Post: #1

I don't want to hijack El Mech's thread on Is your ride beta? So I'm going to pose this question separately.

I have been in the hustler mindset lately and I wanted to stress test this idea:

If I were to buy a salvage yet repairable car, lets say a BMW (heh), I would have a trusted mechanic go out there on a test drive/see if the damage is extensive or cosmetic (give me ballpark estimates on the repairs). I can then buy the car, have it repaired, and get the title converted from salvage to clean. In the process, I would enjoy substantial savings (potentially) while trying to minimize the risk (by having a mechanic with me). Now I am concerned about some pitfalls:

- My state may not agree to convert the title from salvage to clean. Can I try another state?
- Repair costs may be higher than expected. Besides taking a mechanic with me, what else can I do to control costs?
- If the title is rebuilt from salvage to clean, can I flip these cars for market value?
- Are there any pitfalls in this idea? Please feel free to poke holes in this theory.

I'm looking forward to your insights, fellas.

Post: #2

Well, it's fundamentally dishonest. That could be a psychological pitfall if you're not a psychopath, and those carfax databanks are probably going to keep the VIN in the database so if they look it up you might lose out.

Post: #3

It may depend on the state, in California I seriously doubt you could get the title "converted" from salvage to clean. Plus like iknowexactly said accidents will most likely end up on the car fax report if the buyer decides to look it up.

Post: #4

^
Guys, I am not saying that I will pass off salvage titles as clean. Buyers are welcome to check Carfax or do their due diligence. The car would be in running condition with a clean title. Caveat Emptor.

California may have stricter rules around this, however as far as I know, there are levels of salvage titles, ones that are rebuildable and others that are not.

From a profit perspective, I'm the one bringing the mechanic to inspect the car, buying the car/taking the risk that might not pass inspection even after repairs, and ultimately making sure that all repairs are done and the title is cleaned up (as in drivable on the roads), shouldn't expect a profit for all these efforts?

Post: #5

Don't bother and a title does not go from salvage to clean as any insurance write off will show up real fast as a total loss.

Except: they like to total anything with roof damage or air bag deployment and if the car is sought after and you take before and after pictures of a light collision the buyer will overlook this on cars sought after eBay is a good place to find these buyers.

BMW stuff adds up quick but not as bad as Audi or Benz

M cars, Amg etc fall in they grey area where one may not care to save a buck

Note: I make more money selling cars I hate like camrys etc just because people buy them without scrutiny so think about that. Benz or BMW buyers are pain in the asses

Post: #6

(12-25-2014 12:22 AM)el mechanico Wrote:  Don't bother and a title does not go from salvage to clean as any insurance write off will show up real fast as a total loss.

Except: they like to total anything with roof damage or air bag deployment and if the car is sought after and you take before and after pictures of a light collision the buyer will overlook this on cars sought after eBay is a good place to find these buyers.

BMW stuff adds up quick but not as bad as Audi or Benz

M cars, Amg etc fall in they grey area where one may not care to save a buck

Note: I make more money selling cars I hate like camrys etc just because people buy them without scrutiny so think about that. Benz or BMW buyers are pain in the asses

Good point about BMWs/Benzs, I'm guessing that the buyers scrutinize the cars more because of the cost.

I agree with you on the light damage. I'm sending you a PM that shows a few examples of cars (light body damage) that I'd be willing to buy.

I've got a few dollars coming my way and I'm trying to hustle to make some cash. Definitely not looking to pass of a car that was in an accident as a "clean" car. I was thinking that I could start with one or two cars and if they didn't sell, I can always my boys take them (at cost; no markup) because they wouldn't care as much.

Excellent advice as always +1 from me.

Post: #7

I've always wanted to do something like this, but my worries are always getting the car at the right price plus knowing what needs to be fixed to leave enough margin that I could reduce my selling price and still make enough profit to justify the effort.

Post: #8

Looks like you dont want to do any dirty work and just keep the difference. it's NOT gonna happen.

I had front collision. it wasn't that bad. No frame damage. The car was valued $10,000. the repair bill was about the same.
They totaled it, gave me the money and took the car. I had an option to buy it back for $2500.
Even I fix the car for $3000 by finding parts on ebay and going to mexican body shops, it wasn't worth it.

This is only possible if you are willing to do the dirty work or have desperate immigrants who want to work for you really cheap.

Professional guys with auto auction licenses and body shop are already on this. can you compete against these guys?

I am sure every guy who's on some type of car forum thought about this idea..........

