3 Nov - 10 min read
With the rising cost of living in Malaysia over the past few years, it is not unusual for Malaysians to partake in additional side-jobs to supplement their income and support their household expenditure.
You may have read our previous article on ways that you can make some money part-time, but here’s a new method that you may not have encountered before: car flipping! But first, you may be wondering, what on earth is it and why do people do it?
#What is Car Flipping?
You may have heard about the issue of emerging house flippers a few years back. For those of you who aren’t familiar with the term, house flippers refer to individuals who purchase a house at a lower price and re-sell it at a higher price once they have redecorated or renovated the property to make it look more appealing. The same concept applies to car flippers – except that instead of houses, they are purchasing and reselling cars.
The only difference here is that if you do choose to sell your car, you do not need to worry about being viewed as someone who is disrupting the real estate landscape in Malaysia as your car is your personal property and how you choose to dispose of it will not affect anyone except you.
At this point you must be wondering, why should I bother with car flipping, as unlike property, cars are a fast depreciating asset. Well then, the thing about car flipping is that there are two ways you can go about doing this:
By low and high, we of course refer to the vehicle’s price. You may need to repair and pimp up the car – which you can do yourself to lower the costs – and later sell the car that you have fixed at a lower market price while gaining profit at the same time.
For this approach, your target audience for this segment would be the people who with a low budget but need to buy a car, or the people who prefer to spend as little as possible and don’t mind buying a refurbished car. Performing this trade as a side-income is doable so long as you keep yourself abreast as to what the market wants and deliver it.
For the second approach for car flipping, you will need to invest a little and ensure that your working capital is able to cover for this as it would require you buy high and sell higher. Unlike the first approach, expect to spend a lot more time, money, and effort on this as you will need to build your knowledge and resources to flip specialty vehicles such as sports car or classic cars.
You will need to consult with subject matter experts as they will have the know-how on what needs to be done to handle these cars, especially if they are classic, imported ones. Apart from that, it is also recommended to have a network of in-the-know people that you can consult with in case something does not work out the way you expect it to be. Also, it will take time to seek for these specialty vehicles as well.
For example, in your circle of friends, you may know someone who owns a Myvi or Honda City which is not unusual as these are common, everyday vehicles. You can even easily find someone selling off their Myvi online just by putting in the right keywords in the search engine.
On the contrary, if you are to look for someone who owns a classic such as a 1965 Ford Mustang that’s available in Malaysia and willing to let it go for the price you have in mind, you may find that your options are now much more limited, and will take more effort to source for this car as it’s available in limited numbers in Malaysia.
For specialty cars, do note that you may not be able to sell it as easily after flipping it as after all, it taps into the wants rather than the needs of a buyer. As it is, specialty cars are usually sought by a selected few such as car aficionados or collectors who are willing to pay your asking price.
Having said that, what makes flipping specialty cars a lucrative trade despite its setbacks is that you stand to gain bigger profits once you have sealed the deal. By tapping into the personal aspirations of your potential buyers, you can even double as a consultant for them and provide recommendations based on what they have requested. Do note that most people who opt for the buy high and sell high route will most likely end up doing this full-time out of their passion for cars.
Well, first off, you will need to have an eye for cars that have a potential resell value as well as an idea on the current value of cars, depending on the brand, model, year, mileage, and present condition of the vehicle.
This would not be an issue if you are a car enthusiast (like how some car flippers started out) but if you are not exactly a walking encyclopedia about it, then you may need to read up before venturing further. Here are the rest of the tips that apply for both buy low, sell high and buy high, sell higher approaches:
In America, you will need a dealer’s license to buy and sell cars for a profit if you do not have the car licensed in your name. As every state has their own dealer licensing regulations created to protect the consumers, it is vital for the car flipper to abide by their rules as failure to do so will constitute a violation of state laws.
In Malaysia, there are no specific rules as to how many cars can a person own under his/her name nor do you require an additional license to buy and sell cars. However, do note that as a car owner, you will still need to renew the road tax and insurance of the car that you are planning to flip so it might not be a good idea to have 5 cars or more under your care.
In a nutshell, car-flipping is still a hobby at most for most people but if you are interested to get into this as a side-business, you may want to check out affordable and reliable car insurance policies for the car that you are planning to flip. To make things easier, you can utilise our comparison tool for the best car insurance policies available and select one that works best for you!
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