you may want to consider cars that have door and trunk damage where major operating parts of the car are not affected and not needing possible replacement.
3. Resale Value
You likely already thought about the resale value of the car once repairs are done. What you may not have considered is what the repairs will do to that resale value. Some people who will not purchase the car if extensive body repair work had to be done. This makes them question what other damage may be done to the car as well.
If the car you are considering as a flip option has a few dings on the body, then resale value may not be an issue. However, if the car has significant panel damage or trunk and hood damage, it might not sell for as much.
4. History Reports
Remember, you should pull a car history report on the car before considering it as a flip. The reason for this is to determine how many accidents the car has been in and what repairs were done to it following those repairs. It will also apprise you of any other issues that could affect your profit after the repairs are made.
You may be wondering how the previous damage of the car will affect the actual repairs. For example, you may find if multiple repairs were made to the door, the integrity of the door is now weakened. This could make further repairs be less durable, if they are possible at all. If you are facing this issue, then you may have to replace the door or area that is damaged, which can cut into your final profit.
By considering these things, you can better assess if the car you are considering is worth the flip. If you aren't sure how much you may be getting into financially with the purchase, consider taking pictures of the damage and bringing the images to Bellarine Smash Repairs. We can give you an estimate on the costs of repairs. Stop by our auto shop today!