Post: #9

Salvage title cars are a pain in the ass to repair while keeping costs down. Buy only if its a rare car and you want it for yourself,as basically every car becomes a project.

I would buy only if the damage was truly minimal and could be fixed by just swapping a few parts. Which would make it a very coveted "salvage" and thus not cheap. Or buy anything, dismantle and sell by piece, and sell anything left by the pound to a metal scrap dealer. I know a guy that does this, buys broken down cars, cuts out (literally) the engine and transmission, which he sells in bulk, and drops everything else on a container that he sells by the kilo. Makes around 500-700 per car, plus 250-300 for the engine/transmission (sometimes more depending on the make/model of the car), and he turns around 3-4 cars per week.

Post: #10

(12-25-2014 02:53 AM)Sebastian Wrote:  Looks like you dont want to do any dirty work and just keep the difference. it's NOT gonna happen.

I had front collision. it wasn't that bad. No frame damage. The car was valued $10,000. the repair bill was about the same.
They totaled it, gave me the money and took the car. I had an option to buy it back for $2500.
Even I fix the car for $3000 by finding parts on ebay and going to mexican body shops, it wasn't worth it.

This is only possible if you are willing to do the dirty work or have desperate immigrants who want to work for you really cheap.

Professional guys with auto auction licenses and body shop are already on this. can you compete against these guys?

I am sure every guy who's on some type of car forum thought about this idea..........

Good info. I may need to run more numbers to see if this is feasible. The good thing is that I have not committed any $$s yet so I'm not in a bad spot.

Post: #11

(12-25-2014 03:35 AM)germanico Wrote:  Salvage title cars are a pain in the ass to repair while keeping costs down. Buy only if its a rare car and you want it for yourself,as basically every car becomes a project.

I would buy only if the damage was truly minimal and could be fixed by just swapping a few parts. Which would make it a very coveted "salvage" and thus not cheap. Or buy anything, dismantle and sell by piece, and sell anything left by the pound to a metal scrap dealer. I know a guy that does this, buys broken down cars, cuts out (literally) the engine and transmission, which he sells in bulk, and drops everything else on a container that he sells by the kilo. Makes around 500-700 per car, plus 250-300 for the engine/transmission (sometimes more depending on the make/model of the car), and he turns around 3-4 cars per week.

Definitely good alternate strategies. Appreciate the background info.

Post: #12

My dad has repaired a lot of salvage cars, it's fairly easy but they are a pain to sell.

Post: #13

(12-25-2014 05:55 PM)Sidney Crosby Wrote:  My dad has repaired a lot of salvage cars, it's fairly easy but they are a pain to sell.

Who does your dad sell to?

My target demographic would be early-mid 20s, urban car guys who are looking for a status whip and care less about the history.

Post: #14

As a dealer, I can attest to the fact that outside of very few cases where the vehicles is purchased far, far back of book and requires minimal work, cars with salvage/rebuilt-branded titles are NOT worth the time or hassle.

1) Its an immediate red flag to anyone looking to purchase.

2) Attempting to convert a title from 'salvage/rebuilt' to a clean title is called title washing and not only is it disingenuous and illegal, but damn well near impossible in this day and age thanks to databases like NVMTIS (National Motor Vehicle Title Information Service)

3) As El Mechanico mentioned, people who buy European imports are the worst clientele to deal with because they always know more than you and scrutinize everything a more sensible person wouldn't.

Like I said, I'm a dealer, so I pretty much have to take anything in trade, so when I occasionally take in a car with a branded title for salvage/rebuild, I put absolutely pennies on the dollar for ACV (Actual Cash Value). That way, I know I could always throw the sled up on Craigslist and get out what hard money I put in it. The most recent one I had was an '00 Accord EX-L V6 sedan w/150k miles and a rebuilt title. I gave the lady $600 for it on trade because - like El Mechanico mentioned - a $5000 and under cash buyer is going to be less discriminating over something like a title brand as long as the vehicle itself is all there. I ended up retailing it for $2700.

Now, there are some real buys out there IF you have access to them. For example, Manheim Tampa runs a salvage-type sale every Monday and you always have a mix of police impounds, old city vehicles, cars that dealers and banks won't run in the 'regular' sale because they are mechanically-inoperable or have significant collision damage, and daily rental companies (Avis, Hertz, DTG) who dump cars with cosmetic damage. There are a good number of dealers who buy up most of those damaged rental units, fix them up quick, and try to run them in the following week's sale before the damage is reported to CARFAX/Autocheck. Sometimes it works, sometimes it bites them in the ass, so its a risky proposition with late-model cars and can be expensive as well.

tl;dr - dealers with lots of cash, resources, and floorplan money have been doing this for years already with mixed success.

My advise to you if you're looking to flip cars on the side, its always good to have some knowledge of bodywork and mechanical work. If you don't, consider partnering with a trust friend who does. You can also learn yourself how to wrench on things. I don't know your market, but start slow and on the cheap. Try to tap into that $5000 and under cash buyer market.

Scour Craigslist, the local paper/flyer, and even just drive around looking for cars that people just want to dump quick. This is where mechanical knowledge and/or a partner with good knowledge comes in hand. A lot of people want to get rid of cars because of issues they are tired of trying to fix. If you can find those 'diamonds in the rough,' fix what turns out to be an affordable problem, recondition, market, and sell the car, you can turn a decent profit. But you have to be there quickly and with CASH IN HAND TO BUY. Make a lowball offer, but back it up with cash. People are obviously most responsive to that. Keep in mind, most private sellers get dozens of jerk-me-off phone calls with people who try to negotiate beforehand and never even show up. I've bought many cars this way for retail and wholesale.

Post: #15

(12-25-2014 06:13 PM)dicknixon72 Wrote:  As a dealer, I can attest to the fact that outside of very few cases where the vehicles is purchased far, far back of book and requires minimal work, cars with salvage/rebuilt-branded titles are NOT worth the time or hassle.

1) Its an immediate red flag to anyone looking to purchase.

2) Attempting to convert a title from 'salvage/rebuilt' to a clean title is called title washing and not only is it disingenuous and illegal, but damn well near impossible in this day and age thanks to databases like NVMTIS (National Motor Vehicle Title Information Service)

3) As El Mechanico mentioned, people who buy European imports are the worst clientele to deal with because they always know more than you and scrutinize everything a more sensible person wouldn't.

Like I said, I'm a dealer, so I pretty much have to take anything in trade, so when I occasionally take in a car with a branded title for salvage/rebuild, I put absolutely pennies on the dollar for ACV (Actual Cash Value). That way, I know I could always throw the sled up on Craigslist and get out what hard money I put in it. The most recent one I had was an '00 Accord EX-L V6 sedan w/150k miles and a rebuilt title. I gave the lady $600 for it on trade because - like El Mechanico mentioned - a $5000 and under cash buyer is going to be less discriminating over something like a title brand as long as the vehicle itself is all there. I ended up retailing it for $2700.

Now, there are some real buys out there IF you have access to them. For example, Manheim Tampa runs a salvage-type sale every Monday and you always have a mix of police impounds, old city vehicles, cars that dealers and banks won't run in the 'regular' sale because they are mechanically-inoperable or have significant collision damage, and daily rental companies (Avis, Hertz, DTG) who dump cars with cosmetic damage. There are a good number of dealers who buy up most of those damaged rental units, fix them up quick, and try to run them in the following week's sale before the damage is reported to CARFAX/Autocheck. Sometimes it works, sometimes it bites them in the ass, so its a risky proposition with late-model cars and can be expensive as well.

tl;dr - dealers with lots of cash, resources, and floorplan money have been doing this for years already with mixed success.

My advise to you if you're looking to flip cars on the side, its always good to have some knowledge of bodywork and mechanical work. If you don't, consider partnering with a trust friend who does. You can also learn yourself how to wrench on things. I don't know your market, but start slow and on the cheap. Try to tap into that $5000 and under cash buyer market.

Scour Craigslist, the local paper/flyer, and even just drive around looking for cars that people just want to dump quick. This is where mechanical knowledge and/or a partner with good knowledge comes in hand. A lot of people want to get rid of cars because of issues they are tired of trying to fix. If you can find those 'diamonds in the rough,' fix what turns out to be an affordable problem, recondition, market, and sell the car, you can turn a decent profit. But you have to be there quickly and with CASH IN HAND TO BUY. Make a lowball offer, but back it up with cash. People are obviously most responsive to that. Keep in mind, most private sellers get dozens of jerk-me-off phone calls with people who try to negotiate beforehand and never even show up. I've bought many cars this way for retail and wholesale.

Great insights here. +1 for me.

Sounds like the salvage title hustle is too risky and not worth the effort.
I'll see what I can do with Craigslist/local papers and getting a partner.

This is why RVF is my go to spot for testing out business ideas. Appreciate all the responses!

Post: #16

(12-25-2014 06:13 PM)dicknixon72 Wrote:  Scour Craigslist, the local paper/flyer, and even just drive around looking for cars that people just want to dump quick. This is where mechanical knowledge and/or a partner with good knowledge comes in hand. A lot of people want to get rid of cars because of issues they are tired of trying to fix. If you can find those 'diamonds in the rough,' fix what turns out to be an affordable problem, recondition, market, and sell the car, you can turn a decent profit. But you have to be there quickly and with CASH IN HAND TO BUY. Make a lowball offer, but back it up with cash. People are obviously most responsive to that. Keep in mind, most private sellers get dozens of jerk-me-off phone calls with people who try to negotiate beforehand and never even show up. I've bought many cars this way for retail and wholesale.

Good info here. I like to ask whether the price is firm before I get face to face. If they say it is firm that does not mean it will be firm when face to face. If they say it is flexible, or give ground on the price over the phone, then GAME ON.

When you get face to face with the seller YOU GAME THE SELLER, from start to finish. This is RooshV, so the concept should not be foreign to you. Build rapport with conversation, find common ground, be pleasant and happy. Be likable. Who would you give a better deal to, someone who is cool or someone who pisses you off?

When you are looking at a vehicle that you want to buy, don't bad mouth it. Don't talk about the problems unless they are really severe. Where there is a dent or ding, or a tear in the upholstery, just run your hand over it so the seller knows that you know. If you criticize the vehicle then you put the seller in the position of defending his price. Don't be on opposite sides. Be on the same side.

When it comes time to hit him on the price, give him the sugar before the shit. Example from about 6 years ago when I bought a low miles 2000 Cagiva Gran Canyon motorcycle (predecessor to the Ducati Multistrada, 900cc Ducati engine, adventure tourer type bike). Background: The bike is worth $3500. A friend told me about it and the friend, who used to be a motorcycle dealer and actually owned a Triumph and Moto Guzzi dealership a few years back, told me that he thought the guy would take $2500. I would be willing to pay that. The ad price was $3200 and he had gone to $2800 on the phone with no real prompting from me. Here is how the conversation went:

Me: (sugar before shit) "I like this bike a lot. It looks great, has low miles, and sounds like a million dollars. It would be worth a lot more money if it said 'Ducati' on the side instead of 'Cagiva'. The problem is that nobody knows what it is."

Seller: "Yeah, you're right"

Me: (sugar before shit) "I have good news and bad news. The good news is that I have cash in my pocket." (I actually open my wallet and show him a stack of $100 bills) "I know that you get calls all day long from guys who want to talk but don't have money. I have the money"

Me: "The bad news is that it is a $2000 bike for me. I am looking at a Multistrada for only a little more, and that bike will hold resale better." The Multistrada was in Georgia, had higher miles and was $4000, not to mention that I had not seen it in person.

Seller: (Silence.) This is sales 101 but I will NEVER break this silence. I am perfectly comfortable standing silently for 5 or 10 minutes or whatever it takes. If I break the silence then I am negotiating with myself and I don't do that.

Seller: "Hmmm, that's a little low. Let me talk to my wife about it and I will give you a call."

Me: "Hey, I appreciate you talking to your wife about it, but I am ready to put cash in your hand right now. I would appreciate it if you would talk about it now and let me know. If you don't want to sell it then I understand, but in that case I need to go ahead and move on to another bike I am looking at. Fair enough?" Each of those 4 sentences is crafted in a certain way or has a very important element.

He goes to talk to his wife about it. He comes back in a few minutes.

Seller: "OK. I will take the $2000."

I had done this type of negotiation enough to not be surprised. The guy left $500 on the table and all he had to do was work me for it. It really is just game isn't it? Say the right things, always move toward the goal, have the balls to shoot for what you want.

TLDR: When buying a vehicle from an individual, use game.

Post: #17

I had a Jaguar that got a very light hit in the rear but was to my surprise a total loss. It was an older one with a lot of miles, but still a solid and good running car. Months later I saw it show up in a forum discussing Jaguars and I communicated with the new owner. He told me he bought it from a body shop that fixed the damage and yes, knew what he was buying. Frankly I think he got a very good deal. The insurance company paid me more than what he paid for the car after being fixed.

No idea what the mechanic paid for the "wrecked" car, but I have to think the mechanic lost money fixing it. You really have to know what you're getting into, body work wise.

Post: #18

I think you need some negotiation skills but it's more about Who's not going to regret when they walk away from the deal.

Maybe Cagiva was just one of your options and you wouldn't regret if he sold it to someone for little higher. then you had upper hand.

If he didn't care about money and had a place to sit that for a while, he would've had upper hand. He already tested the market and wasn't willing to wait for higher offer. (which I am sure he would've)
so both of you got into an agreement.

You run into this kind of negotiation thing often in dating market as well.
I was asking this girl on tinder to drive 30 min to hangout in my town.
She wasn't budging. I bet she has many guys like me talking to her and who are willing to drive and even take her out, so why would she? She is not that special girl for me either. So both of us got into mutual disagreement basically.

(01-04-2015 06:53 PM)1818Steve Wrote:  

(12-25-2014 06:13 PM)dicknixon72 Wrote:  Scour Craigslist, the local paper/flyer, and even just drive around looking for cars that people just want to dump quick. This is where mechanical knowledge and/or a partner with good knowledge comes in hand. A lot of people want to get rid of cars because of issues they are tired of trying to fix. If you can find those 'diamonds in the rough,' fix what turns out to be an affordable problem, recondition, market, and sell the car, you can turn a decent profit. But you have to be there quickly and with CASH IN HAND TO BUY. Make a lowball offer, but back it up with cash. People are obviously most responsive to that. Keep in mind, most private sellers get dozens of jerk-me-off phone calls with people who try to negotiate beforehand and never even show up. I've bought many cars this way for retail and wholesale.

Good info here. I like to ask whether the price is firm before I get face to face. If they say it is firm that does not mean it will be firm when face to face. If they say it is flexible, or give ground on the price over the phone, then GAME ON.

When you get face to face with the seller YOU GAME THE SELLER, from start to finish. This is RooshV, so the concept should not be foreign to you. Build rapport with conversation, find common ground, be pleasant and happy. Be likable. Who would you give a better deal to, someone who is cool or someone who pisses you off?

When you are looking at a vehicle that you want to buy, don't bad mouth it. Don't talk about the problems unless they are really severe. Where there is a dent or ding, or a tear in the upholstery, just run your hand over it so the seller knows that you know. If you criticize the vehicle then you put the seller in the position of defending his price. Don't be on opposite sides. Be on the same side.

When it comes time to hit him on the price, give him the sugar before the shit. Example from about 6 years ago when I bought a low miles 2000 Cagiva Gran Canyon motorcycle (predecessor to the Ducati Multistrada, 900cc Ducati engine, adventure tourer type bike). Background: The bike is worth $3500. A friend told me about it and the friend, who used to be a motorcycle dealer and actually owned a Triumph and Moto Guzzi dealership a few years back, told me that he thought the guy would take $2500. I would be willing to pay that. The ad price was $3200 and he had gone to $2800 on the phone with no real prompting from me. Here is how the conversation went:

Me: (sugar before shit) "I like this bike a lot. It looks great, has low miles, and sounds like a million dollars. It would be worth a lot more money if it said 'Ducati' on the side instead of 'Cagiva'. The problem is that nobody knows what it is."

Seller: "Yeah, you're right"

Me: (sugar before shit) "I have good news and bad news. The good news is that I have cash in my pocket." (I actually open my wallet and show him a stack of $100 bills) "I know that you get calls all day long from guys who want to talk but don't have money. I have the money"

Me: "The bad news is that it is a $2000 bike for me. I am looking at a Multistrada for only a little more, and that bike will hold resale better." The Multistrada was in Georgia, had higher miles and was $4000, not to mention that I had not seen it in person.

Seller: (Silence.) This is sales 101 but I will NEVER break this silence. I am perfectly comfortable standing silently for 5 or 10 minutes or whatever it takes. If I break the silence then I am negotiating with myself and I don't do that.

Seller: "Hmmm, that's a little low. Let me talk to my wife about it and I will give you a call."

Me: "Hey, I appreciate you talking to your wife about it, but I am ready to put cash in your hand right now. I would appreciate it if you would talk about it now and let me know. If you don't want to sell it then I understand, but in that case I need to go ahead and move on to another bike I am looking at. Fair enough?" Each of those 4 sentences is crafted in a certain way or has a very important element.

He goes to talk to his wife about it. He comes back in a few minutes.

Seller: "OK. I will take the $2000."

I had done this type of negotiation enough to not be surprised. The guy left $500 on the table and all he had to do was work me for it. It really is just game isn't it? Say the right things, always move toward the goal, have the balls to shoot for what you want.

TLDR: When buying a vehicle from an individual, use game.